WaBi is a blockchain based loyalty token issued by Walimai, a company that provides a products traceability mechanism to consumers. Walimai started back in 2014 but only started commercializing its functioning application by 2016 in China.
Walimai’s solution consists of an RFID (Radio-frequency identification) label that sticks to the product and can be scanned by consumers with a phone app to check a product’s authenticity. The label contains information on the whole life cycle of the product such as authenticity, background, storage location and more. The labels used by Walimai (1) have a unique code for every single product (2) contain dynamic data frequently changed and synced with Walimai’s servers to avoid cloning (3) are made of very fragile antennas to make moving the same label between several products impossible.
The purpose of Walimai’s ICO and conversion to blockchain in general is unclear as there is no proven technical need to involve blockchain technology. The team claims adopting blockchain and a token based system to par a meta-fragility problem, referring to users losing trust in Walimai’s process of securing all interactions an RFID can have along its supply chain.
The WaBi token’s purpose is to incentivize consumers to scan products. A dynamic that the Walimai team claims is crucial to its counterfeit detection system, even though there are several issues arising from this subject, one being what Walimai refers to as the ‘voting paradox’. The ‘voting paradox’ claims that with a sufficient level of trust in the Walimai brand, consumers might not feel the need to scan the product at all, thus not updating the system. Thus, Walimai has to incentivize users to scan and authenticate their products which creates a very delicate balance. The tokens can be used by the users to get discounts on products tagged with Walimai’s RFID or to buy Walimai protected products.
To kickstart the system, buyers of products protected by Walimai technology will receive some initial tokens when they start buying.The tokens can be used by the consumers to buy more Walimai protected products or to claim discounts and bonuses. Throughout the whitepaper and the company’s documents, there is a slight forced use of blockchain related keywords without necessarily matching their context, such as “proof of purchase” in which they simply refer to a customer that bought a product and “mining” by which they mean the action of scanning a product. It might be a way to attract potential investors that might not have an extensive understanding of the proper terminology. The necessity to shift their technology to Blockchain and run an ICO with such a big raise amount is not built on any solid argument. The White Paper hints from time to time to some blockchain technology advantages but doesn’t connect them with actual consumers need. Another thing is Walimai’s explanation of how certain goods are identified as ‘fake goods’ is sub par, at best.
By August 2017, the Walimai team closed its presale cycle in which it hit the max Walimai requested and raised 300.000 USD. The team is using said amount to power up the ICO. The tokens sold in the presale are still undergoing a lock period, which should last roughly 3 to 6 months. One might be concerned, however, about the lack of a soft cap. In general, not determining a small cap either points towards greed or the company didn’t feel the need to specify a minimum amount for the project to kick off. Another point regarding the token sale is that the hard cap, currently set at $11.5M, seems to be way too high and no where do Walimai explain the reasoning for requesting such a hefty amount in regards to their plans.
Overall, Walimai are a peculiar breed. They have a proper product that’s useful and is already applied on the market. They claim to have signed contracts with 3 physical baby stores to set up a dedicated ‘Walimai shelf’ at their locations. Their team is composed out of competent figures, it seems, and their PreICO reached its raise amount defined meaning there is some support towards their goals. However, it is very unclear as to why they need a blockchain or a token to keep doing what they do. Sure, a blockchain provides many advantages, but in light of dozens of ICOs raising immense amounts of money for no apparent reason these past few months, one might question Walimai’s real motives.