This is my first article for Steemit. I am writing this as a thought experiment / educational experiment and I am NOT a Venture Capitalist. I have been a trader at various “blue chip” Hedge Funds for over 20 years and I have an MBA, a 3rd of Master’s in Computer Science – quit twice because crypto projects got in the way, since 2013. I feel comfortable about writing this article as a logic experiment.
IS $DOT$CEFS a Venture Capitalist play for a 1500 to 4300%+ ROI? Under generous assumptions and lots of pointers for change, it seems obvious the value of $DOT is much, much, higher and needs unlocking either by a “name” in Venture Capital land or by the current Founders.
********Full disclosure, I personally own $DOT$CEFS cryptocurrencies, but I am NOT affiliated with Cryptopia Exchange in any manner, nor do I know anyone who works there, all my information is off the internet, and I do not, nor am I affiliated with any Venture Capitalist firm's or Hedge Funds. I am also not a financial adviser and I am not touting the coin/token, I just think it's an obvious market mis-pricing assuming my fantastical assumptions and publicly available information analysis is correct. What I am about to outline is, to me, is the most obvious trade I have ever seen since George Steinbrenner buying the Yankees from CBS. If an innovative, well bankrolled, Venture Capitalist, already involved in crypto (like - Winklevii, Fred Wilson, Cuban, Marc Andreseen, or Richard Branson, were to do what I am going to suggest and pay with BTC, one would make history – twice!).
$DOT$CEFS, Cryptopia Exchange? Not going to go on and on here. 😊
$DOT$CEFS came to my attention because of Cryptopia Exchange's communication through the letter below. Cryptopia is a crypto-currency-only exchange, Just like Binance and KuCoin, but you don’t get the rebates. $DOT, does have a quasi-referral reward, of every user referral code, the referrer gets 10 $DOT – whoopy (sarcasm). The potential is at Cryptopia’s finger tips to turn on rebates/rewards through this existing pathetic reward schematic they have now. Sorry, truth hurts. In short, $DOT is Cryptopia’s coin. It is used for new ICO’s or coins/tokens to buy and pay Cryptopia
They have some other things, like a craigslist market, and Paytopia, I didn’t even look into them, immediately confused and I was turned off. My assumption is a Venture Capitalist or raider, would divest these “other” things Cryptopia is trying to make work, immediately. Hey management, those other units you are fiddling with, blow them out and shut them. In my opinion it is the right thing to do, like Uncle Mick says, change is often good, if you know what you are doing!
The tone of this article will be very opinionated, too bad I am not a VC raider or I would actually do what I am about to outline. If a VC would actually do what I am suggesting, a deal, like this, in crypto-land, would be a first of its kind. If they paid in BTC\ETH\XRP, etc. that would be another first in cryupto.
I got to thinking and doing a little math about $DOT$CEFS and why they maybe trading on the floor versus other DEX’s and CEX’s. I know, due to experience, how an exchange’s revenue’s flow, and it appears that massive value is “trapped” in $DOT$CEFS, if no action to make my adjustments. The possible ROI, even if I am HALF correct is over 500%. In a word, berserk!!! (if I am correct).
I have been using Cryptopia for over 2 years now, before it was found by the masses, and I have never had a failure of functioning. It’s been a solid experience, similar to some others I use. Assuming the product keeps delivering, and the product starts to prove reliable, this is an incredible value. The growth rates on $DOT market volumes of crypto trading, comparatively, to existing coins, are the most inviting scenario I have seen in 5 years trading crypto and I have researched over 200 coins. There are De-Centralized exchanges that have all been flying higher in the current cryptocurrency markets, but what is REALLY stealing the show, is the centralized crypto exchanges - $KCS, $BNB, $COSS and Coinbase - KCS, BNB, Coinbase all valued over $2BLN right now! See my analysis on $DOT and please point out where I could be wrong.
Just a few weeks ago Cryptopia Exchange's management wrote a letter here:
https://www.cryptopia.co.nz/News dated 1/6/18
1.5 Million users! Seems a lot, let’s check some data:
A) what is a cryptocurrency exchange with 1.5 million users worth? What is Mr. Market paying for something similar?
Coinbase was valued at $1.6B in August of 2017 according to this article here: https://techcrunch.com/2017/08/10/coinbase-raises-100m-at-a-1-6b-valuation-amid-explosive-growth/ As of Nov, 2017 CB had 11.9M users - $133 a user. CB also are ex-Goldman Sachs guys, first mover in U.S., and advertised well, so a premium is obviously in place, or is it? No there is not a premium (see below – Market Cap per User Value). Coinbase at $1.6 vs. where BNB/KCS is trading has CB undervalued. Hey look, market is out of control, but these are the going rates. See BNB/KCS.
$DOT/$CEFT or Cryptopia, on a Coinbase metric of $133 value a user, is valued either at a low side of $2.86 or a high side of $52 – like RIGHT NOW, today, as fast as a few changes can be made…this excites me. But let’s get more data.$BNB / Binance, an exchange that has come out of nowhere, completely online, tremendous marketing and product, and I see it started in mid-2017 and as of December, 2017 had 5M users with volume of $BNB has rewards/discounts and exclusive releases of new coins, etc. $BNB trades at $20.50 and has 100M coins outstanding, with a total supply of approximately 200M coins in total. I will value it on the 100M coins currently out there and puts BNB value at $2B. This is $400 per user. $BNB also ONLY trades at Binance, while also used as a base currency on the site for other crypto’s.
$KCS / KuCoin – same metrics as Binance. Rewards/discounts, came out of nowhere 2017, and has over 1.5M users. It also has a coin that trades ONLY on KuCoin while also used as a base currency on that exchange. The current price is $14.50 with a market cap of $1.3B (90M coins out / 181M supply). There is FUD out there on South Korea exchanges and KuCoin is located in South Korea
$DOT$CEFS valued, in terms of other centralized exchanges (CEX). Value Per User, Mr. Market is paying per Current Market Cap
B) What is the volume value, in USD, of an exchange like this and it’s comparative value versus other rebate type exchanges? Again, guess-timates.
OTHER INFORMATION and ASSUMPTIONS/SPECULATIVE LOGIC:
Where the F did this $DOT coin name come from or what is the connection to Kim DotCom?
Does it appear that Cryptopia needs capital/funding? Yes, they mentioned it in their letter, specifically. Cryptopia also reveals in their letter that “we took on an investor”, while not naming that investor(s) specifically. That brings me to, who could the investor be? Kim Dot Com? My guess, this is a guess, he very may well be. This is a positive in my opinion. I am biased though, because I own $DOT/$CELF.
You can learn about Kim Dotcom in on Wikipedia, like him or hate him, he is definitely a smart technologist, a tech wizard, actually. Kim Dotcom has big ideas, and conviction on those ideas, whether you agree with him or not. He is also great at marketing too. The big giveaway is, he is a big name in New Zealand, where he resides, that is why I am guessing he may be the investor for Cryptopia – because I do not understand how Cryptopia’s coin is Kim Dotcom’s “DOT” coin. Or is it? I was NOT able to determine, sufficiently for myself. I did read on the website from a flimsy source that it is because Kim DotCom’s project with some Canadian company dissolved suddenly.
I have ZERO concrete information on any of this speculation as to how Cryptopia is related to $DOT Coin or even if $DOT is, in fact, Mr KimDotCom’s coin. Either way – it doesn’t matter because they need to turn on rebates/rewards, to users to even worry about any of the genesis of the coin. We know this definitely though - $DOT \ $CEFS is definitely Cryptopia’s coin.
Kim Dot Com Wiki : https://en.wikipedia.org/wiki/Kim_Dotcom
Kim Dot Com documentary:
What the F is $CEFS?
$CEFS is actually Cryptopia’s “reward coin”. The holders have no rights, from what I understand. It pays a 5% dividend to the holders of $CEFS, but essentially only if management feels like it. $CEFS is ownership of actually nothing, but a promise, from what I have read. Now for the big WTF – there are only 6,400 coins of $CEFS outstanding and it trades $6,900 last I saw today Jan 14, 2018. That’s correct.
What can a VC do with $CEFS. Assuming a raider or management came in, they would/should take in the $CEFS coins from the holders (they have no legal rights from what I can gather, anyway). Inform the holders of $CEFS that they will get $DOT in an even money amount for what they hold in $CEFS on such and such a day. Also, tell the $CEFS holders and the $DOT holders (public) at the same time, “our roadmap of changes are, blah blah” ---- see my suggestions.
Few more Positives to analysis:
$DOT has switched chains to $UBQ blockchain tech. Read up on it. I can’t do all the work. $UBQ is a solid chain, in my opinion
Splitting LTC pairs to its own website, but can be atomic swapped in the background (unknown to user), in between their BTC pairs site, is pretty quick work for something complicated. Could they have another site that is in $DOT pairs? Not sure, but we hope so.
FINAL ANALYSIS……IMHO…..with the below changes…..$DOT coin is worth $0.70c or $2.86 / a +1300% or +4400% ROI….immediately and probably worth many multiples higher!!! If my estimates are too low…..could rocket well above the high side of my suggestions to a - "Welcome to crypto, bro!" type price. lol
Advice to Management of Cryptopia$DOT Coin to unlock massive capital you don’t have, instantaneously:
TRIM THE FAT: Focus specifically on exchange and shut Paytopia, et al. (maybe you have by now – don’t know) No offense, I don’t even know what Paytopia + Marketplace is, at all, neither do I care. They are bullshit distractions. Sorry, I am blunt and I don’t “do” feelings. I “do” capitalism. The real juice of this operation is the exchange. You have enough to do with the exchange to be bothering to be fiddling with anything else. This is an easy fix, “let go” of these pet projects, they should be shut. Re-assign that human capital elsewhere inside the exchange. As Mr Wonderful of Shark Tank says, “anything that doesn’t make money is a hobby”. I do not see your market place (craigslist type) being profitable versus the opportunity cost in hours of the exchange revenues, right this moment, use your head, shutter weak revenue streams. Personally, I also try to avoid investing in any public stock company’s or crypto’s that promise too many things, unless you have proven to do so. Focus like a laser on the exchange (one thing) – the revenues there are growing at rates all entrepreneurs would love.
TOTAL RE-BRAND, FFS CHANGE THE COIN NAME: Keep the name Cryptopia for a business name, change name of coin from $DOT to something like “TOPIA” or whatever, just please do NOT call it $CRY (that’s a bad omen). Change the colors. Re-do your website, you can make it easy on the eyes, color wise. Spruce it up a bit, leave product, product is fine. Just keep on pace improving the project, evolve or die.
HIRE A MARKETING MANAGER: follow what DASH did in terms of their marketing or what BNB/KCS does. Do not re-invent the wheel here, just keep delivering on product. Go with trust appeal, as best you can. This is people’s money…..use a look that says “trust”. No red, no purple, keep black, grey, silver. Maybe extenuate that silver. If you are using grey, it’s horrible. Your audience is 90% young men with crypto money, pick a marketing plan that speaks to them. Don’t get the wrong idea and overdue it with the sex appeal or “cheesy” type spokesperson. Again, people’s money is what you are responsible for. Not yahoo shenanigans. Not saying you do that now. Just guidance. Incentivize your marketing head and the face of the product with $DOT. Look up the old computer laptop commercials, when you get to that stage for youtube commercials, lift those ideas from the personal computer ads, DELL, CPQ, etc. They had like “spokesman”.
SUPPORT: Focus here – YOU HAVE A REPUTATION TO IMPROVE HERE. There are lots of complaints and user frustration experiences and in some cases utter horror user experience descriptions on reddit and crypto information friendly sites. YOU NEED TO COMPETE HERE. Maybe it is a competitive tactic to post FUD about Cryptopia, I say None of my personal exchange support experiences have been positive. (maybe KuCoin). Across the board for crypto-exchanges, one could read for days. This leads me to believe that none of these exchanges are competing here, if you compete and dominate, have the best support to your exchange, more users will flock to you. The user support, in the whole crypto space, is pathetic. This one is obvious.
By doing what I am suggesting, especially rebates/discounts/heavy marketing – the value of your $DOT/$CEFS coin will increase, handsomely.
We know, we know, you are “swamped”. Crypto don't care - homey! "This is chess it ain't checkers" - Denzel Washington's character in "Training Day".
Here is some motivation: think to a time when you or your employees were ever out of a job, and then think, I am blessed to be swamped, and get to work, stop crying 😊 That is said in a nice way……enjoy your success…
Now said in a realistic way, like a football coach,………your competitors are kicking your ass! You have 1.5M users and daily revenues of about $1M a day – Yet, the value of your coin is for shit. Let’s do better!!!!!
There can only be 2 scenario’s for your coins low price - a) you are in over your head (so far, from what I see, you are NOT, THAT, in over your head, you seem to get it, communicating to your user’s is KEY for that “trust” appearance, keep it coming)
OR b) you cant keep up with the growth curve (more likely):
If the case is “a” – get attention from a couple of serious VC’s and get ready to sell and get out of the way. 😊 Your current market cap is about $25M for $DOT and $CEFS of $44MLN…….so with about $70mln, slap the ole crypto premium of 3X on it, $210MLN spent. A VC will put a about another $50MLN….so a VC, and I am pushing it, would pay $275M, let’s say, gigantic high side, he could probably snag you and for $100M. Then the VC would get ready for $1BLN value in 30 days, probably.
If the case is “b” - you know what you are doing, motivated, excited, but you are overwhelmed and don’t see a way out. Either way, I know this, businesses that grow at your rate, need capital or they collapse under their own success. There is an obvious move here to get liquid capital and you are staring at it.
The environment right now, will allow you or your investor(s) to liquidate some $DOT as it rises, should you do what I have suggested. There are 2 wallets of $DOT that own 65% of all coins (130M coins of 200M out) – not that I know who owns them – but someone directly connected to your company can help you with unlocking that value for them – you help yourselves or your investor and they help you - That’s how it works! Unless you got in bed with the wrong investor, but if you got in bed with Kim DotCom, that’s probably the right investor, in my opinion, anyway, he probably has loads of solid advice.
How can your coin be this low? Assuming that nothing of what can be found out about Cryptopia publically, is fraudulent, and I have no reason to believe it is and I believe the Cryptopia's management's communications to be totally accurate. If Cryptopia Exchange wants immediate capital and to run with your competitors, you are going to need to unlock hat - C A P I T A L! It is right in front of your face! Thank me, later, Cryptopia.
Good luck.
If you found this article useful and want to tip me for my time in preparing this analysis, I would be grateful, thanks in advance:
$ETH Address: 0xba656BEB6d1f43762E0FAeaEA0f12EfE3004fbf7