A group of international entrepreneurs have announced that they will be releasing a blockchain token backed by an industrial commodity. ZrCoin will be a derivative – the option to buy an equivalent amount of synthetic Zirconium Dioxide (ZrO2), a product used as a refractory material in numerous different manufacturing processes. Funding for a new production plant will be secured by a crowdsale of the ZrCoin token.
Spearheaded by financial analyst and blockchain expert Andrey Nikonorov, a team of scientists and industrialists has developed a new green process for producing ZrO2 from waste materials, rather than extracting it from existing or newly-discovered deposits. In addition to using cutting-edge manufacturing techniques, the project will also leverage blockchain.
ZrO2 is a scarce material that is used in the production of ceramics and in other applications where physico-chemical resilience under high temperatures and adverse conditions is required. It is a structural component of alloys used in the construction of atomic reactors, and critical elements of chemical reactors, artificial joints and prostheses are made of Zirconium. It is used to produce high-temperature ceramics (refractory products) and is the refractory material with the best price-quality relationship rating.
Due to the demand for synthetic zirconium, investors will be repaid at a premium, from the profits of the operation. Buy-backs will start no later than eight months from the end of the crowdsale, and the token will trade on the market in the meantime. ZrCoin will also be redeemable for a unit of physical ZrO2, if desired.
The decision to use blockchain to launch this was explained by Nikonorov, saying: “The reality is that banks do not give money for ideas like this. Mainstream outside investors wanted to own 70-80% of the business, which we were not prepared to accept. So alongside our new green manufacturing technologies, we have developed a new way of structuring investment and perhaps pioneered a new means of commodity trading.”
The ZrCoin ICO aims to raise a minimum of $3.5 million. Investors will be able to deposit via wire transfer as well as with bitcoin and other cryptocurrencies. Larger amounts would be used for the construction of two production lines, accelerating the process and allowing faster buy-back of ZrCoins.
Planned to launch in April, the ICO will offer a 50% discount on the first day, while the discount on the second day will reduce to 39%, with subsequent daily decreases of 0.5% until the end of the ICO