Havven Rating Review
|Start ICO||28 Feb 2018|
|End ICO||06 Mar 2018|
We assign the Havven project a “Positive” rating.
Havven is a project whose goal is to create a decentralized payment system based on its Nomin cryptocurrency, which has a stable exchange rate relative to fiat money. The stability of Nomin is achieved through the creation of a second type of Havven token acting as collateral, guaranteeing stability for Nomin’s rate. The system is designed in such a way that users providing a collateral fund in Havven coins will be rewarded by commissions charged for Nomin transactions.
The idea of the project, in our opinion, is highly significant, since existing mechanisms for stabilizing crypto/fiat rates have significant shortcomings and their reliability raises serious concerns in the community. In the current situation the crypto market needs stabilization, and the Havven platform exhibits many parameters of a stabilized system.
The Havven team includes experienced and qualified specialists in relevant industries. In addition to the core team, the project has recruited highly-qualified advisors who have in-depth knowledge of the management of both crypto and traditional businesses, as well as the broadest connections that offer opportunities for the future promotion of the project.
The terms of the ICO are transparent and fair, and the project documentation describes the system objectively and logically in all detail. In addition, the project has an alpha version and a working repository on GitHub, where anyone can acquaint themselves with the components of the smart contract code for the system being developed.
General information about the Project and ICO
Havven is a decentralized payment network where users conduct transactions in cryptocurrency with a rate stabilized by the network system. The platform involves the use of a dual-token mechanism. Users interested in using stablecoin reward holders with Havven collateral tokens and thus compensate them for the risk of providing collateral, ensuring the stabilization of the platform as a whole. Holders of Havven tokens control the money supply, and rewards are distributed in proportion to the stabilization indicators for each user.
The team is conducting a crowdsale to raise funds for the development and scaling of the Havven platform. The project is implemented by Havven Singapore Pte Ltd which is registered in Singapore.
Crowdsale – 60%
Team and advisors – 20%
Foundation - 12%
Partnership incentives - 5%
Bounties and marketing incentives - 3%
Round 1: Expressions of interest period (closed on 31/01/18)
Round 2: Public sale
Soft Cap: no
Hard Cap: $30m
Price: As 60,000,000 tokens will be available with a hard cap of $30,000,000 USD, with a previous round of discounts the price is subject to a number of factors.
Bonuses: depending on escrow period used at the time of token purchase
Minimum Buying Transaction: no
Maximum Buying Transaction: 5000 USD [Havven Blog]
Accepted currencies: BTC, ETH
Funds allocation: no information provided
Token Issue Date: All tokens will be issued by the 16th March by smart contract, however some maybe escrowed and cannot be traded.
Vesting: team - 24 months, advisors - 12 months.
According to the project blog, during the expressions of interest period the team received a large number of requests for the purchase of project tokens from the community, in excess of $25 million.
During the ICO, participants will be able to choose different escrow periods - this will also depend on the percentage of the proposed discount:
Participants will be able to diversify purchased tokens by this feature buying, for example, 50% of tokens with an escrow of 18 months and a discount of 20%, and the remaining 50% without an escrow period but without a discount on this portion of the tokens either. Such an approach will, the founders hope, provide the system more Havven tokens with a long escrow and therefore potentially attract more users to the platform for further purchase of Nomin stablecoin.
Currently, anyone can join the whitelist for the project and go through the KYC process. The development team warns potential investors not to delay registration, as the crowdsale lasts only 1 calendar week, until March 6, 2018
Description of the services and scope of the Project
Havven is a decentralized payment network that enables the use of stable cryptocurrency for routine transactions. Using a dual-token system reduces the risk of price volatility:
Havvens (HAV) – a collateral token
Nomins (nUSD) - stablecoin
The platform unites users who wish to purchase Nomin stablecoin with holders of Havven collateral tokens, which enables the creation of a stable market for cryptocurrency transactions. Using the proposed mechanism, Havven holders create Nomin tokens, which anyone can use for everyday sales transactions knowing that these tokens are ensured. Holders of collateral tokens are rewarded for being part of the system, enabling users to perform reliable transactions and have stable savings in cryptocurrencies. In addition, the project is even more credible due to the scheme for the Havven token itself - all Havven tokens will be stored in escrow and their price will always remain above the value of stablecoin in circulation.
The current market has a number of similar platforms that use real back-up collateral such as gold or the US dollar. However, the Havven project is designed to use the value of the system itself.
The founders assure that the MVP will be released within 1 week of the end of the crowdsale. The initial version of the platform to be released in March 2018 will possess the main functions announced by the project:
a dual-token mechanism in operation (stablecoin and collateral); both tokens will be traded in the market.
rewards for Havven holders for operations performed.
The project has an alpha version of the platform that reflects basic indicators of future functioning of the system. As well as constant monitoring of the price of Nomin, the team offers to monitor other equally important qualitative and quantitative indicators for the system such as liquidity, volatility, concentration of funds, velocity of money, etc.
Havven also has an open repository on GitHub, where the open code components of smart platform contracts are presented:
Unfortunately, the documentation does not disclose details of the platform architecture or other technical aspects; however, in our opinion this is not required in this case: the white paper describes the system algorithms very thoroughly, thereby giving a comprehensive view of the platform as a whole and tokens in particular.
The global volume for payments is difficult to estimate; however, it is obvious that this market is huge. For example, Visa Inc., one of the world largest retail payment systems, processed payments totaling $6.3 trillion in the course of 2016:
Other than Visa the main payment systems are Mastercard, American Express and Diners. There are many less-visible players such as Paypal and others.
In 2017, the cryptocurrency sphere inevitably impinged on popular international monetary systems. There was a rapid growth in the volume of transactions on crypto exchange platforms during the second half of 2017: [Crypto Voices]
It is clear that currently it is impossible to compete with international payment giants. For example, Visa has the technical capacity to process more than 50,000 transactions per second; as we see from the chart above, Ethereum is capable of processing no more than 16 operations per second on average.
However, the potential of the crypto economy is obvious - its volume amounted to more than $494 billion as for February 18, 2018, and the main cryptocurrencies were the following [CoinMarketCap]:
At the same time, the market capitalization of Bitcoin (Market capitalization is calculated by multiplying total amount of currency in circulation and its prices) was $183 billion and Etherium $92 billion. The latter has grown significantly in the last 2 months, doubling its rate.
If we evaluate market capitalization of Bitcoin in retrospect, according to statistical data, within the period of the last 5 years, the greatest rise occurred during the second half of 2017 [CoinMarketCap]:
However, users of cryptocurrency also often face a converse situation - when its prices rapidly fall over a short period of time. Any cryptocurrency is subject to strong fluctuations, and unfortunately at the current moment this monetary system is not stable.
Compared to traditional assets, volatility for cryptocurrency is high. The average annual volatility of fiat, as a rule, does not exceed 10%. However, exchange rate fluctuations of 20% even over 24 hours are considered normal for cryptocurrency, and the average annual volatility for many of them exceeds 100%, as we see on the graph above using the example of BTC.
The main reasons for significant fluctuations in prices are:
Lack of state regulation of the crypto economy.
For example, the US dollar is supported by the financial institutions of a number of developed countries with stable economies; however, such support does not exist for cryptocurrency and cannot be substantive.
Lack of pegging to tangible value
The exchange rate of a currency is most often tied to a certain commodity in one way or another - for example, oil or gold. In the current situation, there is no such pegging in the crypto economy.
No real value
There are no tools for determining the real value of any existing cryptocurrency, unlike traditional assets where for example shares of companies listed on exchanges are estimated most often by economic indicators such as annual income, profitability, etc.
The Havven project is planning to minimize the effects of volatility of cryptocurrency on its platform. In addition to stabilization goals, the team states that it aims to make crypto transactions more accessible to a wider range of people. This will lead to cryptocurrency becoming a usual means of payment along with the US dollar or Euro, subsequently leading to a significant reduction in speculative operations in the market.
The very concept of stablecoin has existed for several years. We cite Steem Dollar as the very first prototype, which is used on the Steemit decentralized social network. However, this has a limited application, due to the low prevalence of systems based on the Bitshares platform; the DPOS consensus protocol, according to some sources, does not provide sufficient reliability [Coinmis].
Recently, the topic of stablecoin has arisen more often, as the community seeks new mechanisms for stabilizing the crypto system. Currently, the stablecoin market already has projects that offer users more interesting solutions compared to Steem Dollar which are potentially capable of competing with the developed Havven platform.
Nevertheless, in our opinion, an ideal public decentralized platform using stablecoin has not been created so far.
We distinguish the following competitors for the project:
Tether - this platform is built on the basis of Bitcoin, using the Omni Layer protocol. It enables users to trade and make full use of digital tokens pegged to the US dollar. Thus each USDT token in the system corresponds to a reserve of fiat funds.
It should be noted that there was recently a scandal involving the company being robbed to the amount of $31 million due to fraud [The Next Web]. In addition, the independent rating agency Weiss Ratings conducted an examination of this project and revealed that a platform audit was never conducted. According to a report from the same agency, there are serious doubts that every USDT token is really provided with fiat means [Bitcoin.com]. In this regard, the service has obvious problems with distrust.
HelloGold - an infrastructure platform that enables a wide range of people to invest in gold via a mobile application. One of the main advantages of the project is that gold can be bought without opening a bank or brokerage account and the minimum purchase amount is only $0.25. GBT is a platform token, each unit of which is backed by 1 gram of 99.99% gold. This platform is not a payment system but nevertheless the idea of securing GBT tokens with gold uses a similar concept to the Havven project.
Probably the closest analogue for Havven is Maker DAO, a decentralized standalone organization based on Ethereum which aims to minimize price volatility of its own stable DAI token pegged to the US dollar.
The system is built on several basic elements:
The stablecoin DAI is an ERC20 standard token pegged to a fiat currency and thus equivalent to $1. DAI is collateral. To purchase this token, a user applies the collateralized debt position (CDP) mechanism, the main smart contract of the Maker platform.
The investment tool is the MKR token (ERC20). Holders of MKR are in fact, shareholders in DAI. They manage the system and participate in the distribution of profits but they also incur losses if decisions are subsequently unsuccessful. The profit or loss of Maker is distributed among MKR owners via the BuyBack (Buy & Burn) program.
Another key mechanism for the Maker system is the Margin Trading Platform. Each issued DAI is provided by CDP - Collaterized Debt Position, sent to the self-titled smart contract which is also a decentralized platform for margin trading; it provides higher security and lower prices compared to existing margin trading systems.
Nevertheless, according to the founders of Havven, the approach created in the Maker system has a significant disadvantage - creating DAI token will strongly correlate with the expected future price of its provision [Havven Blog]. Thus, demand for DAI will go off scale if its price is high, and users will strive to open CDP. However, with a minimal drop in prices, the community would lack incentive to buy stablecoin DAI. According to Michael Spain, the blockchain engineer for Havven, this factor is likely to become very tangible for the Maker project since with the stablecoin, a low price will prevail during periods of high demand for the token itself.
Currently, the project has 16 participants in its main team and 11 advisors from different areas.
Kain Warwick – Founder/CEO.
In 2014, Kain founded the Blueshyft network, one of Australia's main platforms for making crypto transactions. In addition the platform provides a number of other services, including "over the counter" Bitcoin purchases, deposit management on digital wallets and even logistics solutions. This organization is also a member of the Australian Digital Commerce Association, whose members are companies that are helping develop the national digital economy via blockchain technology. The association includes about 50 companies, including IBM, ING, Johnson & Johnson, etc.
Kain has extensive experience in creating and running businesses, excellent leadership skills, strategic thinking and a curious mind which is often mentioned in recommendations by his colleagues on his LinkedIn page.
He graduated from the University of New South Wales (UNSW, Sydney, Australia), specializing in Genetics.
Justin Moses - CTO.
Justin has more than 25 years of experience in the field of IT, and has worked as CTO on various projects since 2009 with Kain Warwick. He graduated from the University of New South Wales (UNSW, Sydney, Australia), specializing in Computer Science.
Jordan Momtazi - Partnerships Vice President.
Jordan has worked with Kain since April 2017 on the Havven and Blueshyft projects. He is director of the fashion boutique Rebel Muse, an investor in the PetSleepover marketplace service, owner of a bar-restaurant. Has significant work experience in his industry, including strategic partnerships at Paypal and head of partnerships for AU and NZ at Yieldify.
He graduated from Macquarie University (Sydney, Australia), has a B.A. in Philosophy.
Tim Bass - Project Lead.
Tim is the co-founder and CEO of the BLOCK8 project, as well as co-founder and director of the myStake platform. Both companies are engaged in the development of blockchain technology in the financial sector. He has the position of Team Lead at CryptoFlip - a project creating a decentralized platform for betting (their ICO is planned in 4Q 2018 after the creation of the platform). In addition to running several businesses from their founding, Tim has more than 10 years of experience in the field of Solutions Architecture for large companies in Australia.
Has a number of qualifications:
AWS Certified Solutions Architect - Associate
VCP 4.1 - Data Center Virtualization
CCA - XenApp 6.5
MCSE - Windows Server 2008 Solutions Expert
MCITP EA - 70-647 - Windows Server 2008 Enterprise Administrator
MCITP SA - 70-646 - Windows Server 2008 Server Administrator
There is no data on higher education.
Samuel Brooks - Blockchain Lead.
Samuel combines this position in Havven with the position of SRT in the previously mentioned BLOCK8 project. In addition to these projects, he has the role of SRT for the CryptoFlip project. Has more than 10 years of experience in the field of IT.
He graduated from the University of New South Wales (UNSW, Sydney, Australia) specializing in Electrical Engineering.
Lucy Lin - Head of Marketing.
More than 10 years of marketing experience includes, but is not limited to, positions such as Digital Marketing Manager at Qantas and Loyalty and Acquisition Marketing at American Express.
She graduated from the University of Sydney specializing in Marketing and Strategic Management, has a Master of Commerce.
In addition to the project leaders whose experience is reflected above, the team has 10 more specialists:
Anton Jurisevic, Blockchain Engineer
Michael Spain, Blockchain Engineer
Dominic Romanowski, Blockchain Engineer
Matthew Mupfanochiya, Partnerships
Phil Vadala, Network Security Architect
Garth Travers, Project Manager
Charlie Karaboga, Project Manager
Miles Elkington, Project Manager
Zoe Archer, Graphic Designer
Sergey Vassilyev, Full Stack Engineer
Advisors for Havven include 11 professionals from different spheres:
Christian Jaag is Managing Partner at Swiss Economics, member of the board at Liechtensteinische Post AG and lecturer at various universities in Switzerland on the following courses:
Energy Economics at Ecole Politechnique Federal de Lausanne (Lausanne)
Business Plans for Service Companies at the University of Zurich (Zurich)
Introductory Microeconomics at the University of St. Gallen (St. Gallen)
He is the founder and director of Cryptecon, a company that provides consulting and economic research services in the field of blockchain and cryptocurrency. Has a Ph.D.
Antony Nantes - CEO of Direct Money. DirectMoney Limited (ASX: DM1) is a marketplace platform that enables its users to borrow money from each other. The company's shares are quoted on ASX. Has more than 10 years of experience in development and marketing.
Andrew Porter – has worked as Managing Director at WorldFirst for more than 7 years – a platform that provides international transfer of funds, as well as offering a currency exchange service.
Simon Dulhunty - Non Executive Director at TopBetta - a diverse wagering company listed on ASX. Simon has 25 years experience as a media executive in Australia as well as extensive communications in the industry.
Alan Burt - Partner at Beachhead Venture Capital. Alan is a co-founder of BLOCK8 and Non Executive Director at myStake.
In addition to the above, the advisory board includes:
Juan Beccuti - Researcher at Cryptecon.
Walter de Brouwer - CEO at doc.ai, serial entrepreneur.
Peter Reeves - Partner at Gilbert + Tobin.
Kevin O'Hara - Group CIO at Tulla Private Equity.
David Curry - CCO at CoVESTA.
In our opinion the team members have the necessary experience in the field of development and business management, and they are also very competent in the direction of development of blockchain technology. It should be clarified that most of the team is in Australia and one way or another, works together on other projects - Block8, CryptoFlip and Blueshyft. This, of course, is a significant positive moment for the implementation of the Havven system.
In our opinion, some of the advisors can also really make use of applied experience in their fields, thereby adding value to the project being developed.
Havven assumes the launch of two tokens at once: Havven tokens sold during the ICO, and Nomin tokens to be issued after the ICO whose value will be pegged to fiat rates (at the moment it is planned that 1 Nomin will be equivalent to $1).
The rate for Nomin tokens will be regulated by the system through the stimulation of either the release of new tokens (with an increase in token demand to meet demand and prevent rate growth above the value of 1 Nomin = $1) or reverse buy-back and the burning of tokens to reduce the volume of available tokens and to push the growth rate to the value of 1 Nomin = $1.
In this case stimulation means the payment of rewards to holders for actions (additional emission/ buyback and burning of tokens) necessary to maintain a stable rate for Nomin tokens. With reduced demand, the system will reward Havven tokens holders for buyback and further burning of Nomin tokens.
Holders of Nomin tokens will be able to use them as a means of payment within the ecosystem. Holders of Havven tokens can issue Nomin tokens but only within specified limits, so that the released Nomin tokens do not exceed the price of collateral tokens. When issuing Nomin tokens, a certain portion of Havven tokens will be stored in escrow and provide their value.
The main revenue for the project will be from commissions for operations conducted on the system using Nomin tokens. Consequently, the more users begin to conduct payments on the platform, the greater the revenue for the project. Currently, size of the commission is not defined but it is planned that the commission will be insignificant, and it should not deter potential users.
As part of the mechanism for stabilizing the exchange rate of Nomin tokens, the system will bear the cost of paying rewards to stimulate users. Obviously, for the financial success of the platform, it is necessary that proceeds from commissions exceed the costs for stimulating users. Otherwise, at some point the system will not be able to stimulate users which will lead to destabilization of the course and, potentially, to a decrease in interest in the platform.
Although the idea of stablecoin seems very attractive and it could attract a significant number of users, it should be pointed out that it is impossible to guarantee a stable rate for tokens in certain negative scenarios. Since the number of Havven tokens is limited, their value will be determined, first of all, by demand from investors. It is logical to assume that given growth of the project’s audience and the number of transactions, as well as a sufficient level of reward for actions within the system, system tokens will become more in demand and their rate will grow accordingly. It is important to understand that the rate will be sensitive to how the Nomin token stabilization mechanism operates technically. If there is a significant deviation of the Nomin rate from the set price of $1 and inability of the system to return the rate to a state of equilibrium, a panic may occur that will cause a collapse in the price of tokens.
It should be clarified that the project provides a foundation (12% of all issued tokens) through which the system will still be able to stabilize the rate under extreme conditions. However, it is obvious that it is impossible to predict how often such situations will potentially occur.
The white paper does not contain information on the business plan and does not disclose the quantity of transactions necessary for the normal functioning of the system or break-even point. It is also important to note that the MVP will be available within a week of the completion of the ICO and some functionality will still be unavailable at this stage. For example, the issue of Nomin tokens will be initially implemented only by the project itself (this feature will be unavailable to holders of Havven tokens), but all Havven holders will receive commission in Nomin tokens for payments made by other users inside the system. However, the commission amount has not yet been disclosed.
In the short term, the founders are planning to determine optimal settings for the system over the launch period and the first release (including amount of commission for payments, user rewards, etc.) in order to proceed with implementation of full platform functionality.
The founders indicate that negotiations with various exchanges where the sale of platform tokens would be possible are under way, but which ones are not disclosed. There is also no information on strategic partnerships or the company's plans to promote the system in the community.
The concept of the Havven project seems to us to be one of the most developed and promising in comparison with competitors. However, it should be recognized that this platform is also potentially vulnerable to a number of risks, the key one being a liquidity risk that could destabilize the system.
In the case of a sharp fall in the crypto market, it is likely that the capitalization of collateral tokens for Havven will also decrease, as a result of which the system will provoke a reduction in emission of stablecoins, while demand for them will increase. Based on the documentation, the platform assumes a fund capable of stabilizing the ecosystem in a critical situation. Nevertheless, in our opinion, the crypto market’s volatility may be completely unpredictable.
In addition, the project could provoke claims from regulators in connection the mechanism for commissions for Havven owners from operations with stablecoin. Such an algorithm, in our opinion, is very similar to the receipt of interest for deposits. However, the founders have stated that their legal advisors from Australia and Singapore believe that payments of commissions are more reminiscent of the Proof of Stake reward system, so they argue that Havven tokens should not be classified as securities.
The information contained in the document is for informational purposes only. ICORating received monetary compensation from the entity rated in this report for completing the ratings report. However, the entity rated in this report did not have the opportunity to approve this rating report before the report was published, nor did the rated entity have the opportunity to edit or remove this report once it was published.
The views expressed in this document are solely those of the ICORating Team, based on data obtained from open access and information that developers provided to the team through Skype, email or other means of communication.
Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud. We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.