Market opportunity
The Western world takes a lot of things for granted, and one such thing is reliable weather forecasting. In places like Europe or the United States, advanced technologies make it super easy to access precise weather forecasting models freely and in one click. But this is not a reality everywhere. And the truth is, much of the world lacks accurate weather forecasting.
As pointed out by the researchers Manuel Linsenmeier and Jeffrey Shrader in a recent paper , a 7-day forecast in a rich country can be more accurate than a one-day forecast in some low-income ones. Two main reasons for this: First, there are far fewer land-based instruments and radiosondes measuring meteorological data in poorer countries as the CapEx for building massive weather infrastructure might not make much sense. Second, the frequency of reporting is much lower. This gap in quality and reliability is a real problem and while good weather forecasts are often seen as simply an add-on to one's comfort—knowing when to bring an umbrella to work or where to go kitesurfing on the weekend—they are, in fact, absolutely crucial. Sometimes, it can be the difference between life and death.
One concrete example could be around food security. Today, one-third of the world's food is produced by smallholder farms (mostly in low income countries), and they need to make many decisions throughout a season that are directly impacted by weather information. Good decisions can lead to increased yields and income, resulting in better food security for the entire planet and improved living conditions for the farmers. Further, accurate weather forecasting models are also key to better manage storms, wildfires, flooding, and other extreme events, allowing cities and communities to prepare effectively. So all in all, reliable global weather forecasts hold immense economic value for society.
Given this, there is a strong case to be made that crypto and blockchain technology can help improve weather forecasting availability and reliability through decentralised physical infrastructure coupled with the right tokenomic incentives. This is the mission behind WeatherXM, and this is why we believe that this project is compelling.
Overview of WeatherXM
WeatherXM is a DePIN (Decentralised Physical Infrastructure) project that aims to build an entirely new weather data economy by leveraging the value proposition of crypto to become the most comprehensive and accurate weather network available.
It achieves this by creating a decentralised network of weather station devices that collect, store, and process environmental data on a blockchain to create hyper-local weather forecasts as well as Web3-native use cases such as on-chain prediction markets and parametric weather insurance products. To incentivise the station owners to operate their stations, $WXM, the utility and governance token of the WeatherXM network, is rewarded based on the quantity and quality of data they contribute.
As of writing, there are a total of nearly 7,800 stations worldwide and in the longer term, the objective of WeatherXM is to have weather stations everywhere and ensure that even the most remote locations can benefit from accurate weather information while deriving economic value from running those stations.
Team & Investors
The team behind WeatherXM is experienced and seems well-fitted to properly execute the project mission. Here’s a quick breakdown of the main leadership positions :
- Manolis Nikiforakis - CEO
Has over 2 decades of experience in the IoT (Internet of Things) sector. - Stratos Theodorou - CPO
Senior software engineer with extensive experience in architecture and design principles, passionate about processes and workflows. - Nicolas Tsiligaridis - CTO
Comes with over a decade worth of experience as a CTO and strong engineering knowledge. - Thanos Daskalopoulos - COO
Has over 20 years of experience in business development, service management and software product development within facility & energy sectors. - Nikos Pagkratis - CFO
An all round finance professional with a deep background in operational finance, strategic planning and forecasting, re-engineering and auditing skills.
Moreover, WeatherXM also managed to raise around $12.7 million from notable investors such as Placeholder VC (Chris Burniske ), ConsenSys Mesh, Protocol Labs, or Borderless Capital.
You can find notable investors here: https://weatherxm.com/investors/ .
Tokenomics
$WXM is an ERC 20 token implemented in Arbitrum One that powers the entire weather data economy.
- It acts as the primary currency for WeatherXM and will be necessary to acquire licensing rights.
- $WXM holders will be part of the future DAO and will be involved in the ecosystem governance.
- It is the incentive mechanism to reward station owners.
The token just had its TGE (Token Generation Event) on May 30th, and according to CoinGecko , the current market capitalisation of the project is around $49 million and with an FDV (Fully Diluted Valuation) of $88 million. The total supply of $WXM is 100 million and the initial distribution is as follow:
- 55% - Station rewards: 55 million $WXM will be distributed linearly on a 10yr period to station owners as an incentive mechanism for providing data to the network. Because Weather is a long term project, the reward will be linearly distributed over 10 years. Now, out of those 55 million, 3 million is especially reserved for early participants of the beta phase. With a different distribution schedule.
- 30% - Initial supporters: 30 million tokens will be allocated to early supporters of the project (team and investors) and will be distributed linearly over a period of four years with a one year cliff.
- 10%: Treasury: 10 million $WXM will be reserved for the DAO treasury for the development of the ecosystem. Token will be unlocked linearly over five years, starting from the TGE.
- 5% - Liquidity support: 5 million $WXM will be provided to token exchanges to support the liquidity.
Comparative study
An exclusive Alpha opportunity
This project is innovative, nascent and impact driven and it can be argued that one of the best ways to capitalise on this opportunity is to become an early stage weather station operator and earn $WXM rewards. However, running a station is not straightforward and requires a lot of logistics. This is why we’ve crafted this alpha opportunity: to provide an easy and seamless way to participate in this new Weather 3.0 economy in just one click.
Here, investors will have the opportunity to buy a share of a weather station. And for every weather station purchased, WeatherXM is committing to deliver a second one for free. The stations are then donated to individual operators in strategic regions including Mexico, Colombia, Venezuela, Kenya, Uganda, Liberia, South Africa, and Madagascar. The rewards generated from the weather stations are then split among operators and investors. This is a way to have a positive impact on the world by helping farmers with better models and providing them with an additional source of income. All of this while generating compelling rewards for investors in this alpha opportunity. A win-win situation for everyone.
Term sheet
Scenario analysis
Long term projection
It is impossible to estimate with precision what the rewards in $WXM are going to be through the entire period, as the latter is affected by various factors. But one thing we can do is to use a set of assumptions to try and estimate the rewards per weather station for the entire period to subsequently estimate the potential return on investment of this alpha opportunity.
So for this study, we are using the following assumptions:
- Based on the WeatherXM website , we note that the average tokens awarded to a station in the last 30 days is 84 $WXM. We expect it to be the same for the next 6 months.
- Following this, we assume that the average rewards per station will decrease by 20% every subsequent 6 months.
- Duration of the rewards is 36 months.
With that in mind, here is a potential return simulation over the whole period:
A Focus on 2025
Using the same sets of assumptions and different average FDV through the period, the expected return on investment of the weather stations by the end of 2025 are:
Based on this, we note that even with an FDV of $50 million, the investment is expected to break even by the end of 2025, with still another 20 months of rewards left. In contrast, if the FDV stays at the current level, the investment is expected to already yield a x1.75 by the end of 2025 only.
FAQ WeatherXM Vault
What is the WeatherXM Alpha Deal?
The WeatherXM Alpha Deal includes the purchase, setup, and operation of WeatherXM stations on investors’ behalf. For every weather station purchased, WeatherXM commits to delivering a second one for free. These stations are then donated to individual operators in strategic regions, mostly within developing nations. To reward weather station operators, WXM token (utility token of WeatherXM) will be distributed and split among operators and investors, who will receive the rewards directly in the SwissBorg app every month.
What is Borger Rank and what are the Vaults?
The Borger Journey is a loyalty program designed to enhance the SwissBorg experience for our valued users. Based on your BORG holdings, you are a member of one of the Borger camps. The higher the camp, the better the rewards and opportunities. One of these perks is also eligibility for the Alpha Vaults. Based on your Borger camp you are eligible for one or more of the following vaults - Bronze, Silver, Gold, or Diamond. You can find which vaults you are eligible for in the app. Every user will be eligible for the public vault.
Where can I learn more about the WXM token?
You can learn more about the WXM token on CoinGecko .
Can I have more information about the current WeatherXM network statistics?
All the information about the network can be found on the WeatherXM Explorer website.
Can you tell me more about rewards? How and where will I receive them?
By investing in this vault, you will be eligible to receive monthly WXM token rewards for a period of 36 months. Reward distribution will start no later than 5 months after the vault is closed, so that all the machines are operational. WXM rewards received will be liquid as soon as you receive them.
Will I get the rewards from one specific station, or are all the stations from the sale pooled together?
All the rewards will be pooled together and spread equally across all investors.
Are the rewards fixed?
No. The rewards in $WXM are not fixed and depend on different factors, like the number of active stations or the stations uptime. But you can refer to the investment thesis for projections.
What return could be reasonably expected across the full investment period?
Again, please refer to the investment thesis for projections.
What happens to the station license NFT at the end of the distribution period ?
The license expires, it won’t be sold or anything.
Are station holders eligible for station airdrops?
It is too early to say as this will depend on the eligibility for the potential airdrops. If SwissBorg receives an airdrop from tokens / NFTs belonging to its users, it will redistribute it to the users.
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