Zrcoin will be a Waves platform meta-token backed by the production of zirconium oxide (ZrO2)–a valuable industrial input most commonly derived from zirconium sands. Proceeds earned from the token sale will be used to construct and outfit a factory in an industrial center of the Ural region of Russia. The team estimates that their first factory will be able to produce 400 tons of ZrO2 per month. Russia’s domestic annual demand for ZrO2 is about 150,000 tons, according to the Zrcoin FAQ.
Zirconium dioxide is used in a variety of commercial and industrial applications. It has the highest melting point of any of the ceramic metals, so it is often used in the linings of high temp furnaces as a refractory material. Zirconium dioxide is most commonly associated with ceramic kitchen knives but it can also be used in dentistry, ceramic glazes, and in other applications.
Vitaliy Merzlayakov and other members of the Zrcoin team have developed a new method of producing ZrO2 that recycles industrial waste products that are cheaply and readily available. The resulting synthetic zirconium oxide concentrate is least 66 percent pure and ready to be used in refractory materials without further modification.
What is the token being sold?
The object of the token sale is the Zrcoin (ZRC) which grants its holder a portion of the profits earned by Zrcoin LTD. Starting 8 months after the crowdsale, Zrcoin LTD will begin a buy back program from token holders. Each month, at least $400,000 will be allocated to buyback ZRC from token holders at a 5.5% increased rate compared to the crowdsale. Token holders will receive their buyback in the form of BTC. The buyback period will last twelve months. Each month the amount of funds allocated for buybacks will increase.
Token holders also have the option of trading in their ZRC for zirconium oxide at rate of one kilogram per coin. Tokens will also be tradable on the Waves platform and on other cryptocurrency exchanges following the crowdsale. Eventually Zrcoin LTD plans on going public and offering shares in a traditional IPO. At that time, ZRC tokens will be redeemable for shares.
The token sale is being operated by Lagata Logistics ltd., a U.K. based consulting firm that will also hold on to sale proceeds and audit Zrcoin ltd’s use of funds. According to their terms of agreement, U.S. citizens and residents will not be permitted to participate in the sale.
What is the project status?
Zrcoin LTD is incorporated in Russia. Their proprietary production method for producing ZrO2 from waste materials is fully developed and tested. Zrcoin’s FAQ claims that they have third
party validation of the quality of their product from the Ural Federal University Institute of New Technologies. Zrcoin’s product also has backing from the ‘MISiS’ National University of Science and Technology ‘Tseolit’ Research and Development Centre, where team member Vitaliy Merzlyakov is the CEO.
According to the Zrcoin FAQ page, a number of companies have expressed interest in purchasing their product at total volumes exceeding 1,000 tons per month. These companies include:
- RHI–a Russian based manufacturer of glass and cement
- VGH–a German metallurgical services firm
- Magensit Group, JSC–a Russian refractory plant
- Dinur, OJSC–a Russian refractory plant
- Bacor, Research and Development Centre
- PK-2, CJSC–a Russian based wire manufacturer
Competition and Challenges
Zrcoin will have to compete with global producers of zirconium oxides. Most producers refine their products from mined zirconium sands; however a number of firms in the United States recycle zirconium scrap to produce ZrO2 industrial products.
According to this report by the USGS Mineral Resource Program, the price of Zicron products has fallen by more than 50% since 2011, but has remained steady at $1,050 per metric ton since 2013. This would suggest that the $2,800 per ton price tag that Zrcoin estimates for their product is on the optimistic side. However, the USGS report’s findings are based on U.S. markets. The market conditions in Russia might be substantially different to explain this price gap.
Who is the team behind the project?
The Smith + Crown research team has been unable to find much of a digital trail for any of the core members of the Zrcoin team. However, the team did make themselves available for for a lengthy research interview and has been extremely responsive to our requests for information. Additionally, Sasha Ivanov, the founder and CEO of the Waves platform has confirmed his involvement in the Zrcoin project as an Escrow provider. He has also endorsed the Zrcoin project on his twitter account.
According to the bios on their homepage, the Zrcoin team has an impressive amount of experience in the fields of chemical engineering, metallurgy, refractory science, finance, international trade, and risk management. Most of the team members run their own businesses. It’s not clear who will run the day to day operations of the Zrcoin factory.
Together over the course of two years, Vitaliy Merzlayakov, Victor Kochetkov, and Yevgeny Panov developed Zrcoin’s production methods.
- Vitaliy Merzlyakov is a chemist with multiple patents and 12 years of experience in the refractory period. There is a video of him on youtube explaining the Zrcoin project.
- Victor Kochetkov as 37 years of experience in the field of metallurgy. He is the head researcher in a metallurgy laboratory in Ekaterinburg, Russia.
- Yevgeny Panov is a process designer in the refractory and metallurgy fields with. He previously developed methods of recovering chrome oxide concentrate from scrap materials.
- Vadim Sychev an economist by training and has extensive experience exporting metal containing materials worldwide.
- Andrei Nikonorov is a specialist in the field of financial analysis and an expert in the field of mergers and takeovers.
|Role of token:||Profit sharing through a buyback program|
|Token supply:||Proportional to token sale contributions|
|Distributed in ICO:||100%|
|Emission rate:||No new coins created|
|Sale period:||May 11th, 2017 to June 9th, 2017|
|Token distribution date:||One week after token sale ends|
|Minimum investment goal:||$3.5 million|
|Maximum investment cap:||$7 million|
|How are funds held:||Multisignature escrow account|
|Production start date:||8 months after token sale|