What Is Bananacoin?

Bananacoin is an Ethereum token that was offered for sale via an initial coin offering (ICO) in 2017. The project was led by a team of Russian entrepreneurs who wanted to raise funds to expand an environmentally friendly plantation in Vientiane province, Laos. The developers set out to use the capabilities of a blockchain to raise investment for their project and as a tool for providing transparent payments to its investors in the future.

Key Takeaways

  • Bananacoin is an Ethereum token that was sold to raise funds for a banana plantation in Laos.
  • The coin was conceived to expand cultivation capacity and facilitate exports of Lady Finger bananas to China.
  • Tokens were priced at $0.50 each with the first one million tokens sold at $0.25 each.
  • Backers of the project have not updated their website or social media channels in 2020.

The token's backers have posted no significant updates to the project's website or social media channels in 2021. In addition, the Bananacoin token does not appear to trade on any major exchange.

In the ICO, the price of each Bananacoin was set at $0.50 and pegged to the export price of one kilogram of bananas. A pre-sale period offered the first one million tokens for sale at a 50% discount. Bananacoin intended to sell 14 million tokens and raise more than $7 million, although just 6.8 million tokens were ultimately issued. 

Understanding Bananacoin

The project's backers believed they could tap into a growing Chinese demand for bananas. At the time, they pointed to figures that indicated that Laotian banana exports were shifting from Thailand to China. They argued that China lacked suitable arable land for banana cultivation. Bananacoin would take advantage of rising Chinese demand by cultivating Lady Finger bananas, which were said to command higher prices than other banana varieties.

Buying Bananacoins is essentially the same thing as investing in the fruit business; investors will see returns on their investments if the price of bananas rises.

To this end, the Bananacoin project intended to expand cultivation from 100 hectares to 360 hectares and eventually 1,000 hectares. It believed product sales would grow by 360%, which project backers claimed would double the value of Bananacoin within 18 months.

Visitors to the Banancoin website can also find the address of the Bananacoin farm on the FAQ page.

Criticism of Bananacoin 

Critics of Bananacoin focused on the token sale's general terms and conditions, under which investors could not make "any claim of any nature whatsoever against Bananacoin" for any failure to carry out its obligations. The document also stated that Bananacoin could terminate or suspend terms with an investor without any prior notice.

Other critics noted that while the project's white paper claimed that tokens could be exchanged for goods or equivalent monetary compensation, the backers failed to elaborate how redemptions would be handled or make provisions for audits. (It's also worth pointing out that many investors may not want large quantities of extremely perishable bananas shipped to them.

Bananacoin peaked at $3.68 in March 2018 and subsequently crashed. As of April 2021, according to Etherscan, Bananacoin was worth $0.01 each with a fully diluted market cap of $86,101.72.

Bananacoin was intended to be pegged to the export price of one kilogram of bananas. Presumably, the price of one kilogram of Lady Finger bananas is greater than $0.01; for that reason, the peg has failed.