Imposing Price Stability
Estimated time to read: 6 minutes
The price volatility inherent to cryptocurrency and the blockchain startup space is one of the core defining features of the digital economy. This volatility has been essential in popularising cryptoassets to traders, many of whom can make a living by capitalising and profiting from correct price predictions. However, and with bitter irony, many can recognise that cryptocurrency is a notoriously ineffective form of currency, largely owed to the rampant price fluctuations that make any exchange for goods and services impractical at best, and financially irresponsible at worst. Cryptocurrencies and blockchain start-ups rise and fall with every passing year, but few projects consider solving the most obvious limitation of cryptocurrency: spending it. Havven strives to correct this flaw.
Havven is an Australian-based startup that, in simplest terms, will allow users to transact with a stable cryptocurrency. To date, their initial coin offering (advised by reputable technology law firm Gilbert + Tobin) has been the most successful in the already-competitive Australian blockchain startup space, raising $30 million US and selling out in just 90 minutes. Already advanced in their roadmap and backed by a qualified team, the Havven project appears poised to capitalise upon the crypto space’s greatest shortcoming by imposing market stability.
While cryptocurrency may well be the future of money, price fluctuations make it an impractical form of day-to-day currency. Havven’s solution is for users to transact through their dual token mechanism, being Havven and Nomins, on a network which guarantees stability of price and rewards those who maintain the stability.
Key to navigating the Havven platform is understanding the distinctions within the dual token system:
The Nomins token is the stablecoin intended for transacting, measured in US dollars, with a soft peg at $1 US. Nomins maintains this stable price by way of the issuance mechanism and the fact it is back by the value of the Havven collateral token.
Having a static supply and fluctuating price, it is the Havven token which is used to calculate the market capitalisation of the project. The Havven token is a cryptoasset which derives values from the small fees attached idle balances as well as each network transaction. However, in order to receive portions these fees and to be issued Nomins, users of the network must escrow a greater value of Havven tokens. Overall, the system rewards Havven ‘holders’ for providing collateral and maintaining the integrity of the system.
As of late August, users can comfortably exchange currency between Havven, Nomins, and Ethereum through the Swappr program.
Altogether, these mechanisms promote an organic network where users can transact with surety in the sum of their finances while those who lock away their Havven tokens are rewarded in growing proportion to their contribution. This leads to a ‘virtuous cycle’, where increased transacting volume within the platform elevates the price of the Havven token, which therein leads to the issuance of further Nomins tokens to be transacted. As such, if the Havven platform can start making substantial ground, then a rapid escalation in volume and price is likely to follow. The Whitepaper abstract articulates this best:
...the resulting system retains the best features of Bitcoin, while the introduction of price stability results in a superior form of money.
The Havven project has a future in problem solving for a variety of industries, and examples provided by the Havven team include wagering and facilitating initial coin offerings. The possibility of minimising price volatility throughout initial coin offerings is a timely example, if not painfully ironic. One of the major liabilities faced by blockchain startups is that crypto capital raised throughout these periods might sharply drop in price throughout the days following the event and therein represent an undesirable discrepancy between the value contributed by investors and the value retained by the business. Considering Havven’s initial coin offering was conducted in Q1 2018, this is likely a sting they are all too familiar with, and as are such doubly motivated to address this market flaw.
Altogether, the dual token mechanism represents a clever and seemingly effective attempt to create an organic system and enact a ‘virtuous cycle’ which provides utility to those transacting on the platform and rewarding those who apply their Havven tokens as collateral for the system. While much of this is dependent on the wheels turning and volume increasing in the next few months, the premises outlined by the Havven crew is nothing short of impressive.
Our rating: ★★★★★
Havven’s choice to facilitate their platform with ERC-20 tokens was a natural fit given the ease of scalability and the smart contract functionality permitted by the Ethereum blockchain. As such, smart contracts operate the dual token and escrow mechanisms outlined above. It is worth noting that the Havven network was released as an open source protocol which might allow for other exchanges and decentralised platforms to integrate and more easily collaborate with the project in future. Further, and by the end of the year, the Haven network will be operating in parallel on the EOSIO blockchain to better facilitate large transactions.
Overall, the tech underpinning the Havven project appears more than sound to achieve what is ultimately a simple (but by no means easy) goal of minimising price volatility. The added novelty of joining the EOSIO blockchain is encouraging for the longevity of the project, particularly where the crypto space is in a constant state of evolution and there is regular speculation as to what programs might replace Ethereum in future. In this case, Havven are hedging their bets and making sure they are prepared for whatever is to come.
Our rating: ★★★★☆
The Havven teams’ previous experience and history of innovative ambition should instil confidence in their capacity to deliver a scalable stablecoin. Despite their impressive advisory board and the fact that their initial coin offering was conducted under the guidance of one of Australia’s elite technology law firms, the most encouraging aspect of the project's support network are the core team members.
Prior to launching Havven, Kain Warwick co-founded the largest cryptocurrency gateway and payment platform in Australia, blueshyft, which boasts tens of millions in transaction volume. Other impressive claims include CTO Justin Moses currently holding a position as the Director of Engineering at MongoDB, an open-source cross-platform document-oriented database program, while Blockchain Lead Samuel Brooks has already tucked under his proverbial belt years of experience on blockchain committees and positions as CTO across a variety of blockchain projects, and on top of this claimed a winning spot in the 2017 Consensus Hackathon. If there were any point to criticise the team on, it certainly is not exposure to and previous success in scaling blockchain solutions.
Altogether, the collective experience and talent pool of the Havven team screams excellence. Even within Australia, a blockchain startup market which is renowned for a variety of successful and scalable projects, the team backing the Havven project have successfully distinguished themselves from the competition.
Our rating: ★★★★☆
Havven has all the markers of a successful blockchain startup. Holding the title of Australia’s most successful initial coin offering and backed by a team who are more than familiar with scaling cryptocurrency projects, the stablecoin solution might just be the future of cryptocurrency transacting in the years to come. While success is undoubtedly dependent on encouraging a regular user-base to escrow their funds and uphold the stability of the platform, once this milestone is met, Havven should have every chance of leaving its mark by stabilising the crypto space.