As part of our coin specific Tokenomics series, I wanted to take a look at (RVN) Ravencoin Tokenomics. To start, as with all articles on Understandingcrypto.info, neither myself nor any of our authors are financial advisors. Additionally, none of the content or articles should be considered financial advice. If you are familiar with our site, you know it is an ever-growing resource we decided to put together so we would have all our crypto due diligence notes and links in one place. We then thought there may be some interest in people hearing about our journey to this point (lots of crypto losses), what we’ve learned along the way, and how we approach things now (gains for days). These articles are simply our thoughts and stories about what we’ve learned. These are our opinions and are meant for entertainment purposes only and may not be applicable to you or even part of the financial norm. However, it is how we use and view crypto, and does detail our specific approach. Lastly, when it comes to Ravencoin in particular, it is a coin that currently represents a large portion of my portfolio. So please be aware that these are my bullish sentiments at time of writing. Always do your own independent due diligence when learning about any crypto project. Now, with that out of the way, let’s get started!
To understand the lens in which we will view Ravencoin Tokenomics, be sure to get a refresher on what metrics we use. Be sure to read Tokenomics – Crypto Marketcap Explained and Tokenomics – Crypto Daily Volume Explained. Those will be the foundation of what we talk about today.
What is Ravencoin (RVN)?
Ravencoin derives its name from a bird called Raven that was used to deliver statements of truth in western folklores. It is a peer-to-peer digital network used for transferring digital assets from one person to another. It is also a Proof-of-Work currency based on a Bitcoin fork. The coin was launched on January 3, 2018, during Bitcoin’s 9th anniversary.
Ravencoin has some distinctive features that differentiates it from Bitcoin. For instance, its block-time is one minute, has an issuance schedule block reward of 5000 RVN (at time of writing) and uses X16R mining algorithm. That is an algorithm that counters ASIC miners to prevent centralization by disrupting the hashing algorithm’s ordering like is in the case with Bitcoin.
The main purpose of this coin is to enable transfer of digital assets like tokens from one individual to another. It is good to note that this coin is free from ASICs thanks to its algorithm, had a fair launch, there was no pre-mining and is not linked up to any exchange. These tokens can have whatever properties the issue of the token decides – so they can be limited in quantity, named and be issued as securities or as collectibles.
What Makes Ravencoin Different from Bitcoin?
- Initial Block reward of 5,000 RVN instead of 50 BTC.
- Block time of 1 minute instead of 10.
- Total coin supply of 21 billion instead of 21 million.
- A new mining algorithm, KAWPOW which allows for more decentralized mining.
- Addition of Asset & Sub-asset issuance, transfer, unique assets, and rewards.
- Future addition of messaging and voting.
Setting a Baseline:
At the time of writing, these are the numbers behind RVN:
And these are the top 3 cryptocurrencies at the same time (9/18/2021):
As mentioned in our two Tokenomic primer articles, we believe BTC to be as it is generally looked upon, as digital gold. Of all the cryptos, if we wanted the safest place to set it and forget it looking back 5 years from now, that would be where we would put all of our crypto portfolio. Which means, if we end up HODLing any other coin, it is because we either a) Believe it will outperform BTC in that same time period or b) want to support the crypto project itself. For RVN, both A and B apply.
Understanding that, the only ‘guidepost’ we will make to our Ravencoin Tokenomics examination is that we bullishly believe BTC will be at $100,000 (at least), by the end 2023 to mid 2024. However, whether it gets there sooner, or even 3 years later, that $100,000 BTC is our baseline value that RVN needs to perform against.
Second, the only ‘assumption’ we will make is that RVN will move, generally, in line with BTC. If BTC goes up, most crypto projects also go up. If BTC plummets, so do most other cryptos. So, if you can get behind both the single guidepost and the single assumption, we are ready to begin.
Relative to the top 3 cryptos, Ravencoin’s marketcap of $1.11b is extremely attractive. To approach Cardano at the 3rd spot (with the current supply), RVN would have to go up 75x. That would put it at over $8.50. Again, we clarify that is at the current supply, because RVN is a Proof of Work blockchain, so it is being mined. As time goes on and more RVN are mined, to generate that same marketcap (around $75-76b), would mean a lower than $8.50 price. So could RVN hit $10? In its current state, in today’s Tokenomics, not likely. It probably won’t be anywhere near #3 for quite a long time, if ever.
However, if we move over to our guidepost where BTC would be at about $100,000 (a little more than double where it is now), and the other cryptos followed suit, Cardano with its current supply would be at about $150b marketcap. Still far under a static ETH. At that point, an $8.50 RVN would be about 8th or 9th in total marketcap, right around Dogecoin. Again, and it is the last I will mention this disclaimer, we are using today’s supply. The supply of all most all these comparison coins will go up over time. For the sake of the article though, we are looking through a generalized lens to see what numbers are realistic. What this also tells us is there is a real answer to all the Youtube and Reddit questions such as, “Can RVN hit $1?” “Will RVN hit $3?” “Is a $5 RVN possible?” My answers would be Yes, Yes and Yes.
Crypto Daily Volume Unit (DVU)
We break down DVU in the article HERE. Using the stats from 9/18, RVN has a DVU of 275,438,596, and a Normalized Daily Volume (DVN) of 2,754. If you follow our Tokenomics, you will know is a low number with BTC having a DVN of 581,169. That is a 210x difference. So using that, the price of RVN, should be 1/210 of BTC $229.91. Obviously, it is no where near there. Which means for the price it does hold ($0.114), it actually has a strong daily volume.
It must be said, we don’t think RVN could or should be at $230. It wont hit that value, however, unrelated to price it does mean there is some good adoption already. Compare it to Bitcoin Gold (BTG) which is the 94th top crypto by marketcap (RVN is currently 98):
BTG has a DVN of 247, 10x below RVN’s. So even though Ravencoin still has ample room to grow, its DVN in regard to its current price is actually strong. This is especially true when compared to other altcoins in its marketcap zone.
What We’ve Learned So Far about Ravencoin Tokenomics
Using both Marketcap and DVN, we see there is promise behind the price growth of Ravencoin. If these two metrics had no room for growth, it would mean RVN would have to outpace all the top crypto projects for a price increase. This is not the case. RVN can increase significantly and not even dent the pricing or adoption of other cryptos. I would go even further to say, that with the current DVN, RVN is under-valued and not only could be higher (due to marketcap) but should be (due to the DVN).
All that is great news, however, no matter how great a blockchain project is, if it doesn’t have growing adoption it won’t matter.
Types of Adoption
There are two types of crypto adoption. Usage and Social. This can often be looked at as a chicken and egg scenario. Do you need social awareness to increase usage adoption? Or does increased usage create more social adoption? Crypto projects have succeeded (and failed) by only focusing on one of these adoption types. However, RVN has the opportunity for both coming in the next 6 months based on 3 key catalysts.
Ravencoin Tokenomics Catalysts
Over the next 6 months or so, RVN has 3 MAJOR catalysts coming. Catalysts that will each impact adoption in their own way. I must clarify and say that the 6-month time frame is when viewed through a crystal ball, meaning, I have no idea when all 3 will happen. It could be sooner and it could be later. However, RVN will continue to grow at least through all the catalysts, and even a bit after. After all the catalysts have happened, then it will be time to reassess the RVN project, rerun the Ravencoin Tokenomics, and see how the project responds to the catalysts.
So what are the 3 catalysts?
Catalyst 1 – The RVN Halving
Of the three catalysts, this first one is the easiest to talk about because it is the most ‘set in stone’. In Jan 2022, RVN will undergo its first halving. What does mean?
As mentioned in the beginning of the article, RVN is based off Bitcoin. Bitcoin halvings happen roughly every 4 years. Each halving means the rewards for mining bitcoin transactions is cut in half. For RVN, which was started in Jan of 2018, 4 years later puts us at Jan 2022. And the current block reward of 5000 raven will get cut in half.
If you look at this BTC chart, Bitcoin rose and created a new pricing floor within a year of each halving.
Looking at the same YOY chart for RVN, it has moved inline with the early years of Bitcoin. The BTC range between mid 2011 to early 2012 looks a lot like the RVN chart from early 2021 to mid 2021. As RVN continues to move toward the halving, it should continue its upward trend.
The bigger excitement for RVN will come in the 9-12 months after the first halving. It should continue to see forward growth through that time. Comparing the pricing, if an $18 BTC was equivalent to an $0.18 RVN, then a $550 BTC would be equivalent to a $5.50 RVN. As with all financial models, past performance does not predict nor guarantee future outcome. However, having a crypto project such as RVN continue to move in line with BTC as it has already done is a possibility. Incidentally, a $5.50 RVN is still far under the marketcap ranking we talked about earlier at $8.50. And we would be looking at the end of 2022 by comparison. So if you believe in the guidepost that BTC will continue its upward trend, not only will RVN, but Catalyst 1 offers room for growth above and beyond BTC’s expected growth. Very promising.
Catalyst 2 – Coinbase (and other exchange) Listings
The second significant catalyst coming for Ravencoin Tokenomics is its listing on more popular exchanges, the most notable being Coinbase. At the time of writing, Coinbase does not list RVN for trading, which means your average, new to crypto investor, does not have an easy way (or should I say a familiar way) to buy RVN. If more people were buying it, the price would go up. How much would it go up? There are no guarantees either way, but the average gains within the first 6-day window of being listed on Coinbase is 43%.
In itself 43% gains doesn’t sound super sexy. After all, it just puts RVN back to where it was a few months ago. However, the 43% increase isn’t what is exciting about a Coinbase listing. Rather, if Coinbase lists RVN, it is likely other major exchanges will start to as well. Additionally, once the other catalysts hit, the easier it is for your average Crypto investor to buy RVN and as a result, the more impact each of the other catalysts will make. So this Coinbase listing should be viewed as more of a compounding catalyst… something that will augment any other catalyst. That is definitely worth more than a 43% price bump.
The X-factor with the Coinbase listing is not ‘if’ as much as it is ‘when’. All the paperwork has been submitted for the listing. The RVN community is just waiting for the green light. Whether it happens before the halving, concurrent to the halving, or after I cant speak to. For it to have the most impact, our hope is that it happens at least 6 months prior to the end of our Catalyst 1 window. Which means as long as Coinbase lists RVN by mid 2022, the coin will receive maximum benefit from the halving.
Catalyst 3 – ETH 2.0
The third catalyst, and perhaps the most controversial, is completely out of the hands of the RVN community, and that is the continuing upgrade of Ethereum (ETH) to ETH 2.0. There is a lot of news and documentation on the upgrade a quick Google search will net you, so I will keep it simple here.
At some point, Ethereum will be moving from its current PoW (Proof of Work) status to a PoS (Proof of Stake) status. Essentially, this will halt the mining behind ETH and change it to a staking model. As a result of that change, all the ETH miners (or at least those mining with their GPUs) will want to move their mining power somewhere else. Some believe crypto mining will become obsolete at that time, but there is little chance all the GPU miners of the world will give up free income… “just because”. Even if it isn’t as profitable as ETH, free coins are free coins. And yes, it can get to the point of free after a mining rig is paid off, electricity costs are covered (or lowered using green energy sources) and any ancillary costs are covered. Anything mined beyond that is ‘free’ money.
At the current price, it is ‘more profitable’ to mine ETH and either just keep it or change it into another your favorite crypto (such as RVN). However, as ETH gas fees continue to increase, there will coming a tipping point. As RVN continues to rise, the 5000 RVN reward becomes more valuable.
As the reward becomes halved, the price of RVN needs to double to still be ‘less profitable’ than mining ETH. But anything beyond that, or as ETH gas fees increase, or as ETH finally moves to PoS, that metric continues to slide in RVN’s favor.
Part of the controversy around ETH 2.0 being a catalyst for RVN comes in two key points. The first is ETH 2.0 has been promised for a long time, and keeps getting delayed. However, the London upgrade was part of that migration, and it went off without any large issues. Additionally, the PoS is already being tested and working. So while it may not be in the next month or two, we do expect it to happen no later than March-June of next year. Maybe earlier, but either way, it will change the landscape of crypto mining.
The second controversy is where those miners will go. RVN is but one of many options. Ergo and ETC (Ethereum Classic) are two of the other more talked about options outside of RVN. Additionally, Im sure between now and ETH moving to PoS, more PoW coins will try to position themselves to grab the attention of miners. However, from being in the mining community, it is clear to us that RVN will grab a share of the ETH GPU miners. Even if they do not grab all of it initially, as the price of RVN increases, the value of the rewards will increase, more and more miners will jump in.
So why are more miners important? More miners does not mean a price increase in itself. In fact, the more miners competing to mine a stagnant priced coin would mean less rewards. However, more miners means more network activity and more network security. The more activity it has and the more secure it is, the more valuable it would be. Once Catalyst 1 happens, it will be even more difficult for miners to gain value from mining RVN. So either the RVN price will go up, or the project will die. Which is more likely? Well, the project hasn’t died yet. The DVN is showing promise. The value has steadily been increasing. And when Catalyst 2 happens, it will gain even more adoption. That’s a lot of positive movement for a coin that would either grow or die.
So where does that leave us? The halving is the only catalyst we can be sure will happen. The other two are likely, but there is no exact timeline. However, it is our belief that all will happen by mid 2022, which would give us increased growth all the way through the end of 2022. Sometime in there is when we would want to evaluate next steps. Until then, we plan to continue to accumulate and HODL.
This wouldn’t be a fair deep dive if we didn’t look at the drawbacks of RVN (outside of not yet being listed on major exchanges). The major drawbacks we see are a) A limited development community, b) Subpar mobile wallets and c) NFT adoption (using RVN vs ETH based systems).
Of the 3, A is the most concerning. There are currently only a handful of developers (all extremely talented) who are continuing to help do the ‘hard’ work in bringing the community desired improvements to the chain. However, a lack of blockchain developers isn’t a RVN-specific issue, it’s an industry issue. MATIC, another coin we like, has made a multitude of deals recently. They have all the Social adoption in the world, and they are also facing a developer shortage. The issue for RVN is, what developers are there mostly will go and work on projects that could be most profitable for them. So while RVN development is happening, it is slow. More developers are needed.
That doesn’t mean RVN will die on the vine. In fact, RVN was initially designed and set up in 2018 with the future in mind. But more on that when we get to the 3rd RVN drawback.
The second drawback of subpar mobile wallets is being addressed. A new mobile wallet will be released soon, and should help. A difficulty in RVN mobile wallets ties directly to how useful and versatile the coin is. A great RVN wallet will be one that can securely hold not only the EVN coins, but also the RVN Assets (which are made with RVN coins). When Coinbase lists RVN, many people will keep their coins there. But as the saying goes, Not your keys… not your coins. So we need a safe place to house our coins, of which there already are some. However, many like the convenience of mobile aps, and they are a large part of social adoption. And while there are ways you can access your RVN mobile, it needs improvement. Thankfully, this should be addressed in the near future, so would no longer be a concern of ours. And again, I would like to remind you, RVN can be stored easily and securely in its current state. This is true for both the coins and assets. However, we feel that an easier way is needed to help increase the social adoption.
The final drawback is NFT adoption. While it isn’t necessarily one or the other, the current state reminds me of Beta vs VHS. With one being RVN born assets / NFTs and the other being ETH based NFT’s. Currently the latter is a much more ‘popular’ method. The largest NFT platforms, such as OpenSea are ETH based, and that is unfortunate. This ties us back to drawback 1.
RVN was designed with NFT’s in mind long before NFT’s hit their social boom in 2021. NFTs on the Ravencoin network are a core purpose, not a side gig job. Their security and the way they can house sub assets makes them extremely attractive. More on the details on how RVN NFTs compare to ETH based NFTs in a later post, but please read the RVN Whitepaper for more info. So while we believe the technology behind RVN NTF’s are superior, it currently sits on the drawback side of our ledger because of the social adoption. The project needs to make gains on getting noticed for what it can do, and it is a battle that hasn’t gone well yet.
Love RVN and Want to Help?
So you’ve read through all our thoughts on Ravencoin Tokenomics and want to know what you can do to help. Well, first and foremost, if you are a blockchain developer, RVN is a great place to bring your talents. If you are a crypto miner, RVN offers a lot of Tokenomic growth potential to make it well worth your while. If you are computer savvy, you can start a RVN node. And if you are none of the above (which is the majority of us), you could be of the most help. The more you use RVN, the more you even talk about RVN, the more you can impact RVN. It doesn’t take a tech wizard to help market the project. In fact, that is one of the more exciting things about RVN. It is in a place where the social boom effect on price hasn’t happened yet. It has been increasing mainly on fundamentals. So your participation can have immense impacts even at the most granular of levels.
I know this has been a long article, and we haven’t even touched on all the great things about Ravencoin. What I really wanted to do was take a deep dive and see where RVN could go over the next year or so.
Does it have the right catalysts for growth? Yes
Can the Ravencoin Tokenomics support the growth? Yes
Could RVN hit $1? Yes
Could RVN hit $5? Yes
Could RVN hit $10? Yes… eventually
Is RVN the best Crypto project around? That’s for you to decide. I can say the community is one of the best around, and I urge you to join them on Reddit and Telegram.
Want more? Have a comment? Want to contact us? Please join the list below!
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2 thoughts on “Ravencoin Tokenomics”
[…] Ravencoin Tokenomics […]
[…] much do we love Ravencoin? We wrote an article on it 3 months ago. Followers of our site are likely familiar with our thoughts on the project. […]