Swiss travel platform Winding Tree, a blockchain-based distribution platform for the travel industry, has launched its own cryptocurrency known as the Líf token. Designed to facilitate transactions on the Winding Tree platform, Líf is intended to be used by travel companies to distribute inventory and make transactions without the need for intermediaries.
According to Winding Tree, the travel industry is highly concentrated on the distribution front due to core inefficiencies of the internet. Ir argues need for a trusted party on the internet allowed intermediaries to concentrate the sector and raise the barrier to entry for new startups. In travel, consumer facing intermediaries often source their inventory from other B2B intermediaries, causing double marginalisation and inflating the prices. Winding Tree is building a decentralised alternative to the current concentrated travel distribution landscape, where anyone can access inventory directly from the suppliers.
VIDEO – Quick Overview of Winding Tree
Mezi VP travel strategy and partnerships as well as Winding Tree advisor Johnny Thorsen, spoke at the 2017 CAPA-ACTE Global Conference Sydney, when he first broke the news Winding Tree would become the first travel crypto company. He noted the strong potential for new and innovative services to be developed from this platform.
Currently, Winding Tree is in the Token Generating Event (TGE) phase, which began on 01-Feb-2018 and goes until the end of 14-Feb-2018. During this phase, investors have the opportunity to purchase as many tokens as they see fit. The price to buy Líf tokens during TGE is set arbitrarily because the actual value of Líf will be determined by the outcomes of the TGE based on generated supply. This means the price of Líf will be determined purely by supply and demand.
The tokens generated during the TGE will be the only Líf tokens in existence. Consequently, this makes the token as a currency a deflationary currency, as no more tokens will ever be created. However, during the TGE the market will decide how many Líf tokens will be generated, and during these two weeks, there is no cap on how many can be issued.
The maximum Winding Tree will receive as a result of the TGE is USD10 million. Although the number of tokens issued is uncapped, the company will not receive all of the money raised during the TGE. The excess money will go into a smart contract which buys back Líf tokens from anyone and then destroys the Líf tokens it bought back. The USD10 million raised will allow Winding Tree to move into full production and become a new distribution platform
Winding Tree’s logic is to use Líf to pay for the transaction cost for selling travel via the platform. Effectively this is a utility token, where a supplier must have Líf in its account in order to sell anything.
Multiple major travel companies have already decided to partner with Winding Tree, including the Lufthansa Group, Air New Zealand and Nordic Choice Hotels. The partnerships include a number of potential uses for the blockchain technology including cargo and baggage tracking, retail, distribution and loyalty programme opportunities.