Nivaura is a brand-new tech startup focused primarily around the blockchain. It’s first bond has been denominated in Ether as well.
What is Nivaura?
The company has been developed under the overwatch of Britain’s Financial Conduct Authority or FCA. It’s the first type of business like it’s kind, the platform instrument was released by the London based luxury retail startup LuxDeco. And it was created with the help of some of the top project leaders in the industry in order to give the company a fresh start and way to collect capital for the short-term demand they need.
How Does Nivaura Work?
The thing about the company that has truly disrupted the industry isn’t it’s use of cryptocurrency. Instead it’s the massive bond is going to be cleared, settled and eventually registered on a public Ehtereum blockchain ledger.
There is an extremely short cycle of one week, and the bond is said to be part of a larger project they are experimenting with for removing midlevel financial entities. Removing the middle man is going to make the platform much more accessible for smaller businesses looking to grow their organization.
“As an entrepreneurial business we are always looking at ways to gain advantage and scale,” stated the CEO and founder of LuxDeco, Jonathan Holmes, during an interview with CoinDesk. “So, if cryptocurrency becomes a valid funding and trading option we would definitely look at issuing further bonds in the future.”
And, private blockchains have mostly been used by CSDs as well as other providers of legacy infrastructure companies who provide services. The founder of the venture backed Nivaura, and CEO Avtar Sehra said in an augmentative fashion that new bonds show the potential for blockchains used publicly to take off with business models of an enterprise type nature.
Sehra also stated:
“What we’re showing is that you can use the public infrastructure for regulated financial instruments, and this is a very critical step, because from the earliest stages we’ve always believed that public blockchains are the way forward.”
The company is using big name input too apparently. And to ensure the bond is aligned with Ethereum and already operating projects, a number of outside parties have been involved in the creation of the platform.
Also, the company is a part of JP Morgan’s in-residence program. And they’ve taken a lot of help and advice on the development of automating bookbuilding processes that would typically be distributed among several different financial apparatuses.
Another benefit they have, is getting help from the trusted law firm of Alen & Overy Nivaura, who has given them help structuring and constructing the company so that it’s legally compliant with documentation in for making work with Ethereum automatic as well as the very structure of the bond itself.
This in turn of sequence, caused the credit rating firm of Moody’s to be priced through the use of data that generated high yield curves, and also factored in the volatility of the Ethereum token when creating the bond.
This is especially true when there a control experiment has been paid 2.5% interest annually, and the bond with Ethereum is said to give annual interest at ten percent or so in order to push the offset of a possible risk while using cryptocurrencies that are naturally prone to quick price changes.
The Ether coin that was used to buy the bond was sent to a public address known as the Nivaura Client ETH Account. And to help finish the process, any investors had to confirm the account in which they needed to receive the principal interest when the bond was finally mature in November of 2017.
Sehra then said, “A Blockchain can’t do that.”
The Ethereum bond was issued and was one of the last of a two-piece experimental project intended to prove publicly how blockchains worked when on a public ledger. The experiment showed that the process was more of a manual nature and it made for more difficulty when creating smart contracts as well.
The bond that was created as part of another regulation setup by the FCA that gave partners reassurance they wouldn’t be violating any industry controls of any nature. Even though the platform has gone through some difficulties, especially when speaking of earlier work – users still have been able to mostly operate self-sufficiently. And through the use of private keys, have been able to make it through the process of getting onboard with Nivaura’s platform.
The main difference now is in relation to the tests that have been conducted. And instead of depositing any cryptocurrency directly onto a blockchain, as is normal with Ethereum, they’ve been deposited to Nivaura’s Client Money Account.
A recent document also declared the following about this;
“This meant that the ownership of money on the blockchain could not be considered as the independent source of truth because of truth due to the dependency on, and management of, the funds help in a client money account.
With a lot of lessons learned from all of their experiments that went live, Nivaura and LuxDeco, have created a roadmap for several more implementations in the future. LuxDeco has also said that they he noticed Nivaura first when responding to the worldwide customer base who needed to pay for their goods with either bitcoin or ehtereum. Also, that if any bond matures without any problems happening, that’s the next goal the firm would like to take.
“If we eventually start accepting payments in cryptocurrency, which we think will come, there is potentially a natural case for funding our working capital cycles through this means too,” he said.
As for the company Nivaura, Sehra is well aware of the fact that there are other bond issuers as well, specifically – Daimler, Fisco and Overstock. And that each of these companies have already used cryptocurrency as part of their processing power. Also, that each of those companies operated in derivatives, as well as make their own progress, he expects to see that trend spread.