A Russian based start-up has raised more than $3.8 million through a blockchain based ICO for the setting up of a manufacturing plant to produce an industrial material called zirconium which is in demand due to its fire resistant properties.
The funds will be reflected in an Ethereum based token as well as in WavePlatform assets, called ZrCoin. The start-up will buy back these coins at the market price of 1kg of synthetic zirconium, currently standing at $2.80.
Alternatively, investors can ask for the delivery of zirconium, making the token fully asset backed and making the offering somewhat novel in this space. Andrey Nikonorov, ZrCoin co-founder, stated:
“We can now confirm that the plant for the production of raw materials in high demand by the industry will be launched. Thanks to blockchain technology, it was possible to attract financing in an extremely short period of time. The bold decision to offer a new investment vehicle backed by the commodity that we plan to produce was met with interest.”
The project team previously invested $1 million of their own funds in green technology for the production of zirconium dioxide. According to a press release, the unique feature of this investment was the synthesis of zirconium from industrial waste.
That means zirconium, one of the most popular fire-resistant materials in the world, will be produced in an environmentally safe manner in Magnitogorsk in the Chelyabinsk Region, with production expected to begin during spring 2018.
That makes this one of the first token sale that is based on physical production of goods, such as industrial materials, suggesting a new way of raising finance may become somewhat more mainstream and a valid option, not just for internet based projects, but also more traditional industries.
It follows yesterday’s announcement by KiK, a popular chat app used by 300 million individuals and 40% of USA’s teenager, that they are to launch an ethereum based token called Kin, suggesting the ICO model may be coming to Silicon Valley.