ICO Focus: Interview With Vladimir Lupenko of VLB

We caught up with Mr. Vladimir Lupenko, co-founder at Vehicle Lifecycle Blockchain (VLB) for an interview session and this is what was discussed;

Hello Vladimir, can you introduce us to the VLB project?

Vehicle Lifecycle Blockchain (“VLB”) is a decentralized infrastructure platform that underpins a network of business and operational relationships between a broad range of vehicle lifecycle industry participants, which use a suite of software to access it.  VLB tracks and records everything that happens to a vehicle the moment it comes off the factory floor to the moment it is recycle in the junk yard.  This wealth of information and the interrelationships that form between industry participants in the course of recording transaction in the blocks on the chain creates a slew of value propositions for every player that uses VLB Tokens to record and use the information.

VLB will be rolled out in two stages:

  • development and deployment within the confines of a controlled environment of CarFix, where CarFix can act as a moderator and an adoption force to ensure that the critical usage rate is reached
  • decentralization and globalization of the platform where diverse nodes can perform proof-of-stake to validate blocks and certain nodes (such as car manufacturers, OEMs and insurance companies) can act as springboards and become catalysts for global formation of ecosystems that are similar to CarFix, yet completely independent of it.

During stage 2, VLB will have an openly accessible API and the interface software will be open source.

What inspired the vision for VLB?

Vehicle Lifecycle Blockchain is a result of over 12 months of building an ecosystem to streamline one of the most opaque industries left in the world.  Auto repair and car ownership, in general, is where the taxi industry used to by before the advent of Uber.  In April 2016 we launched CarFix with the purpose of bringing order and transparency to the price and scope of repair services that car owners endure.  For many people, a vehicle is a means to support their livelihood or make their lives more convenient.  There is no reason to overpay or be cheated by unscrupulous repair service providers.

We built CarFix, which currently has over 500 carefully selected and trained repair shops in its system, 10 major distributors and over 250,000 customer repair jobs.  As the business grew, we began bringing other industry constituents into the CarFix ecosystem: auto insurance providers, lenders, car manufacturers and fleet management company.  We began streamlining a much broader industry: vehicle lifecycle industry.

In July 2016 CarFix founders realized that by introducing blockchain to the current ecosystem, we can not only create value for consumers but for every industry participant that uses their respective interfaces to interact with one another via the blockchain.  For example:

  • insurance companies receive access to accurate immutable records of collision repairs that allow them to cut claim management costs
  • auto manufacturers can eliminate over 30% of their warranty costs that are due to untransparent repair shop operations and fraud
  • car manufacturers can also save staggering amounts of money on avoiding mass recalls and implementing targeted recalls by determining the faulty batch of spare parts and identifying the vehicles that they were installed on and targeting their owners directly
  • car buyers can receive access to a “trustless” source of car history data and remove distrust from used car transactions
  • repair shops can receive access to new customer flow from blockchain based consumer apps and from insurance companies
  • dealers can reduce significant customer attrition of “post warranty” customers

This list is endless…

We became inspired by the sheer magnitude of the opportunity that we already are pursuing.  Blockchain gives this opportunity global scope and puts its execution and rollout across the vehicle lifecycle industry on a fast track.

What is the current market size for the industry and what is your projected market share in the next 24 months?

Vehicle lifecycle industry, which is comprised of auto sales, auto repair, auto insurance, auto finance and spare part distribution is $1.8 trillion in annual turnover in Europe and the US.  CarFix as an operating company will focus on two markets: Russia and California.  However, as described above, VLB does not need CarFix to expand globally.  Success in Russia and California with such VLB Super Nodes and car manufacturers and OEMs will determine how broadly they adopt the VLB across the markets that they operate it.

We expect within 2-3 years to achieve adoption with a select number of Super Nodes (primarily, 2-3 vehicle manufacturers) in Russia and the US, which will represent circa 15% market penetration.  It is important to emphasize that this industry penetration rate will be achieved through token powered VLB in a decentralized fashion independent of CarFix regional operations.

In which countries will you be operational?

CarFix will stay operational in Russia and California.  VLB will be distributed across the US, Europe and Russia.  Again, global expansion will be driven by the strategy of “Super Nodes”.

Can you briefly tell us about your team?

Founders are serial entrepreneurs and private equity / venture capital professionals.  We have achieved multiple successful exits on our own accounts and as investment professionals at institutional investment funds.

IT team consists of over 30 professionals focusing on the interface software.  We are also insourcing a team of world class blockchain developers and engineers from NASDAQ’s Qiwi Blockchain Technologies.

Are you in talks with exchanges to trade your tokens and may we know some of them?

We are aiming to have the tokens trade on top 5 exchanges within two months. 

Briefly run us through how the process of VLB token crowd sale will be executed?

We started the private placement process leading up to the crowd sale that will commence on November 27 and will end on December 17.  We expect a significant portion of the ICO proceeds to be raised during the private placement process from institutional and professional accredited investors.  The crowd sale period will be divided into four 5-day sub-periods.  During the first sub-period, the token purchasers will receive a 30% bonus, second, 20%, third, 10% and during the fourth sub-period they will be sold at full price.

What fundamental economic drivers underpin the value of VLB Tokens?

An overwhelming majority of utility tokens (as well as a significant number of crypto currencies and security tokens) have nothing but speculation driving post-ICO exchange pricing.  Fundamentals and valuation methodologies that quantify token value accretion possibilities are not applicable to almost all traded tokens.

When asked “How do you look at the fundamentals supporting token pricing?”, a very prominent Silicon Valley VC and crypto investor responded: “What fundamentals? There are none.  Valuation is pure emotion.”

To us as founders of CarFix and issuers of VLB Tokens, that kind of approach is crazy.  It goes against everything that we stand for as entrepreneurs and former fund managers.  How can legitimate ICO backed companies build a transparent industry when majority of its participants skirt such basic concepts as fundamental valuation when making investment decisions.  It would be ludicrous to ignore fundamental valuation drivers when making an equity investment decision, however speculative it may be.  Why are ICOs not held to the same standards?

Why VLB Tokens are dramatically different from everything else?  Because the fundamental value drivers are very clear-cut.

A VLB Token is required to be contributed by each Industry Participant to its respective portion of the transaction when recording it on the blockchain.  Please refer to the White Paper for a detailed explanation.  One VLB Token represents a transaction cost for each Industry Participant.

How much would an Industry Participant be willing to pay for one VLB Token?  The price will be reflective of the actual monetary benefit that the industry participant receives.

  • repair shops receive customer flow by using VLB; hence, customer acquisition costs that they save is the upper bound of what they would be willing to pay per VLB Token (circa $75 in US, $50 in Europe)
  • insurance companies can reduce claim management costs – circa $100 per customer
  • car manufacturers can get rid of the excess warranty costs that they incur as a result of inefficient and fraudulent repair shop practices – circa $120 per vehicle

ICO price of VLB Tokens is $0.50.

A more precise analysis of VLB Token value fundamentals is presented in Appendix A of the White Paper.  Because the utility of VLB Tokens can be clearly assessed by their ultimate users on the blockchain, their value is resistant to massive speculation and will reach equilibrium on exchanges that is reflective of actual economic benefits achieved by the users in the form of cost savings.

Thanks for the interview time Vladimir, we wish you a successful token sale.

Thank you too ICOWatchlist, especially for your promptness.

For more details, follow the VLB ICO here.

Disclaimer: This write-up is sponsored and does not fully reflect the opinions of any ICOWatchlist employee. It is not an investment or trading guide. It is advisable that you do your own independent research.