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Well ICO Review

Before reading this article, please read our disclaimer found at the bottom of the article or here.

The Healthcare Token

Introduction

WELL is a California based company (Delaware Corp), which is looking to connect healthcare specialists all around the world with patients. What makes them interesting is that their founder has personally suffered through a terrible experience with the US healthcare system after breaking his leg. In addition, the system has been built over the last 2 years.

Their token is the WELL and their pre-ICO started February 25th. The company is trying to raise $3M USD for their soft cap and $28M USD as a hard cap in exchange for their WELL tokens, which will be sold at around $0.1 USD each, minus bonus discounts. Their website can be found here. Their full ICO is scheduled for April 16th, 2018. The minimum investment is $1,000 USD for 10,000 WELL tokens (minus discounts).

The Idea

Founder Ildar Fazulyanov started WELL in April 2015, after having his leg broken. Ildar found himself going through multiple specialists, surgeons, and therapists. The process was so slow that he was still waiting for his first appointment, he broke his leg a second time.

The team at WELL is building a decentralized global healthcare network. Their premise is that it is difficult for patients to find access to remote diagnoses, while health practitioners struggle to invoice and manage payments.

“The WELL token will enable an on-demand system that solves the current problems of cross-border payments, data accessibility, and payment risk, allowing areas with the highest quality of healthcare to serve the entire world.”
Well White Paper, p. 3

The company explains that, as healthcare prices keep rising, people will require a better way to find remote diagnoses by tapping into a network of professionals. They believe that people should have access to doctors all around the world even if they are not able to hire them themselves.

Furthermore the company claims that health insurance has made the whole ecosystem complicated due to the layers of complexity regarding claims. It is yet unclear how they are able to make this system less complicated. The claim is that the immutable nature of the Blockchain network will provide a real patient history that insurance providers can confirm. But we are not convinced that truth is the reason why the insurance process is so slow.

How it works

The current platform enables people to have a videoconference with a doctor. The doctor may potentially be able to provide help through this online service. The results of the session are then recorded and enable the client and practitioners to have access to a medical history of the patient. The platform follows the HL7/FHIR Medical Record standard.

The practitioners can generate prescriptions, discharge notes, and there is also collaboration with different labs.

Traction

This company is one of the rare cases where the incorporation documents are actually made available to the public. They have incorporated as a Delaware Corp since June 4th, 2015, filed as WELL INC (File #5760572). Their logo has been trademarked, and their medical platform was registered for a patent in the United States in August 1st, 2017.

During that time, the company built up a network of therapists, by 2017 the company had conducted over 13,000 patient visits, serving over 1,600 patients (About 8 visits per patient). The company was billed over $1M USD for those services. They also claim to be the fastest-growing on-demand healthcare platform in the world. They now offer therapy in several languages including english, spanish, russian, and chinese.

The company has been certified by multiple healthcare programs, including:

  • Medicare
  • myMatrixx
  • Optum
  • Century Pacific Medical

Their current telemedicine platform has provided over 40,000 telemedicine sessions with 110 doctors, and other specialists. Which includes:

  • Remote monitoring (RMM)
  • Connectivity with patients
  • Conference calls with patients
  • Recording results
Image caption: Image from the original WELL app website found here.

The Token

WELL is built using a standard ERC20 token. The purpose of the token is to be able to transfer funds between patient and doctors, but also escrow those funds. The successful performance of a visit (e.g.) would release those funds.

The team makes money from the following services:

  • Transactions: They take a fee from every transaction
  • Ancillary Services: They provide translations, pharmacy orders, training, etc. for a fee
  • Remote Patient Monitoring: They can set up iPads and other infrastructure at hospitals
  • Network Access: They charge caretakers and hospitals a fee to join the network

They will create roughly 1.5 Billion tokens (worth $150M USD). 40% will be issued for the crowdsale, they will keep 20% for the team (why so much?) and release the last 40% over 4 years at a rate of 10% per year.

Follows this chart:

Image Caption: Token Distribution and Burning from WELL White Paper Page 34 Note: should be 1,5B

Technical Details

The company provides no technical details on their 45 page white paper. We wonder if they will eventually release a technical white paper for review. For now we only know that they will potentially use an ERC20 token which they expect will be traded on exchanges.

The white paper also claims the platform will maintain a “one-to-one mapping with legally bound promises for health care services.” We have no idea or understanding how this is implemented, let alone promised or confirmed. More details on the “Criticisms” section of this blog.

ICO Details

WELL’s crowdsale began this February 25, 2018 and will continue until they reach their hard cap of $28M (ETH or BTC) or until May 25th, whichever happens first. They will sell 1.5 billion WELL tokens in exchange for the $28M or about 60 WELL tokens per $1 USD.

The company accepts: ETH, BTC, LTC and fiat. The discounts will follow this table:

Image Caption: Image from WELL White Paper Page 33

Use of Funds

The company will keep 20% of the tokens and they will be used for:

  • Building the WELL platform
  • Staff Salaries
  • Sales and Marketing Expenses
  • Recruiting
  • App Development costs

We are not sure why the company gets to keep such a large percentage of the token, when they clearly have already a very detailed business model for the platform. Why are users expected to pay for the development, deployment and usage of the platform while simultaneously not getting shares and only a small bonus discount?

The Team

The CEO of WELL is Ildar Fazulyanov, born in Russia and studied chemical engineering at the Moscow Bauman University. He then studied an MBA at Tuck School of Business (New Hampshire, US). The white paper also mentions experience in healthcare, accounting and business development.

Co-founder Alex Prokhorov is another Russian national, BYU alumni and Fintech investor. He began as a financial advisor at Ernst & Young in NYC and quickly became an investor. That said, this information comes from their white paper, on the white paper there is a link to his biography which goes to an anonymous profile with no extra information.

The rest of the team includes:

  • Dr Matthew Lefferman — Clinical Director (Only Medical Doctor in the team)
  • Dmitry Semenov — Development Team Lead (Worked at Qvolta)
  • Josh Fonger — Process Architect
  • Yetkin Timocin — Developer
  • Dr. Istvan Csatari — Designer

Needless to say, the team has experience and looks extremely competent. The company also has a series of advisors in finance and medical information.

Criticisms

The white paper drags along very simple concepts and even goes as far as explaining game theory and the prisoner dilemma (with examples). However, what the 45 page white paper does not explain or provide answers to is much more serious:

  • Insurance Claims
  • Private Information Safety
  • Physicians Credibility / Competence
  • Negligence Possibilities
  • Guarantees and Licensing

The company also seems to have been successful. So why do they need an ICO? If they believe that the product speaks for itself, and also that Blockchain would be the right implementation for it, why not create a stable token that never changes in price? In the case of WELL it seems that ICOing is more of a gimmick to fundraise, instead of a legitimate use of the Blockchain.

Image Caption: Image from WELL’s White Paper page 27

They also mention that it is difficult for people in developed countries to find healthcare. Would those people have the technology or the education to utilize a crypto token effectively in order to deal with their medical worries? Would we have to explain to the sick and elderly how to use this technology? Do we need to train doctors, hospitals, and patients to use an immutable ledger, that does not forgive transactional errors?

The current list of people expected to use the token are:

  • Patients
  • Doctors
  • Insurance companies
  • Healthcare systems
  • Charities
  • Research Institutions
  • Loan Companies
  • Pharmacies and Pharmaceutical companies

Who provides the education for everyone? WELL? Will they charge for that? There are a lot of unanswered questions. If you want to see the complete list of people who are expected to use the token, we can thankfully point at WELL’s Token Matrix found here.

It is also important to mention:

“All services provided by healthcare professionals on the WELL network constitute recommendations only, and patients must seek official diagnosis and care from healthcare professionals licensed in their corresponding jurisdiction”
WELL White Paper Page 28

In other words, there is no guarantee or repercussion for any negative side effects from the network. This means that if you are paired with a disreputable or unlicensed practitioner, you will not be able to seek compensation if something goes wrong. We wonder how this will affect insurance claims through the platform, when they cannot guarantee the competence of their doctors.

Lastly, the platform guarantees that it will maintain “legally bound promises” for health care services. There is no discussion on how this is actually achieved, or the steps and measures to keep this promise. Our concern boils down to the fact that we do not know what prevents a physician from lying or making a mistake, and what steps will be taken to avoid these issues.

One of the problems ultimately affecting Blockchain based information is that it is by nature immutable, and transparent. That does not sound very useful for healthcare records without very well thought-out legal and technical implementations.

Conclusion

There are multiple sides that make this ICO an interesting story. The first is the fact that the founder has a personal attachment to the problem. He broke his leg, experienced terrible service, and then broke it again before he saw the first specialist. The company has also operated since 2015 and is quite open about what they have accomplished in that time.

This company has patents, copyrights, and incorporation documents, and while those are fantastic transparency moves, they make us wonder: does the company really need an ICO? If they have already built the bulk of the platform and its fees, why do they need to go to the public for funding?

We also struggle to find the use case for the cryptocurrency. Those that need this product the most are children, the sick, the elderly, and people in developing countries. Can we expect those people to have the technological education to handle a cryptocurrency asset in order to pay for their needed medical attention? We do not know.

The company also expects the minimum investment for the ICO to be $1,000 USD. Won’t this limit the investment participation heavily? Time will tell. Note: It is also important to note that if you are a citizen or permanent resident of the US, you can only participate on this ICO if you are an accredited investor. Citizens of China and Singapore are disallowed outright from investing.

This looks like an incredibly competent technology and project, and we are sure that many of our questions could be answered by the WELL team. Ultimately, our biggest question is whether or not a Blockchain implementation is the best way to store Medical Health Records, given how risky negligence is, and how social hacking can cause incredible damage to these systems, as well as the barrier to entry required to understand and participate in them.

We are looking forward to seeing this story develop.

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