Status reached: Production of MVP, raised $0.5M pre-seed, platform had about $0.5M invested into it
When: Q4 2021, for 9 months
Team skillset: Three partners – two with a tech background, and one was a former COO at a fintech startup
Finding a better, more efficient approach for creating a stable coin.
- Stable coins are usually tied to specific currency to create value. We wanted to make the algorithm better as well as extend the possibilities: create a coin for the dollar, but also get into FOREX more broadly, as well as commodities, stocks & bonds.
- The main expected value for users would be working with stable coins that are USD pegged.
- There is a huge issue of trust in this market, there are currently 2 major coins that are tied to the dollar – USDT and USDC – by two different companies. Both have a good reputation, but they could always fall (like Terra, a company that did algorithmic stable coins and then collapsed because of fraud allegations). The idea was to decentralize the whole thing by pegging the stablecoins with ETH and BTC.
Why it didn’t progress
- Bad timing: we launched two weeks before Terra’s fall, which brought the whole crypto market down and negatively impacted anyone doing algorithmic-based coins. If it was a year earlier, we believe the outcome would have been completely different.
- Our decision to launch on the RSK network. We chose the network based on the advice of the angel who came up with the idea and is very involved in the industry – we were very lucky to work with him. The network was problematic because:
- Networks are valued based on how much money they have, which you can look up on sites like Defi llama, and there was not much money on this network.
- The network didn’t have many users.
- The company that runs the network sounded good, but in reality did a terrible job on customer support, infrastructure etc.
- The target audience for this network was people who work with bitcoin. Our angel was a bitcoin guy, which is why he recommended it, but it wasn’t right for us.
- We stopped the project and returned the money to our investors.
- Listen to your gut feeling on key things like the network you’re launching on.
- Do better due diligence on the network, even if your investor, which you appreciate and fully trust, recommends it.
- In Crypto, psychology plays a big part as does the buzz (or rumors) created by the community. As a result, any company that wants to get into the market and gain trust will need to spend a huge amount of time building a community and you need the resources to hire a community manager. We didn’t prepare for that.