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RE: Kexcoin Financial Model - Demonstration / Mock Projections
Thanks for providing the illustration. I follow your analysis up until the speculation fun part. I don't understand how the future price of BTC figures into the return for a long term KEX holder. Can you please elaborate?
Because when we buy back Kexcoin we will be paying in BTC.
Also when we distribute the share of increased property value this will also be paid in BTC.
Ok. Understood. Using the same assumptions in the illustration, if an ICO participant were to purchase 1 BTC worth of KEX at the .0025 BTC price they would end up with 400 KEX. Per the illustration 991.76M will be distributed over the life of the project. This translates into 116.678 / KEX (991.76M/8.5M KEX) or 46,671. If BTC is at 300,000 wouldn't the ICO participant receive .15557 BTC if all held until the end?
No. If you buy 400 Kexcoins during the ICO and don't sell any, why would the number of Kexcoins change to 116.678?
It wouldn't, your balance would remain at 400 Kexcoins but the value of those coins would change.
Assuming your yield and property values assumptions are correct, you actually need to divide the total fiat returned to investors by the total number of coins (keep in mind that 10M totally are issued, including the 1M for founders' compensation and 0.5M for contingencies).
So you get a total return of USD 99.176 over 30 years per coin for an investment (at USD4000 assumed BTC value) of 10 USD.
Of course this number is an average and only applies to people eligible to half of the capital gains, meaning people selling before 30 years will get less, people not eligible to the capital gains will get only USD 44.43 per coin.
Chris, can you confirm this calculation?
Agreed. I should have divided by 10M coins instead of 8.5M. Your calculations illustrate what I was trying to communicate. Thanks!
Please re-read. That's not what I'm saying. By dividing the total profit by the number of coins it comes to 116.678 per KEX (not 116.678 KEX). Since the participant originally purchased 400 KEX then one could expect them to receive 46,671 in return from their original investment of 4000 based on the numbers in your illustration. If BTC appreciates to 300,000 then, if the participant would have just held on to the 1 BTC they would have 300,000 instead of just 46,671.
I'll run this by Michelle, our financial analyst and see if I can get a better answer for you.
One more thing about your simulation, you say you are using a 3% estimate rent increase per year, but your formulas are actually using 9% per year.
That’s because from year N to year N+1 you consider that your tenants will pay rent worth 12% of the property value after inflation (+6% from previous year) and will on top will pay a 3% rent increase (you also add the 12% return on the additional 2.89 properties you will purchase).
Gross income on year 2 : 11.47 = 12% x (85 + 5.1 + 2.89) + 0.31
I don’t know the UK student accommodation market, but a 9% increase per year for the next 30 years seems a bit bullish. Even if this is likely to happen (most likely in a higher general inflation environment), you should just say you are using 9% instead of 3%.
Can you confirm that assumption?
Thanks!
It's been 2 days since these questions were asked, will there be any answer before the ICO starts?
I suggest posting questions in the Telegram chat group, we can answer much quicker in there because we are monitoring it 24/7 https://t.me/joinchat/CHwvZEHIZ2FIfDHhm6UAdQ
I asked you to please come and post them in the Telegram chat group so everyone can see them and the answers: https://t.me/joinchat/CHwvZEHIZ2FIfDHhm6UAdQ
@marketingmonk - I think its time to respectfully agree that we have different opinions regarding the terms of the KEX token offering. I appreciate you and Simon taking time to answer all my questions. Even though my opinion differs, I genuinely appreciate your openness and accessibility. I wish you the best going forward!