ICO Analysis: NVO
Decentralized exchanges have long been thought of as a solution to the problem of centralized exchanges getting hacked, people losing funds, bad actors stealing funds, and the like. In NVO we find one more solution to that end, one of many, and this must be noted up front or else you might be confused when you see multiple other decentralized exchanges in the wild. There will be many such exchanges. There will be some just dedicated to trading a certain asset into others. Eventually, a platform will arise that will act as a hub to inter-network all of them, making it possible to trade anything anywhere without having any centralized point of failure.
That there is relatively little novelty in the basic concept of NVO is not a drawback. The model will definitely succeed, if not here then elsewhere, as it always does over the centralized alternatives. Things that are decentralized, like the Internet or torrents or The Onion Router, are hard to defeat because they are incredibly resilient. Thus, if NVO gets off the ground at all, it will probably proceed at some pace regardless of any problems that may arise for them.
The second component is a validator hosted on the Safenetwork. Users will connect to the Safenetwork through the wallet to exchange. An application will match the orders issued by the users and check all transactions and order informations are valid. Unlike centralized and semi-centralized exchanges, there isn’t a wallet acting as a relay. Transactions are processed simultaneously through an order matching engine from one wallet to another. The validator on the Safenetwork will check if the transactions are valid prior to being exchanged. The orders are then matched and transactions broadcasted in their respective networks. The validator process raw transactions and doesn’t hold any private keys or assets nor can it sign transactions resulting in a trustless decentralized exchange using the Safenetwork to validate orders.
This is what makes NVO unique, and whether or not it is a major plus is really up to you. The Safenetwork is a secure network which is underpinned by a token called Safecoin. While the whitepaper thoroughly outlines how the decentralized transactions will take place, and how they will be validated using the Safenetwork, the important thing is whether or not the thing is worth investing in. The token will be called NVOT (NVO Token) and will apparently have a fixed price. This doesn’t, of course, make it untradeable via other exchanges, which could give it varying prices and some volatility regardless of any efforts.
The interesting and important part is that token holders will receive a portion of the exchange’s earnings weekly. This means that the value of the token is in the value of the exchange’s turnover. So long as the exchange is making decent money, the token is valuable because it gives the holder access to profits without any extra effort. That’s an important feature of NVO, and a definite boost to its safety score – it does, however, require us to investigate the viability of the exchange.
NVO – Viability Assessment
The overall safety of this investment is entirely dependent on the potential of the exchange to actually make money. A decentralized exchange encourages people to do trades amongst each other, after all, and this begs the question of what will happen in practice. How long will most actually go through the exchange before figuring out a way to get around the exchange and pay no fees at all? The exchange will already try to have fees so low that they are basically unnoticeable, but some will still even want to get rid of those when trading. This all, of course, raises the question of the possibility that such an exchange could never truly flourish because it wouldn’t need to – the job would be done once parties were connected, then the exchange becomes unnecessary.
Yet, the exchange may flourish. In fact, it has a good likelihood of doing so. People want new ways to trade, and removing centralized points of failure is a good way to attract such people. That is the challenge, after all, however – actually gathering people. Because, beyond the people who hold the tokens which back the system and help it come into existence, there have to be people coming in to use the platform and therefore return profits to those token holders. This number has to be somewhat exponential in order for the token to continue to gain value. This, of course, incentivizes the token holders to tell others about the platform and to use it themselves. Their own usage doesn’t build the value of the token as much, for the most part, but external investment of sizable amounts can raise the price of the token substantially. The price, after all, will be based on the amount of profits that are being returned every week from the exchange.
One thing that is for certain is that people have not been discouraged from trading on centralized exchanges despite the problems that were experienced in the past several years with exit scams, hacks, and so on. Instead, Bitcoin and other cryptocurrency trading has been at all-time-high levels in recent times, and the value of most tokens, assets, and cryptocurrencies has risen in the past several months as a result of renewed interest. ICO has become a buzzword, and more and more people are throwing money into new projects, requiring thorough analysis of their utility. These assets would then be tradable on these decentralized exchanges, and they wouldn’t have to wait for approval from the exchanges. That is, as soon as you have an asset, you’re free to trade it. It can be safely assumed that there will be several types of thriving decentralized exchanges in the near future.
Who is Behind NVO
NVO CEO Ton Bi used to work for Coinpayments.net, which is a payment rail that many altcoins are able to use in order for stores to be able to quickly and easily accept their token. He claims five years total experience in the cryptocurrency space.
Lead developer Yanni Bragui says he has 14 years of software development experience. He has previously worked at Veserus, which is also a cryptocurrency exchange.
Imed Boudali founded Veserus and is the one who will be developing the adapter for the Safenetwork.
We see a lot of experience and talent in the team, and this should lead to at least a quality product which could, hopefully, for the investors at least, lead to a solid return later on. The ICO offering has been ongoing, and only has about ten days left at time of writing. That it it is still running at all is evidence that there is not an overabundance of hype surrounding this particular ICO, as we have seen some fund in minutes no matter their goals.
There are going to be a lot of plays like this one. If it’s really a space you are interested in, then you should probably put a small amount into each play, and hope that one takes off, to pay for those that don’t. This particular one has some nice features, like its eventual ability for fiat integration, and so we’re going to give it a 6.5 out of 10 in terms of interesting/good/probably-profitable investment.
You can currently invest in the NVO exchange by going to NVO.io and registering. The whitepaper mentions a fixed cost of 99 cents USD as a price for each token, and that a total of 15 million tokens will be issued – no more, no less.