The Fall of Davor Coin
Everyone is really rough on these lending sites. I bought into several of them and if the regulators left them alone, they would be a great investment platform. So far, Davorcoin has done exactly what they said. The interest has been paid out every day on my loan, no matter what the going rate of a Davorcoin is. And. the people running Davorcoin didn't duck and run with the money when Bitconnect got that cease and desist. Bitconnect stiffed me and everyone else who did business with them. So far, Davorcoin has stood behind it's promise. As long as they keep paying out the interest, what is there to complain about?
Cuz the whales sold at the top... the whales being the people who started the project... they claimed davor ico was sold out in 10 secs. I think THEY "bought" all the coins. Then they sold out when price got to 180... The volume is pitiful and who was going to replicate bitconnect after what just happened. The owner never wanted to show his face... scam scam wasuh wasu wasu!!!!
Even if it is a Ponzi its not dropping because of that.. The sent an email out saying that anyone can cancel their contract and get their capital back at any time with a concequence of the first month's interest and the %50 of the 2nd months interest. So more than likely people are scared and cancelling their contracts. Davor does not have an anonoymous owner so if it is a ponzi he could be held accountable. Davor is gaining trust with its user by giving them the option of giving their capital release back so when people start coming back Davor will shoot to the moon or go down to zero and shut down.. Im holding and will see what happens. USI Tech was also shut down but the reopen and proved they were not a ponzi.
Davor is TIED to bitcoin. As bitcoin fluctuates so does davor. In December when Bitcoin was mooning, people were buying into the platform/token. This can be seen on coinmarketcap. Every time there was a bitcoin spike a volume spike for DAV followed and as Bitcoin went up so did DAV. Now with Bitcoin falling back to earth from the moon, the opposite trend is occurring. Every time this is a Bitcoin drop, there is a similar DAV selloff/decrease in sentiment. This coupled with BitConnect's recent failure means there are even larger sell offs of DAV. This has driven cost down to ICO buy in levels. Yes, the whales and their large accounts have likely contributed to large volume spikes near the peak and on the initial downfall from the peak. But now we are largely looking at panic selling. To Davor's credit they are making the lending capital more liquid, which is also leading to panic selling. The low interest returns are concerning as they had these massive interest rates when Bitcoin was mooning. Well anyone could have made money with almost any crypto at that time. Just peel off a layer of the onion and sell it. Call that sale interest and the coin price goes up to fill that layer of the onion you just sold and Boom! You are a money making machine...until Bitcoin falls.
The part that concerns me is that this platform uses a trading bot the needs market volatility to make money. Well, the market is really volatile right now so why is the bot having trouble making money? The answer is that the core capital is given out to lenders as US dollars that don't fluctuate with Bitcoin prices. So now the platform owes all these loans with large US dollar amount the interest from a core capital stake that is shrinking with Bitcoin falling. They can't keep up high interest payments in US dollars. Thus, the interest rates are starting to scrape the bottom of the barrel. They will stay there until bitcoin comes back up to a point where the large bulk of the lends were taken out. The unfortunate part for Davor is that they did their ICO right when things were mooning for Bitcoin and the large bulk of the loans were taken out between 10,000 and 20,000 for Bitcoin. Presuming Davor is making a good faith effort, things will improve if Bitcoin gets back to the 15,000 range. If the price of Bitcoin continues to fall, interest rates will continue to fall as will the price of DAV.
What I would like to see Davor do is be open about the core capital and loan burden. Something along the lines of core capital value in BTC and loan burden in US dollars displayed on the dashboard and a lovely chart to see how these two interact with each other. The other thing to do would be to reduce the amount of leverage they have in the lending program. If they have $100 in core capital, only have $50 in crypto and keep $50 in US dollars or USDT. This could reduce fluctuations and smooth out returns but would result in lower interest rates due to lower leveraging.
These are my thoughts. What are yours?
