LocalCoinSwap partners up with HavvenValeri Natanelov (PhD) - CMO LocalCoinSwap
LocalCoinSwap shall adopt Havven's stable coin (NOMIN) as a price risk management tool. Specifically, the community venture fund of LocalCoinSwap, containing 10 million CryptoShares (LCS), as any other LCS holder, shall receive quarterly dividends resulting in a growing fund to be spent at discretion of our community. Considering the high volatility nature of cryptocurrencies, Havven's stable coin shall provide a valuable price risk management tool to optimize the value for LCS investors and community at large.
Volatility = Risk
However, one practical issue persists and that is price volatility. From investor perspective, volatility in cryptocurrencies markets are normal and often present opportunities. However, from operational perspective - simply put spending cryptocurrencies for goods and services - is another story.
The LocalCoinSwap team and community encountered this first hand during the ICO with extreme ethereum volatility resulting in the question of how to approach the situation.
LocalCoinSwap is a P2P cryptocurrency exchange, featuring a completely decentralized peer-to-peer trading structure. There are no centralized bank accounts, no verification requirements, and no restrictions on trade. Furthermore, LocalCoinSwap distributes 100% of the sites profits to holders of Cryptoshares on a 1-to-1 basis, through a blockchain-based decentralized dividend application. Cryptoshare holders can even vote on important decisions in the running of the exchange.
So an early first community vote was held.
One of the most exciting developments for LocalCoinSwap has been the implementation of the first community vote amongst LCS Cryptoshare holders. On Friday April 6, the first community vote was announced with the aim of deciding whether to change the pricing of LCS Cryptoshares from 0.0004 ETH to 40c USD. Using our developed voting system with Smart Contract technology, we were able to quickly and seamlessly secure the vote of the community on this issue.
While pegging LCS price to usd resolved the issue at hand, looking towards future it became clear that a more flexible solution was required for dealing with price risk - We Need a Decentralised Stablecoin. Enter Havven.
Price Risk Management
Havven is a decentralised payment network and stablecoin. It offers all the benefits of cryptocurrency with the addition of stability, which is a fundamental quality for anybody accustomed to using a centralised fiat currency. It employs a dual token solution to price volatility, which consists of a stablecoin and the collateral token that backs it.
In the Havven model, the stablecoins (nomins) are overcollateralised by the collateral tokens (havvens), creating a distributed payment network. Their model is decentralised and scalable, and offers a crucial solution to price volatility, which is a major problem in the cryptocurrency ecosystem.
For LocalCoinSwap such a trifecta provides great value that goes beyond operational requirements. Not only is LocalCoinSwap a community and investor led project, where LCS holders receive 100% of the profits, it also has an allocated community fund of 10% LCS tokens which, as any other LCS holder, shall receive quarterly dividends. This Community Venture Fund containing 10 million CryptoShares (LCS) shall continuously grow by receiving quarterly cryptocurrency dividends and can be spent at discretion of our community. Simply put, the community can vote/decided to invest a part of the funds into ventures, ICO's, mining rigs, or whatever the creative community comes up with and decides to invest in. From an operational perspective, this fund shall consist of Monero - Ripple - EOS - Tronix - Tether - VeChain - Binance - PowerLedger - Decision Token - Golem - Walton - ETH - BTC - LTC - DASH - BCH - ETC and other coins and tokens which will be trade-able in the future. While for an investor such a growing portfolio is quasi magical, for a community venture fund it presents certain challenges.
For these reasons, LocalCoinSwap has embraced Havven's stablecoin (nomins) as a price risk management tool. Specifically, at opportunistic times (i.e. market price of certain cryptocurrencies or all cryptocurrencies is relatively high), cryptocurrencies from the fund will be sold for havven tokens in order to issue nomins. This is achieved by locking havvens in a smart contract, which ensures that the nomins are fully collateralised at all times. At the same time, the LocalCoinSwap investor community can benefit from locking up a high value for something stable without leaving the cryptocurrency ecosystem. The elegance of the Havven model is that both tokens are cryptoassets on the blockchain, which promises all the secure and transparent benefits of cryptocurrency!