Management believes eXeBlock Technology Corporation (CSE:XBLK) could generate revenues as early as Q2/2018, when its first DApp (eXe50/50) for Peerplays is commercially rolled out
SmallCapPower | January 24, 2018: eXeBlock Technology Corporation (CSE:XBLK) is focused on the development of custom Blockchain-based software applications called DApp (decentralized applications). Decentralized applications connect providers and users directly, bypassing the need for any middleman (i.e: Gmail, Linkedin, Uber), to manage information. In turn, end users drive the success of DApps, thereby creating an efficient, open-sourced method of doing business. eXeBlock Technology is one of the newest companies to enter Blockchain space, listing in November 2017. eXeBlock Technology plans to launch white-label (product by one company that another company rebrands to appear like their own) and operate a per-use revenue model.
In December 2017, the Company entered into an agreement with the Peerplays Blockchain Standards Association to develop four decentralized applications over the course of the two years. As part of this, eXeBlock Technology has posted its first DApp, eXe50/50, on TestNet for feedback with planned commercial rollout over the next four to six weeks.
The eXe50/50 DApp utilizes Blockchain technology to enable organizations to use their own database and lottery specifics to create on-demand fundraising. The Company’s target business are global fundraising and charitable groups. eXeBlock Technology believes the eXe50/50 DApp is superior to its peers because the product takes a lower cut and provides on-demand fundraising. For example, during a Toronto Maple Leafs’ hockey game, users could participate in a 50/50 draw both at the game and at home. This results in a much greater reach, as well as the possibility for a significantly larger winning draw. The 50/50 platform is anticipated to be launched and marketed during Q4/2017. eXeBlock Technology retains a fee on every transaction.
Management believes eXeBlock Technology could generate revenues as early as 2Q18, when eXe50/50 DApp is commercially rolled out. eXeBlock Technology is planning another DApp launch in 2018, with many more in the pipeline for 2019 and beyond. As such, the Company’s financials should improve meaningfully over the next couple of years. Despite such a favourable outlook, eXeBlock’s stock price has slid ~50% from its listing price of $1.40 to $0.71 (market cap of $43.6M). This performance could be attributed to the recent cooling of Blockchain ‘fever’, driven by the fall in cryptocurrency prices, as the has dropped from a high of ~US$19K in December to ~US$11K today. As a result, when eXeBlock Technology moves forward over the next few quarters, and executes on its milestones, its stock price could see a sharp move to the upside.
Investment thesis
- Focused on developing disruptive decentralized applications (DApps) for Blockchain
- Agreement with Peerplays Blockchain to develop 4 DApps
Pure-play Blockchain technology company developing decentralized applications (DApps)
eXeBlock Technology is one of the first public Canadian pure-play Blockchain companies focused on the development of disruptive decentralized applications using Blockchain technology. The Company designs and develops both custom Blockchain-based software applications for third parties, as well as branded DApps for use by organizations and corporations. While the custom apps will generate contract-based revenues, eXeBlock Technology plans to employ a per-use (embedded) revenue structure for its branded DApps for recurring revenues. Apart from application development, eXeBlock Technology also provides Blockchain technology consulting.
Services offered
Large market opportunity for DApps: Based on the decentralized technology, Blockchain, though in its infancy, is gaining rapid popularity and could eventually displace the current centralized transaction processing, presenting a significant first-mover opportunity for eXeBlock to build branded and white-label applications. An early entrant to the development of decentralized applications, eXeBlock Technology believes it can fill the void in the usable software applications that fully exploit the power and value inherent in the Blockchain technology. 
Milestone agreement with Peerplays Blockchain to develop 4 DApps
On December 19, 2017, eXeBlock Technology signed an agreement with the Peerplays Blockchain Standards Association to develop four decentralized applications over the course of two years. The DApps will be compatible with the Peerplays Blockchain platform and each app will be released in Beta form on TestNet in advance of any production release to gather feedback from the Blockchain user community. eXeBlock Technology will receive ~940,000 Peerplays (PPY) tokens, digital assets that allow holders to vote on operational modifications within the network, as well as share in revenue generated by DApps operating on the Peerplays Blockchain platform. At the current price of US$11.81 for each PPY as per Coinmarketcap, it has reached a market cap $46.7 million. The agreement is an important milestone for eXeBlock Technology, as it allows the Company to penetrate a high-value, untapped market in Blockchain through an established network with the unique capacity to support a significant user base.
Launches first DApp; plans to roll out another in 2018
On January 8, 2018, less than a month after signing the Peerplays agreement, eXeBlock Technology posted its first DApp eXe50/50 on TestNet for feedback. Development of the DApp, created to empower charities globally to use Blockchain-based technology to fundraise on-demand, will continue for another four to six weeks. Once the app is launched, the eXeBlock Technology will generate revenues from each 50/50 draw completed on the Peerplays’ network.
eXeBlock Technology is also planning to launch its second app in 2018. Called Freedom Ledger, the DApp will facilitate transactions for users that do not hold a cryptocurrency account, a significant opportunity not only for eXeBlock Technology but also for the broader Blockchain community to expand the adoption rate of Blockchain technologies.
The Company has sufficient capital to fund the development of DApps for Peerplays, as well as other DApps in its pipeline. In Q4/2017, eXeBlock Technology raised $6.2M in a private placement that will be used for software development and working capital purposes.
Outlook and valuation
As one of the newer kids on the Canadian Blockchain space, having listed in November 2017, eXeBlock Technology is well positioned to capture the substantial market opportunity in the Blockchain application development with its early-mover advantage and singular focus on Blockchain. Management believes the Company could generate revenues as early as Q2/2018, when its first DApp (eXe50/50) for Peerplays is commercially rolled out. With another DApp planned for launch in 2018, and many more in the pipeline for 2019 and beyond, the Company’s financials should improve meaningfully over the next couple of years. As and when eXeBlock Technology generates meaningful revenues, which could be in the next few quarters, its stock price could see a sharp move to the upside.
Disclosure: Neither the author nor his/her family own shares in any of the companies mentioned above.
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