Coinvest H1–2019 Semester Update – Coinvest – Medium
It’s been another busy semester for our team at Coinvest. Since starting Coinvest a year and a half ago, we’ve continued to work hard to create a name for ourselves in the industry. In February, our team reached a major milestone with the launch of both Coinvest and Coinvest Plus to the public. During this period, our team also on-boarded over twenty new partners which increased the number of available markets on our exchange to more than fifty. But more importantly, this resulted in new users, activity, and revenue on both platforms. The increase in users and activity enabled us to study user and system behavior. Additionally, gather significant feedback and discover issues that we never anticipated.
At present, there are over 1500+ registered accounts and a mix of over 250,000 assets under management. With the philosophy of starting small and scaling, we have intentionally kept our releases controlled to ensure the security, stability, and operational performance of both platforms. That strategy proved to be effective as we discovered and mitigated risks associated with attempted hacks, manipulation, and more.
Post-launch, we discovered that a few users were able to game the trading system as a result of the low volume in our $COIN token. We have since addressed this risk with a variety of solutions including updated algorithms and more. We have decided to keep the trading functionality offline in the short-term and plan on reopening it later in June to align with a larger marketing campaign.
In April, and as a part of a system audit, we discovered a bug and exploit in the XRP token as described in the following article directly from Ripple Labs: https://developers.ripple.com/partial-payments.html. In deep review and investigation by our team, it was clear that a number of users attempted to leverage this exploit to manipulate the system and other users to their advantage. In turn, these attempts resulted in minor operational and financial loss for users and Coinvest. We quickly responded by disabling the market, patching the issue, and making users and the system whole again.
With your help, feedback, and only after a short period of time, we released a number of bug fixes, UI updates, security enhancements, new token support, and more.
As for the platforms in whole, we’ve experienced low volume in all markets. This can be attributed to a number of reasons. However, we believe the largest reason can be isolated down to one key driver. Unlike many dapps, exchanges, and other platforms in the industry, Coinvest as a company does not enable or support market making activities. This includes autonomous bots that drive fake volume, activity, and inorganic results. All of which are systematic problems in our overall industry today.
To this end, we have decided to temporarily remove all markets from Coinvest Plus, with the exception of BTC, ETH, and COIN. We will be focusing on driving volume in these primary markets and reopening the others once momentum has been built. As usual, users will be able to withdraw funds with no issues; however, deposits for these markets will be disabled. Once a market has reached net zero, we will temporarily close it. We advise that you begin executing your withdrawals for all non-BTC, ETH, and COIN markets.
Both Coinvest and Coinvest Plus remain at the core of our infrastructure strategy. We will continue to build upon each with updates and features to provide you with a best-in-class experience that is simple, secure, and compliant. (Although now doing so with an extreme focus on core features and markets)
Due to capacitor supply issues (https://www.sourcetoday.com/supply-chain/capacitor-shortages-continue-least-another-year-executives-say), the Vault will now be delayed until late 2019 (as priority is given to larger manufacturers and bulk volume orders versus smaller companies such as ours). Additionally, the gold founder’s version will no longer be available as that finish would contribute to additional delays in manufacturing and shipping dates.
As previously communicated, the Vault was scheduled for release at the end of Q1 (late March). Upon approaching our initial product manufacturing date, one of our hardware partners revealed their roadmap for the development and future release of a major part that is utilized in the core functionality of the device. While we can not disclose full details due to our legal NDA with this partner, this new part offers advantages and value that position the Vault significantly ahead of any existing competitor offerings. Meanwhile, increasing the security, efficiency, and performance of the device… all at the same time. The new part is nearly a clean substitution for the current part. As a result, will not alter the current design nor require any new mechanical engineering. While delays are never ideal, we chose this direction due to:
- Having a first mover advantage with this innovative technology
- Concerns regarding customer satisfaction assuming an initial launch of the Vault and updated release cycle less than a year later
- The competitive advantages gained with the inclusion of the part
Because of both of these issues, both bad and good, all existing orders (including COIN and Fiat) will be refunded over the next two weeks. We ask those that are interested in purchasing a device to resubmit your orders upon future release announcements. We apologize for the inconvenience; however,
- Believe that consumers will be even more excited about the Vault with the addition of these new software and hardware security features
- Believe that full refunds are the best way to minimize confusion and for consumers to manage their purchase decisions both now and in the future.
Despite the above, we will be revealing a UI demo of the Vault to give users a glimpse of the full user experience in the near future.
When we started our fundraising journey a year ago, we raised a total of $5.5M in funding from our community of Coinvestors. Those funds were raised in ETH in which the price ranged anywhere between $600 to $1,300 USD. To demonstrate our commitment to our long-term vision and reinforce trust with our token holders, we held those funds in our token offering wallet with no movement. Funds were only liquidated as needed for working capital. Unfortunately, our strategy of ensuring trust with our community versus appropriate asset management worked against us due to declining market conditions in 2018. As a result, our $5.5M raised actually netted $2.5M in working capital. This situation hindered our ability to execute our full engineering, marketing, and operations strategy as planned.
Considering the circumstances, we are still extremely proud of our progress over the past year. In an industry full of bad actors, scams, and little output… our team at Coinvest accomplished the following (all in-house with no outsourcing in engineering):
- Website V1
- $COIN token V1
- Coinvest MVP V1 for token offering
- Token offering tools
- Coin explorer
- $COIN token V2 (upgrades and additional features)
- $COIN token V3 (to patch a security vulnerability)
- $COIN smart contracts and upgrades
- Website V2
- Coinvest product and launch
- Coinvest Plus Exchange product and launch
- Coinvest Vault product engineering
- Coinvest Safe product engineering
The above does not include work from operations, legal, business development, partnerships, unannounced engineering, and more.
Despite these accomplishments, the reality is that our company is at a stage in which we are in need of raising additional capital to proceed with operations. We are considering multiple investment / fundraising options (including company equity) and are engaged in conversations with potential investors. We are extremely focused on our mission and still remain confident in achieving it by partnering with the appropriate investment teams. We have obtained short-term financing and upon closing a larger investment partnership deal, we will announce these details publicly.
In relationship to our runway, we’ve also had to scale down our team. As budgets decrease, we’ve had to work very hard to remain lean and cut expenses where needed. This has included a reduction in staff. While this can also be construed as positive, the point to note is that transitions are disruptive to any business and personal relationships. As a result, impacts timelines, plans, and momentum. The silver lining is that it has forced us as a company to continue to operate with a very lean mentality that we believe is extremely healthy.
During the semester, we also experienced other unexpected issues such as the closing of both of our corporate banking accounts at Chase and Capital One. These closures occurred at different points in time as both Chase and Capital One have taken a conservative stance in supporting blockchain related companies. As a result, we’ve had to spend unplanned cycles in moving our banking relationship to other financial institutions that are more progressive in supporting our industry.
Starting and managing a business is not easy. There are very many variables involved in recruiting a solid team, engineering a product, and bringing it to market. Especially in an evolving and unregulated industry that is still trying to find its identity. This doesn’t include attempted hacks, cultivating a healthy working environment, managing user and employee expectations, resolving unexpected issues, and more. Despite these barriers, we’ve managed to bring to market multiple products, accomplish major milestones, with no concerns regarding any fraudulent activity or negative sentiment. Something we as a company are extremely proud of.
Coinvest has required many sleepless nights, time away from our loved ones, and undesirable sacrifices. I am confident that I speak on behalf of everyone at the company when I say that everyone in the company believes in the mission, enjoys the work each is accomplishing, and the potential impact we can all create together.
So what does this mean and what’s next?
Well, some things don’t change. We are continuing down the same path that has established our company’s brand and reputation. And that’s being heads down with hard work and a maniacal focus on engineering. In the coming weeks, we will be providing our fans, token holders, and the overall community with a significant update on the future direction of the company. This will include an operational strategy, additional token utility, roadmap, and more.
As many of our community members are aware, we previously announced that the company would no longer actively monitor our Telegram channel. Rather, resort to more traditional channels of communication that are more structured, secure, and enable our smaller team to focus on core business responsibilities. With that, we would like to ensure that we continue an active dialog with our community alongside our regular updates.
We would like to announce our Coinsider program; an invitation-only program for select members to receive early-access to information, product betas, and more. This select focus group will represent the collective interests of multiple audiences (such as token holders, community members, potential users, advisors, partners, etc.) and help bridge the gap between Coinvest and its broader community. Coinsider’s will be invited directly to the Coinvest company Slack channel and assist with providing feedback, testing, have access to communicating directly with all Coinvest team members and more. Additional, details for this program will be announced soon.
While this update is extensive, we feel it is necessary to provide a complete update and full context on all company developments for the first half of 2019. Especially while our company is in transition and navigates the ever-evolving industry landscape. We feel that it’s our continued responsibility to be very transparent and truthful regarding our progress. To that end, we look forward to revealing Coinvest 2.0 and many of the things we’ve been working on behind the scenes in the near future. Changes and improvements that have made us more optimistic than ever…
We would like to thank you for your continued support and look forward to updating you again very soon.