Token Tuesday: Ravencoin is Becoming the Amazon of Token Issuance
Happy Token Tuesday! If you have been following the cryptocurrency and blockchain world, you have likely heard about Ravencoin, a peer-to-peer blockchain that assists in the transfer of digital assets. While you may have heard the name, or engaged with their huge fanbase on Twitter once or twice, I want to take an objective view of the technology, the viability of the firm’s business model, and consider the investment opportunity in the blockchain’s native token, $RVN.
Ravencoin has gained immense momentum in the cryptocurrency stratosphere over the past several months, as bulls see their technology as a next-generation platform. On January 3, 2018, the Ravencoin protocol was born thanks to businessman Bruce Fenton and developer Tron Black. The protocol was designed to facilitate the creation and transfer of tokens representing real-world assets such as securities, collectibles, gold, event tickets, or even airline miles. Ravencoin was launched as an open-source fork of Bitcoin’s codebase, meaning the developers copied and amended Bitcoin’s code to provide additional features targeting different goals. Not only can users issue personalized tokens on its network, but other changes include block times of one minute, as opposed to roughly 10 minutes for Bitcoin. Furthermore, a block reward of 5,000 $RVN and a max supply of 21 billion $RVN were other notable changes in the fork.
Ravencoin uses the same consensus mechanism as Bitcoin’s Proof of Work (PoW) to secure its network. Unlike Bitcoin, which requires mining through specialized hardware, anyone desiring to mine $RVN can do so with their own CPU. Ravencoin aims to reduce the barrier of entry to mine on its network by using its own PoW consensus mechanism called KAWPOW.
To create a new crypto asset, they must burn a certain amount of $RVN coins and provide a unique name for their token. Once created, special characteristics can be defined for their new asset, such as the number of tokens issued and fungibility.
Representing a shift from traditional chains to a security token-centric approach, Ravencoin provides a compliant enterprise-grade security token issuance solution for firms seeking more out of their blockchain. Designed for use by corporate clients, the Ravencoin developers entered the market with one goal: solve the challenges that arise from using today’s token issuance platforms. With a few key features, Ravencoin aims to solve many of these problems the developers were facing.
As seen with all token issuance platforms, smart contracts enable issuers to build compliance features into the protocol of the tokens. For any actions to occur, these characteristics must be met by the token holder. Ravencoin developers made it possible that issuers can create code that changes with time, making it possible for requirements to be removed after a specific time period passes. A use case for this feature is when issuers remove an “accredited investor only” requirement after a certain amount of time or after public registration. This also enables multiple investment rounds to occur seamlessly.
Ravencoin also provides KYC services to any issuers through its integration with Inclusive. KYC/AML/OFAC capabilities that are not easily matched by other blockchain solutions. Being a compliance-focused blockchain, Ravencoin has enabled a feature that allows issuers to freeze any assets of a potentially ill-mannered token holder. This feature was set forth due to Rule 144, which permits unregistered public resale of restricted and controlled securities within certain limits.
Being an all-inclusive platform, Ravencoin has tried to make it as easy as possible for issuers to manage their token. Included in this is an automated dividend payout system. With a large variety of payment features available, including royalty streams, profit sharing, or even contractually obligated payments, businesses of all shapes and sizes are equipped with many tools to suit their needs.
Ravencoin has also enabled a messaging feature, enabling token creators to reach out to holders of their assets when they need to vote on new proposals.
While what Ravencoin offers sounds extremely promising, companies in this field cannot succeed without the necessary funding to push their projects forward. Fortunately, at the time of launch in 2018, the core team was funded by the Overstock.com subsidiary Medici Ventures. Fast forward to today, and the Ravencoin platform has partnered with many names across a vast array of sectors. These range from KYC partnerships to OpenDAO for a $RVN-backed stablecoin.
A quick look at the features provided by Ravencoin makes it clear that developers did not cut any corners in the pursuit of a revolutionary product being brought to market. It is a technologically sound product, and there seems to be no sign of any slowing down on the development side. With all of this being said, how does $RVN look technically?
$RVN has traded from a technical standpoint exceptionally well. Its rapid descent from April into July was due to the weakness of the cryptocurrency market as a whole, with lots of question marks surrounding the industry. As the bull market has begun to heat up, we can see a textbook rounded bottom that gave traders an explosive day one move over the descending trendline on August 6, 2021. The following two days provided price discovery in the $.09 range before the mini flag broke out into a three-day explosive move. For short-term traders, after three high-volume moves to the upside, it is usually a good time to take some profit and wait for more consolidation or a dip to buy more.
Over the past week, we see several candles holding within the range of the day three move, showing trading accepting prices in the $.14+ range. One can draw a descending trendline from the wicks of the day three move through the wicks of the following days to see the level that bulls to get above and stay above for another move to the upside. All in all, a short-term trade vs. the lows of August 18 can provide nearly a 3:1 r/r for a move back over these short-term highs into the next resistance.
Looking at the chart from a more macro perspective, we can see that $RVN has been building a possible cup-and-handle from May-present. While patterns can always fail, if this C&H plays out technically, a move can be measured to bring $RVN to the $.26+ range. Given that the summer months have played host to bull runs in the crypto market before, this seems like an opportune time for $RVN to push back towards all-time highs. One must be aware of the risks involved with cryptocurrencies, as the extreme volatility can whipsaw price action. We have been fortunate to see extremely technical moves play out in the industry over the past several months, but please do not forget sell rules, especially in high volatility times such as this.
Ravencoin is providing potentially world-changing technology to the blockchain world. If widespread adoption is successful, we may look back and see them as the host to thousands of companies’ tokens, similar to how Amazon provides the platform for countless stores to market their products. Are we looking at one of the better investments of the decade? Time will tell.
Thank you for reading this edition of Token Tuesday! If you have any questions or feedback, please reach out to [email protected]
See you next week! 👋
Written and published by Samuel J. Sachs. Follow me on Twitter.
Everything in this report is for informational purposes. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.