Traditionally, financial institutions and high-profile investors have reserved access to investment opportunities. Revenue Coin, a project launched by Revenue Capital LLC., aims to change this by providing tools that everyday users can implement to invest in promising startups, sharing the revenue of investee companies.
The team at Revenue Coin wants to launch a community-oriented launchpad and DAO to provide access to newly-launched projects and enable voting for projects selected by Revenue Capital.
Revenue Coin has picked Binance Smart Chain as its preferred blockchain infrastructure. The project’s ecosystem consists of two preexisting portfolio companies (related parties, Exeria and SkyRocket) and two tokens (RVC and SRVC).
The project’s ecosystem token, RVC, is supposed to provide several utilities to holders. It can already be staked and farmed. The SRVC token is a subscription token, and these tokens were on the market before the token generation event without vesting requirements.
The project is located in Georgia, a relatively favorable jurisdiction for cryptocurrencies.
The project’s core team consists of seven people. Two strategic advisors and ten advisors further strengthen the team.
However, the project is far from having an established presence in the market. Hence, its success depends on their ability to reach the milestones in its roadmap.
Our researchers gave Revenue Coin a final rating of 45.77%. The breakdown of this rating is available at the end of this report.
PRODUCT & COMPANY DESCRIPTION
Introduction to Revenue Coin
Revenue Coin is a token facilitating the investment vehicle Revenue Capital LLC.
Revenue Capital is aiming to build up a portfolio of start-up investments. Revenue Capital business accelerator’s existing portfolio includes Exeria and SkyRocket.
Revenue Coin has released two tokens – RVC and SRVC; both BEP-20 tokens. SRVC is a subscription token that can be exchanged for RVC tokens. The SRVC supply will eventually become zero upon all holders swapping it for RVC.
The Revenue Capital team aims to onboard its portfolio of companies into its ecosystem. As per a website article, 21 projects have been shortlisted. There is screening and due diligence ongoing for other projects. However, Revenue Capital has not yet made any investments in new projects since the launch of the Revenue Coin project.
The other objectives of the project are:
- To allow users to buy and sell services within Revenue Coin’s ecosystem.
- To provide the ability to pay with RVC in well-known payment apps and consumer stores.
- To launch Revenue Launchpad and Revenue DAO in 2022 and 2023, respectively.
The Revenue Coin’s ecosystem: Source: Revenue Coin
Revenue Capital LLC
Revenue Capital LLC, an investment entity, is behind the Revenue Coin project. Revenue Capital plays a central role in the Revenue Coin project since Revenue Capital will handle the funding of the selected startups. The project’s whitepaper states that Revenue Capital offers a capital injection to companies without taking up shares, which suggests that the company acquires tokens in investee companies. Importantly, Revenue Capital is responsible (Programme Council, to be specific) for selecting prospective startups or projects for investment. Revenue Coin token holders vote for such chosen startups. However, even with a voting system, Revenue Capital has the right to make decisions as an exception. For example, such an exceptional case occurred when a project (Racing Stars) was rejected at voting round but consequently pursued. Revenue Capital also retains the authority to terminate startup partnerships and delist them from its business accelerator. The composition of the Programme Council is not known.
Revenue Capital’s business accelerator portfolio consists of two projects, Exeria and SkyRocket. Exeria and SkyRocket were both co-founded by some of the management team members of Revenue Capital. Therefore, these portfolio companies are related parties.
The key highlights of the two portfolio companies are that:
- Exeria and SkyRocket have not received funds from the Revenue Coin project, and hence they would not be obliged to participate in the RVC buyback program.
- D-CORE researcher conversations on the Revenue Coin Telegram channel show that RVC token holders could deploy Exeria bots that could only be bought with RVC. However, Exeria’s website does not facilitate RVC as a payment method. None of the two company websites mention RVC.
In light of the above understanding, it is believed that Exeria and SkyRocket add little to no benefit to Revenue Coin token holders. The project’s whitepaper does not discuss these discrepancies clearly.
The Revenue Coin project does not solve a specific issue. The project is a centralized crowd investment platform with an affiliated token. The expressed improvements that the project claims to offer seem sub-optimal. Although the whitepaper briefly discusses a Decentralized Autonomous Organization (DAO), the project’s major investment decisions are still made by Revenue Capital.
RVC tokens can be bought on PancakeSwap and other exchanges. It is also possible to stake and farm RVC tokens. Staking includes four contracts – with no time limit, a 3-month lock, a 6-month lock, and a 12-month lock.
There is significant competition in the venture funding landscape. The business model of Revenue Capital and, by extension, the Revenue Coin project appears expensive from the potential investee companies’ standpoint (e.g., 10% revenue buy-back, Swap, and Burn term). As a result, the project’s Product-Market-Fit may come into question in its current form.
Based on our understanding, there are two success factors for the project. These factors are:
- Large potential market.
- Experienced executive team.
MARKET CONDITIONS AND COMPETITION
The venture funding space has grown exponentially since 2020. There were approximately 220 funding rounds worth over $6.61 billion in April 2022 across five key verticals. In the first four months of 2022, the industry collectively raised over $21.4 billion in investments. Many firms have entered this attractive field of investments, and many firms are joining the fray (recently, Haun Ventures).
Fundraising in the industry. Source: Footprint Analytics (last updated 05 May 2022)
Venture investment companies by the number of projects funded. Source: Footprint Analytics (last updated 05 May 2022)
Revenue Coin faces competition from multifaceted players, from traditional venture capital firms to the newest Venture DAOs. As discussed above, the traditional-type venture funds currently dominate the startup investment arena. Moreover, those firms tend to mostly co-invest in startups.
There are several competitors to Revenue Coin with similar aims and utilities. Revenue Coin plans to launch RevenueDAO in Q1 2023, and it will have to compete with already established Venture DAOs. Examples in this category are projects like the LAO, MetaCartel Ventures, and Stacker Ventures.
In Q3 2022, Revenue Coin plans to launch Revenue Launchpad, a community-oriented launchpad that would compete with projects like Kommunitas, Sovryn Origins, Polygen, Vulture Peak, Equinox, LunaStarter, ShibaPad, and EvolvePad.
Another notable competitor is DuckDAO, a decentralized incubator that hopes to provide everybody access to investment opportunities previously only available to well-fixed investors and venture funds. DuckDAO aims to open up the locked ecosystem of early-stage crypto project investments.
The philosophy of DuckDAO is similar to Revenue Coin’s assertion of supporting individualism and helping people access projects that previously were available exclusively to banks, investment funds, and business sharks. However, compared to Revenue Coin, DuckDAO already has a well-established ecosystem with 100+ projects in its portfolio. Also, like Revenue Coin, DuckDAO has deployed its native BEP-20 tokens on Binance Smart Chain.
How is the project different from its competitors?
Revenue Coin’s offering is not notably different from what most of its competitors are offering.
Revenue Coin is not entirely open-source. The smart contracts dealing with Revenue Coin tokens are deployed on the Binance Smart Chain (BSC). Their GitHub only hosts two repositories, and they are not active. There are also no public members contributing to these repositories. The project is highly centralized and uses a cryptocurrency attached to it.
D-CORE researchers learned via Telegram conversations that Revenue Capital has not deployed any funds raised for the project (~$8 million). Such funds are held in the forms of fiat currency (in bank accounts) and crypto (in multi-sig wallets, controlled presumably by Revenue Capital connected personnel). The project’s documentation does not discuss how it was treating uninvested capital. These operational mechanisms also point to the centralized nature of the project.
The team is negotiating with SharkGate and Racing Stars for possible investment. As per the Voting Panel on the project website, Racing Stars was not accepted by the voting community. Therefore, the negotiation of Racing Stars is taking place outside of the community voting process. Telegram conversations suggest that this has occurred due to miscommunications, and there was no incentivized voting. There was no official communication clarifying this situation to the community.
Revenue Coin has chosen Binance Smart Chain as their preferred network. The project does not contemplate developing a complex blockchain-based investment platform (instead, most of the investment activity remains off-chain and centralized). BSC appears to be appropriate for Revenue Coin’s purposes.
There are several advantages that BSC offers, such as its demonstrated rapid growth and adoption. Comparably, BSC also has low transaction fees. At the moment, the average transaction fee is 0.3342 USD/tx. Additionally, BSC is EVM-compatible, which means that any smart contract written for deployment in EVM can be conveniently ported to BSC.
The critical negative point is that BSC is often criticized as a comparatively highly centralized network.
CertiK has audited Revenue Coin. The audit sought to discover vulnerabilities and issues in the code relating to the token. The findings of the audit include 29 issues, with 8 of them being Major. So far, the project team has only acknowledged these Major risks around centralization and privileges.
Revenue Coin security assessment. Source: CertiK
The project’s current roadmap (recently modified) lists its high-level plans from Q2 to Q4 2022 and 2023. Some of these milestones could only be achieved upon Revenue Capital successfully deploying capital into portfolio companies. For example, in Q2 2022 – the project would not complete Swap and Burn until startups are included in the Revenue Capital portfolio, and such startups begin to release tokens. Moreover, RVC Buyback and Burn wouldn’t be feasible until startups begin to generate revenue. The DAO creation milestone is now listed as a target for 2023 (earlier planned for Q1 2023).
The project’s older roadmap versions show that some of the milestones have been rephrased (e.g., listing the token on dozens of DeFi exchanges), and other goals pushed forward (e.g., buybacks).
Revenue Coin’s team consists of seven people. The team members have experience building startup communities, developing algorithmic trading tools for cryptocurrency markets, and building mobile apps. There are also two strategic advisors and ten advisors.
Jarek Białek (CEO), has 15 years of experience building startup communities and accelerator projects, including accelerators of blockchain projects.
Piotr Piasecki, is a Member of the Board of Revenue Capital. Piotr has over 20 years of experience managing enterprises as SEO in Poland and the United Kingdom. He specializes in Marketing and Sales.
Eduardo Gamarci (COO) brings 15+ years of experience as a professional trader working for proprietary trading firms. He was also involved in developing algorithmic trading tools and software for the Equity, Option, and Cryptocurrency markets. (Linkedin)
Adam Cukrowski, is a co-founder of Revenue Capital. He’s also a co-founder of SkyRocket.
Mikko Puhakka, is an experienced consultant and investor, specializing in startups, Venture Capital, and community-driven businesses, operating mainly in Europe and China, with more than 25 years of track record.
Andy Cheung, founded AC Ventures and BBS.exchange. He has held senior management roles in many entities, like Bitwork, OKX, iClick, Groupon, and Alibaba. Andy also functions as an advisor to several projects.
Kevin Hugh Donnery, has experience in the financial services sector. He is also an advisor to Carter Capital and a Finance Consultant to Gummys.
Piotr Grela, has a background in trading. He founded Tradercom Investments and conducted training and seminars on DiNapoli techniques. According to his LinkedIn profile, he’s a private investor in Revenue Capital.
General Comments on the Team & Advisors
During our review period, we did not find evidence of the team members having taken part in any previous or current illegal projects or projects that were controversial. We did not find evidence of the Advisors’ involvement in any controversial projects either.
LEGAL AND COMPLIANCE SPECIFICS
Revenue Capital LLC, the private company behind Revenue Coin, is headquartered in Georgia.
Georgia has been described as a reasonably favorable jurisdiction for cryptocurrencies. Owning and trading crypto is legal and, for individual traders, tax rates on gains are 0% in many cases. The application of tax laws exists, while the application of AML/CFT laws does not exist. However, an implicit ban prohibits lenders, banks, and other financial institutions from dealing with cryptocurrencies.
Revenue Coin has partnered with Tenset, and under this partnership, Tenset will introduce Revenue Coin to cryptocurrency influencers and players in the Asian region.
Revenue Coin’s partnership with F6Sis aimed at opening a call for applications from high-tech companies in FinTech, blockchain, AI, and Web 3.0 technologies.”
There is no publicly available record of any venture capital investors participating in Revenue Coin fundraises.
As per a very recent website update, Gvantsa Baidoshvili has been appointed as the Legal Counsel of Revenue Capital. Gvantsa also works as the Legal Counsel for Meta Brothers Production. Previously, she was a Legal Adviser to WeKr3ate Media, TerraShops, and PwC Georgia. She’s a graduate of Tbilisi State University. At Revenue Coin, Gvantsa will be assisting in the legal onboarding of portfolio companies.
KYC & AML
According to the information posted on the project’s official Telegram channel, there were no KYC requirements when buying tokens for less than $20,000. Citizens of the United States of America and Canada who wanted to purchase tokens worth more than $20,000, might not have been allowed to participate in the public sale.
The project’s team has explicitly mentioned that the RVC token was created as a utility token, and that, based on their expertise and legal opinion, the token is considered a utility token. The token presale was conducted as per a SAFT agreement.
The team asserts that the token can be used to access services provided by Revenue Capital LLC and companies operating within its ecosystem. The token will also offer a payment function.
Regarding the SRVC token, the team reasons that the SRVC token’s principles of operation “are different from the definition of a security and the principles of operation of security type financial tokens”. Before the public launch, the project issued SRVC tokens to anyone who could not participate or did not want to participate in the presale. Holders can exchange SRVC to RVC at a 1:1 ratio. As such, SRVC is burned upon exchange.
Future regulatory changes might constitute a legal risk. Certain jurisdictions might classify RVC tokens as securities. This is acknowledged in the SAFT agreement:
“The Purchaser is aware that the Agreement may be classified as securities in certain jurisdictions and that the offer and sale of the Agreement have not been registered in accordance with the Securities Act in any country and therefore it may not be resold unless they are in accordance with applicable law of the country.”
We also highlight the below points:
- It is worth noting that the language in the project’s whitepaper implies an increasing value for RevCoin and hints at a token value of USD 0.86 in the first years. Similarly, the website also references the future value growth of RVC tokens.
- Revenue Capital will be a party to agreements with companies that receive funding. Moreover, investment selection and startup partnership terminations are the responsibility of the Programme Council. Token holders only have the opportunity to vote for or against such a project upon selection. However, even in that case, there could be exceptions made by Revenue Capital.
- The proposed DAO will also be bestowing two rights to the token holders: voting for Revenue Capital’s investments in token projects and Treasury management. This scope of the DAO means that the token holders would have to rely on significant managerial efforts on the part of the Revenue Capital for the delivery of results.
As per the Whitepaper, the initial total supply of RVC tokens was 8,888,888,000. Out of this, 50% was allocated for private and public token sales. The balance of 50% was allocated to Revenue Capital for promotional and project-related activities.
However, later the total token supply was reduced to 1,729,481,687 RVC. With this change, everything in the tokens section of the whitepaper may have to be amended. The Revenue Coin Panel reports the circulating supply of tokens at 561,719,444. However, the CoinMarketCap website does not verify this circulating supply number.
Tokenholder distribution analysis. Source: CertiK
At a seed phase, the price was $0.0075. At the private sales, the prices were $0.0095 and $0.0105.
20% of the team tokens will be released after one year from being awarded, and 2% of the unlocked tokens will be vested every subsequent week until all tokens are released.
The RVC token supply is finite. The token supply of RVC could become deflationary if the proposed buyback mechanism becomes a reality.
Every month, 10% of the portfolio companies’ revenue is allocated to the buyout of RVC tokens available on the public market. Afterwards, 50% of these RVC tokens are burned, with the rest moving to the fund of Revenue Capital LLC for future investments in other companies. Coin burning involves removing tokens from circulation irrevocably.
Revenue Coin managed to raise over $8 million from selling tokens. RVC is listed on several exchanges. However, it is not yet listed on any reputed exchanges. The token has lost ~86% of its value from the all-time-high of ~$ 0.043. Moreover, RVC is very illiquid.
RVC to USD chart. Source: Coinmarketcap (as of 08 May 2022)
Revenue Coin holds a significant amount of tokens for promotional and operating activities. 50% of tokens were distributed for these activities. In the event there would be cash-outs by the team, the token may experience a negative market sentiment.
Supply and Demand Dynamics
Staking and farming rewards: Staking and farming rewards apply every three seconds and can be claimed at any time.
Token unlock and vesting: Users have the option to choose four staking contracts with either a 3-month lock, 6-month lock, 12-month lock or with no time-limit. So far, 55% of the vested RVC tokens have been released, with the remaining 45% released at a 2% weekly rate until 19 September 2022.
Staking plan. Source: Revenue Coin
Staking: At the moment there are 7,401 token holders and the most used staking contract is the one with a 12-month lock, with 54,096,417 total RVC tokens staked. The staking demand is subject to change depending on the APR and its attractiveness against other alternatives.
Utility: The RVC token is meant to fulfil several utilities in the Revenue Coin’s ecosystem. For instance, the token is supposed to be used as an internal means of payment within the ecosystem, and it also offers voting rights for holders to make decisions about which projects will receive funding from Revenue Capital.
SOCIAL MEDIA AND VIRALITY
The project is relatively active on Twitter. It has 22.1k followers. The project’s Twitter account is seeing a decrease in the number of followers. On February 25, the account had 24.7k followers.
Revenue Coin – Twitter Activity (30 days by day). Source: Certik
The most accessible and popular channel to communicate with the team is the project’s Telegram channel. The management team actively participates in community discussions on varying topics about the project. The channel has about 11.4k followers. The channel is experiencing a decrease in the number of followers. On February 26, the channel had 13.5k followers. The project doesn’t have an official Discord channel.
Revenue Coin has 278 followers on LinkedIn. The project also has a presence on Facebook. Currently, the Facebook page has around 1.4k followers. The page has not been updated since January 31, 2022.
Revenue Coin has a YouTube channel, with 518 subscribers. Several YouTube channels have discussed Revenue Coin. Some of these are:
- Crypto Gems – 5.9k views
- AJC – 37k views
- My Financial Friend – 8.4k views
RISKS TO THE PROJECT
The following list of risks is not an exhaustive one. Some risks may be minor/not materialize.
- Regulatory & legal: Were the project to be subject to regulatory purview, there might be impediments to the project’s growth as it could be seen as an attempt to bypass financial regulatory guidelines and be labelled as a sale of unregulated securities (regardless of its attempt to say bypass it openly in its SAFT agreement). Due to the project’s centralized nature and how it raises funds and represents its worth in an appreciating underlying asset, there is a significant risk of the token fulfilling the requirements to be a security. If this risk materializes, the project may have issues.
- Business model: The proposed model of levying a buyback cost of 10% on the revenue of startups and the issuance of startup tokens to RVC holders (Swap and Burn) cast doubt on the sustainability of the project’s business model.
- Poor liquidity/value of the token: The token exhibits poor liquidity and low value. At the moment, the token is not listed on many exchanges and is not available on any major centralized exchange. From its all-time high at $0.04, the token has dropped in price by 85.3% and is trading at the moment at $0.0057. The large drop in token’s price is contradictory to the message conveyed by the project, asserting that the token will increase in value exponentially over time, which does not inspire trust or confidence.
- Hacks/exploits: The project’s implementation of smart contracts on BSC presents an opportunity for malicious actors to find and exploit vulnerabilities. A number of projects relying on BSC have been exploited in the past. Smart contract vulnerabilities is one of the main types of hacks occurring most frequently on the blockchain. Moreover, the smart contract audit by CertiK found major risks around centralization and privileges which are not resolved yet. These risks are also concerning.
Everything you see in this report is the aggregate result of an extensive research process carried out by a distributed team of researchers and crypto enthusiasts around the world. The process consists of 60 questions divided into three phases. Researchers are called to answer these questions about a project, while providing links or screenshots as evidence to support their answers. For every answer, they also provide a rating from zero to ten. The average of their ratings is detailed below.
Our researchers gave Revenue Coin a final rating of 45.77%.
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