Astronaut Capital takes exposure in the Bread token sale as its second ICO investment.

On the 18th of December, Astronaut Capital (ASTRO) released a report stating that they have become an investor Bread (BRD), a US based wallet provider for cryptocurrencies. You can download the full report here.

Brief

Bread is an established cryptocurrency wallet provider that seeks to expand its service offering to provide integrated and decentralized banking functionality. The company also has a focus on utilizing local partners that are fully accredited and licensed to transact directly with compliant exchanges relevant to the user’s jurisdiction.

Company Overview

Bread was launched in 2014 as an Android application to service customers that were seeking a versatile and simple wallet for the storage of Bitcoin. As popularity increased, Bread released an iOS version of the app and expanded the team significantly.

The token sale of BRD comes at a time in which the team seeks to expand the service offering in a way that is fully compliant from a regulatory perspective.

The new functionality will involve integrating local exchanges for BTC purchases that are still fully KYC compliant. In addition to this, Bread will also be offering a range of other benefits such as portfolio management/analytics, bill payment and loyalty points.

Commercial & Technical Strategy

Bread seeks to implement a significant amount of new functionality by Q4 2018.

The largest technical upgrades include:

Compatibility with ERC20 tokens — the ability for users to import and by ERC20 tokens via the Bread App. Users would hold their private key, meaning contribution of ETH to ICOs would also be possible.

Portfolio management — users will be able to view their portfolio at a glance with high-level analysis. In addition to this, Bread will also offer data on pre-ICO and ICO tokens that are coming to market.

Buy and sell services — localized buy and sell services where users can access exchanges in their domestic region through the Bread app. Implementation of this will be KYC compliant in each jurisdiction opened.

P2P decentralized trading — implementation of an asset exchange where users can trade ERC20 tokens and cryptocurrencies with others seamlessly.

Roadmap

The roadmap for implementation of the above appears to be a timely priority for the Bread team.

By Q4 2018, Bread anticipates that all functionality and upgrades will be complete and available for users.

Token Sale

Under the code BRD, Bread will be issuing ~160,000,000 tokens in total.

Crowd — Exactly 66.66% (106m BRD) will be issued to the crowd through the process of raising approximately USD$32m.

Bread Team — Bread notes in the white paper that “Bread will be issued 1 token for every 2 tokens sold (i.e. 33.3% of all issued tokens).” The white paper appears to omit any disclosure of adviser or bounty token allocations. Our expectation is that part of the ~33% held by Bread will be allocated to other supporting personnel/advisors.

Vesting — We were unable to find any disclosure with regards to vesting periods for the Bread team.

Token Use

The BRD tokens that are issued have several use cases within the Bread ecosystem.

the BRD can be used instead of fees paid on transactions (similar to BNB on Binance)

the BRD can be exchanged for the use of upgraded functionality in the system such as portfolio management

the BRD can be used to gain access to early-bird token crowd sales (ICOs), in-app content and ‘other perks’

Use of Proceeds

There has been no ‘Use of Proceeds’ or budget shown on any of the informational material. Astronaut can only assume that the vast majority of funding is going towards operational expenses and development of the new app functionality.

Team

The management team appears to have extensive experience in technology startups.

Adam Traidman: CEO of Bread. Previously, Adam was CEO of WearSens, a wearables startup focused on monitoring eating habits. Earlier in his career, Adam was CEO of Chip Estimate, acquired in 2008 by Cadence Design Systems

Aaron Voisine: Aaron is co-founder and President of Bread. Previously, Aaron led mobile app development at Yammer and Banjo. Aaron was co-founder of Light, a popular social video sharing app, which was sold in 2014

Aaron Lasher: Co-founder and CMO of Bread, Aaron is a marketing executive with 10 years experience designing and leading customer-centric research for de novo and high tech products in the healthcare and life sciences industries, including cutting-edge software applications.

Advisors

There are a total of six advisors listed on Bread’s material, all with a large amount of experience in blockchain.

Charlie Lee: Inventor of Litecoin, Co-founder and Director of Engineering at Coinbase

Ben Davenport: Co-founder of Bitgo and inventor of Facebook Messenger through the acquisition of Beluga. Bitcoin and crypto technical visionary

David Johnston: Inventor and author of token-based fundraising and the original token white paper. Founder of Dapps Fund and a pioneer in decentralized organizations and technologies

Previous Investors

Crunchbase indicates previous private funding of ~$7,000,000 since 2015.

Some of the investors include:

Das Capital

Liberty City Ventures

East Ventures

OKWave

Saison Ventures

Globe Advisors

Strengths

Bread is a well-established startup that has a long track record of successful customer acquisition. Over $4bn is claimed to be protected using the Bread mobile wallet.

The functionality that Bread is seeking to implement is vast. Successful creation of a fully compatible ERC20 wallet that can be used from a phone is a very enticing value proposition for an ever-growing retail market. As private keys are held by the user, they are also able to contribute to token sales that are launching.

The use of localized exchanges is a big step forward in terms of regulatory compliance. The fact that Bread are putting this as a priority means that they are seeking to grow the project in a stable manner with little chance of legal complications.

The team and advisory board have extensive experience in development and commercialization of blockchain technology. With an impressive advisory board including Charlie Lee (Coinbase and Litecoin), there is ample support of quality personnel to steer the company.

Previous venture funding is a good sign with over $7m committed in private capital since 2014.

Weaknesses

One could objectively argue that Bread should have continued to raise venture funding instead of a token sale. This argument has merit, however using BNB (Binance Coin) as a case study, a token which is used to reduce fees may be very well received.

The white paper is quite scarce in detail. There is no ‘Use of Proceeds’ nor is there a complete breakdown of the token allocation.

Bread faces stiff competition from existing and emerging competitors that are seeking to solve the same problems.

Bread will not be offered as a web platform and will remain on mobile.

Download the full report

You can download the full report by clicking here