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Tokenizing Salaries and stock options – Considerations for compensating employees in cryptocurrencies



Tokenizing Salaries and stock option for compensating employees

If we were to live in a world driven by Artificial Intelligence run on Blockchain, we cannot rely on old methods of commerce. One of these is how compensating employees in advanced way.

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Binance compensating employeesBinance made news when they disclosed that 90% of their employees choose to get paid in BNB Tokens. There were many companies that disclosed that their employees were given a choice of receiving a portion of their salary in Cryptocurrency.

While 2018 was a letdown year in the cryptocurrency space, it has been an encouraging one for the Blockchain space in general. Many of the Fortune 500 companies have been exploring the use of Blockchain technology in their business.

In view of the potentiality that we may see employees getting paid in cryptocurrencies, we will look at various aspects related to tokenizing salaries.

In this article, we will discuss:  

  • Legality of virtual currency in your country
  • Does your country allow it?
  • Will you pay in tokens, coins or stable coins, and why it’s important to know?
  • Benefits of paying in Crypto
  • Pitfalls of paying in Crypto
  • Can you pay 100% in Cryptocurrency?
  • Legally written consents from employees
  • Volatility as a primary factor
  • Tokens in lieu of stock options
  • Lock-in considerations
  • Insider trading considerations
  • Sec 83(b) considerations
  • Signature considerations
  • Employee advance tax payment considerations
  • Valuation considerations
  • International workforce
  • Don’t forget the Tax withholdings

Legality of virtual currency in your country for compensating employees

Virtual currencyThe first question you need to answer before going Crypto compensation route is the legality of virtual currency in your jurisdiction.

For instance, China and India have not taken a friendly stance on crypto and it is a good bet that, at this time, these countries would not allow salaries paid in Crypto.

In the United States, you have to be careful about the minimum wage and State regulations requirements of the State in which you operate and whether that State particularly allows you to pay in cryptocurrencies.

Good References here:



Does your country ALLOW it?

crypto friendly countryJust because crypto is not banned or even encouraged in the fintech space in your country doesn’t automatically grant you rights to pay in crypto.  For instance, the basic compensation payout may be forced to be paid in ‘fiat’ currency.

Supplemental income like bonuses, allowances or stock options etc. may be allowed to be paid in whatever employer and employee agree on, including virtual currencies.

IRS Notice 14-21  clarified that virtual currency can be remitted for goods and/or services received, including wages.  However, both Federal and State regulations may need for a certain amount of income to be paid out in fiat currency to meet the federal, state and social tax withholding obligations since most of the States do not accept crypto tax payments.

Germany has opined that claim for salary remains outstanding if it is not settled in Euro, however, it doesn’t imply a prohibition on paying in crypto for benefits-in-kind (benefits that Employer chooses to pay but is not obligated by law).

Will you pay in tokens, coins or stable coins, and why it’s important to know?

pay stable coins compensating employees

Another good reference here:

Tokens can be further segmented into utility tokens and security tokens.  Paying compensation with utility tokens may not pose many complications (other than your compensating employees agreeing to receive them in-lieu of compensation), however, paying in security tokens will need to be in line with stock option rules, including statutory income tax withholding implementation (which still happens in traditional fiat).

When you pay out in coins, the fair market value as of the date/time of the payout is captured for compensation reporting purposes.

Stable coins probably might become a staple thing in the crypto space since they fit both the notion of ‘crypto’ and guarantee of ‘fiat’.

How the accounting, payroll, tax withholding, and payout structure works really depends on what you offer to your employees.

Obviously, there is ample room for interpretation since most Government agencies around the world, including the United States, have not provided clear guidance around token salaries or other forms of crypto transactions.

Benefits of paying in Crypto

advantages of crypto

Why talk about paying in Crypto unless they provide certain benefits?

Here are some:

  • Increases employee engagement: when you know the value of your tokens (similar to stock options) depends on the success of your company


  • Increases employee retention: the tech industry faces one of the worst retention rates, having conditional vesting of crypto (in the format of stock options) helps retain employees for the long run
  • Global demand: Unlike stocks, you are not restricted to just one geographic location – you can sell your crypto on exchanges that trade and have a global market place. Of course, this global demand is true for successful projects
  • Long-term compatibility: Bitcoin went from $1800 in Mid 2017 to $19000 by the end of 2017 and settled around $4000 by end of 2018.  If you were to just look at year on year trajectory – Bitcoin has done marvelously well than any other asset class, however, imagine getting paid in Bitcoin when it was $19,000 and sitting on it today when it’s only worth $4,000.  That kind of massive volatile risk is not an issue with fiat incentives or traditional stock options.  If you tie company tokens as an incentive – it could encourage employees to stick around longer and work harder.

Pitfalls of paying in Crypto

Disadvantages of crypto

It’s not all rosy and dandy – there are some pitfalls of paying in crypto:

  • Freefall Crypto can fall to a value of zero.  Many projects since their inception have. For this reason, employees may not want to be paid in a currency that may one day have no value
  • Lack of regulatory guidance: Recent SEC actions have put crypto space in a panic state. No one knows what type of action SEC is going to take against Crypto companies and how that impacts the value
  • No protection: Federal Trade Commission has been warning people about the volatility issues with transacting in Bitcoins, FTC has even warned that there is no government protection available to people dealing in cryptocurrencies that are otherwise available to traditional financial instruments.

Can you pay 100% in Cryptocurrency?

As we discussed earlier, and it bears repetition, many jurisdictions have restrictions on how the base pay is paid.  This restriction makes sense in the current economic model since most Government, especially National agencies, have not come to accept cryptocurrencies as legal tender.

The answer for most jurisdictions is that – you cannot pay 100% in cryptocurrency.  Even for most progressive companies and employees – this restriction acts as an anchor to the old fiat system.

Legally written consents from employees

As progressive and accommodating as your employees may be – it is very important to have written confirmation that your employees have agreed to receive their bonuses and supplemental wages in cryptocurrency (whether it is your own company tied crypto or crypto from the market).

Having written consents that disclose the risks of accepting cryptocurrency in the current financial system and possibility of them losing all of their value and point about them being issued at fair market value at a certain date are all important aspects you want to include in the letter, will help you any legal proceedings down the line.

Volatility as a primary factor

crypto volatility

If you ask HODLers – they will tell you that ‘Volatility is the worst thing’, while day-traders may say volatility is the only reason they are in Crypto space.

Employees are different than HODLers and traders – they have other tasks to do – like making your project successful.  When thinking to issue tokens in lieu of compensation consider incorporating some kind of safety threshold so that employees are not always worried about the market, that takes their focus away from the project.

This safety threshold might include – locking some value of crypto in stable coins or having collateral in fiat, or tying physical assets (like real estate) to the tokens issued, etc.

Tokens in lieu of stock options

crypto and stocks

We expect 2019 to be the year when Security Tokens (STOs) will become popular.  STOs will mark a massive shift in the financial market and how capital is accessed.  When the rules become clearer – companies working in the crypto space can legitimately use ‘crypto’ instead of traditional securities.

For now, based on what we know to apply for the traditional stock options, here are a few considerations you must think about when paying stock options in crypto: 

  • Lock-in considerations
    • How long does it take for the restrictions to pass? Is it too soon or too taxing?
  • Insider trading considerations
    • Being so integral within the company – will you run into insider trading issues down the line? Will tying employees with crypto backfire when an insider trading news breaks out?  What countermeasures do you have in place to save the brand/company?
  • Sec 83(b) considerations
    • Will employees have the option to elect 83(b) election? Many industry experts weigh in that restricted tokens should fall within the purview of 83(b) that help taxpayers make the election to get taxed on grant instead of at vesting.  The clock for capital gains treatment then starts on Grant date.  This is a positive thing for the company because the employee is betting on an increase in company and its tokens worth.

From employees standpoint – this is a risky deal especially if the said tokens fall in value – the taxes paid ahead on ‘fair market value’ will not be recoverable.

  • Signature considerations
    • How are you collecting signatures when (and if) you end up issuing security tokens with restrictions? What framework do you have to issue security tokens and have employees provide their consent to the vesting schedule and restrictions?
  • Employee advance tax payment considerations
    • All of our discussion assumes that employees are willing and able to pay taxes in regular fiat while receiving stocks in tokens. Even if employees want to sell some of the crypto tokens to pay for taxes – there may or may not be market to trade for specific tokens. In such a situation – how are employees going to accommodate tax payments?

Valuation/liquidity considerations

2018 crash of crypto market is a stark reminder for all of us as to how things can turn.  Many projects were wiped out of the crypto world due to liquidity issues.  What happens if your company faces such a crisis and there is no one to buy the tokens?  How then are these employees going to be made good?  Is there a buy-back program? If so, will the company be able to sustain such plan and still thrive in business?

International workforce

crypto adoption

Companies like Bitwage and SalPay are accommodating paying in crypto and seamlessly convert them into fiat (or other cryptos) on the receiver’s side, no matter where the receiver lives.  They boast the ability to comply with the payroll regulations in many jurisdictions.

Of course, there is the cost of service, but if successful, the cost may be minuscule compared to the benefits.

International wage settlement will become much simplified when cryptocurrencies are used, as they are valued/accessible/deliverable globally.

US dollar will not be the same in India but Bitcoin is a Bitcoin no matter which part of the world you live in.  While we are still working on adoption – once crypto is accepted in more locations – these international pay settlements in crypto could become THE norm.

Don’t forget the Tax withholdings

As an employer, you are required to withhold taxes on ALL income paid to employees.  This means – both employer and employee tax remittances have to be made in national fiat currency.  Do you have a plan and reserves to meet these withholding requirements in fiat while you deliver some of the compensation items in crypto?

Conclusion: Bringing it all together

As you can see, a simple idea of compensating employees in cryptocurrency carries with it a staple of complex payroll, tax and compensation considerations that need to be addressed with professional help.  Ask all the questions ahead of time and not after hitting a regulatory wall.

It is possible to pay in crypto, as long as the all legal and regulatory aspects are addressed.

All of these complications will be eventually addressed in the crypto space and we will see companies joining forces in paying employees in tokens, whether its utility tokens or security tokens.

Thank you for reading this article.


Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

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About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.


Chasing the Micro Cap Crypto Gems #4 – Skrumble Protocol – Why We Changed Our View On This?



Micro Cap crypto Gems

The tricky thing about finding micro-cap gems is that we have to find something that fits our crypto framework criteria and still be under $10 Million in the market cap.   

The project that we picked today had a few flags while we were researching and we promptly reached out to the team to clarify.   

You will see our initial views/opinions based on publicly available information and the response from the company.

What is Skrumble Network?

What is Skrumble NetworkThe core concept behind Skrumble Network is that when data is stored in one centralized location (like a Server) it poses the greatest security when it gets hacked.

However, if your data is fragmented and stored on decentralized servers, even that particular decentralized server gets hacked, your data is still secured because the fragmented piece that got hacked is usually incomprehensible.

Skrumble Network helps decentralize the communication protocol by using Blockchain technology.

Skrumble Network helps facilitate File transfers, secure messaging, Video streaming and calling.

how Skrumble network works

Whitepaper describes: “Skrumble Network is a secure, communication-centric blockchain, decentralized communication application and a communication layer for developers to add into any application. With no middle entity or centralized server host in between to censor, block or manipulate any data, Skrumble Network will enable open, global private communication and transactions that are truly community owned and operated.”

One of the distinguishing factors about this project was that it was initially developed with an established company behind this crypto that has been in the business for more than half-a-decade and they know how to deliver a product that is used in the real business world.

Applying our framework

As is our custom, let’s apply the CryptoTapas framework around this project.


The security around our communications is as old of an issue as the internet itself.

This concern has become more pronounced in the recent years with the news of hacks and breach of confidentiality, and utter disregard for privacy.

Now that COVID has completely changed the way we work (especially working from home), the security around communications is now taking the spotlight again.

If Skrumble Network addresses this issue in a novel, scalable and easy to implement way – it might have a great chance at this massive problem.


Eric Lifson seems to be working on Skrumble Network for over 3 years now, and he was quite accommodative when we reached out to him with questions. 

When we looked at the team page on the Skrumble’s website, with the exception of three members, everyone who is listed on their team’s page is no longer with the company (some since July 2019) and this disappoints us that they have not updated their own team’s profile.

Skrumble Network team

More importantly, if everyone jumped the ship, who is behind the project now?

The flagship app on Skrumble Protocol, GetAlly, shows the team members that are also associated with Skrumble Protocol, however, most of these team members are no longer with Skrumble.

Question for Skrumble Team: Who is working on this project? What is the current team structure?  

[Update: The project informed us that all these people have at one point worked on the project. While the team has downsized to a team of about 6 core people, SKM has a strong brand and past and present members prefer to maintain recognition of their achievements. Moreover, several are still contributing, just not on a full-time basis. Any who do not, the team offers to remove them at any time. This is now more in line with how ongoing DAOs (Decentralized Autonomous Organizations) seem to be operating.]


Skrumble Network’s Ally dApp claims to have a 150K user base.  They also teased about the upcoming partnership to take the DeFi initiative forward.

We actually like the advisor profile associated with the Skrumble Network project one of whom is Anthony Di Iorio, co-founder of Ethereum.

Apart from Anthony, Skrumble has Jeff Pulver who is the co-founder of $3 Billion communication company, Vonage.

That is quite a respectable name association with Skrumble.

Question for Skrumble team: Have there been any changes in the Advisor group (similar to team changes?).

[Update: No. We also still Jin Tu – former CTO of Aion, OAN boardmember and Cofounder of Axis DeFi, who is an Expert Blockchain Architect. 

Redouane Elkamhi,
PhD, Associate Professor at Rotman
Leader in Fintech & Blockchain at the University of Toronto 

Kevin Hsu,
Founder Partner at BlockVC
Investor in Ontology, RSK & QTUM 

Jiangang Wu, PhD
Co-Founder of Fusion
Professor of Finance & Blockchain Economics at Shanghai University] 

Addressable market size

Secured communications, whether it is simple file sharing service or video streaming or chatting is a huge market.

It has only exploded in value in the past few months when people were forced to communicate over the internet instead of in-person meetings.

This trend will only become the norm as the internet becomes more accessible (Elon’s Starlink reality) and companies start restricting travel.

File transfers, messaging, video streaming and calling verticals market size is in $100s of Billions, if not trillions.

Revenue model

Question for Skrumble team: How does Skrumble Network generate revenue?

[Update: The core problem for SKM has actually been the volatility of the utility token model in general. We will address this in more detail later.]

DeFi + Communication?

Skrumble Network’s official blog was silent since October of 2019, although remained very active on Telegram, and resurfaced with an announcement that Skrumble Network is going DeFi. 

The announcement about a partnership with Juggernaut reads “unique custom financial modelling and DeFi deployment, it can enable token projects to have real, sustainable, and modular business models built around their utility model.”

Is this another attempt to exploit the market craze around DeFi?

We asked the team this question directly.

Skrumble Network Roadmap

Question for Skrumble Network Team: What drove this decision to look at DeFi and what unique attributes do you think will help Skrumble succeed in this space? 

How does this Juggernaut help Skrumble’s vision?

[Update: Really, we see two sustainable business models so far in the space – 

  1.     platform tokens (for exchanges) with only room for a few like Huobi or Binance
  2.     DeFi due to the collective staking, lockup and general collateralization of new directions and ability to focus on new industries.

A two-token solution is the only way to do something meaningful and sustainable in my opinion with a utility token. One for utility and one for profit sharing. They are missing the sustainable business model. They don’t have enough usage to reach a critical mass and the DeFi synthetic at least has a chance to have something closer a traditional ‘share’ balanced approach. 

Most proof of stake with inflation models will reach a point where one has to ask where any utility token can be able to sustain beyond initial interest 

This is why we must change the game. 

Basing anything on a pure utility token that fluctuates is basically unsustainable. This is because when people are in the money they just leave to the next hot project. People who operate in DAOs want something more stable to base their livelihoods on. They want something closer to USD that can be more stable and scalable. 

This is an overview of how we see DeFi becoming a crucial component going forward:https://medium.com/juggernaut-defi/skm-partners-with-jgn-to-develop-first-defi-communication-network-20ba9a3ccf38 

What do we like about Skrumble?

We like the fact that Skrumble Technologies has been a technology company since 2014 and it has leveraged some technology and strategic guidance from them in their initial inception.  It has real business with actual clients in the market.  How many of the 6500 cryptos can claim that? 

Additionally, the company has patents to its name and helps them deploy proprietary solutions in the market. 

In addition, we like that the co-founder is quite active in working on building Skrumble Network up. 

You can go to the Telegram and see him responding to the questions posed by the community. 

When we reached out to Eric, he provided a quick ‘highlight’ of Skrumble for someone who is new to the project, we have reproduced what Eric shared with us below (we have not independently verified this information): 

Skrumble Network is reshaping freedom of speech and data privacy with a communication-centric blockchain due to our unique PoA architecture, formidable global community, robust proprietary chain, accomplished advisors, and top-tier exchanges. 

🤝PoA consensus model: Aligning incentives and encouraging active community participation

💪Innovative chain and base layer: Enabling other dApps to be built on top of Skrumble Network. First dApp- Ally already has 150k+ users with more coming soon

🙋🏻‍♂️Industry-leading advisors: Including Anthony Di Iorio (Co-Founder of Ethereum) and Jeff Pulver (Co-Founder of $3B Vonage), Jin Tu (CTO of Aion), Redouane Elkamhi, PhD (Lead of Fintech & Blockchain at the University of Toronto), Kevin Hsu (Partner, BlockVC)

🥇Trusted and premier exchanges. Won Huobi FastTrack vote last week with over 40 million votes. Counting Gate.io, Huobi Global, Bittrex, LBank, Coinbene etc as our exchange partners

🎖Ranked by ICO Drops for both top 5 global community and ROI in Q22018

🗳Won Huobi FastTrack with 40M+ votes on June 27 19

👑Massive dApp ecosystem coming soon with innovative token economic details

🦁DeFi component / partnership incoming 

Things to consider

Apart from the general risk that is inherent with the crypto space, consider the following when you DYOR on Skrumble Network. 


Few blockchain/crypto companies have tried to take a stab at the ‘secured communication’ aspect using blockchain. 

We have not yet heard the great success story in this space. 

This is good news and not so at the same time. 

It is good news because Skrumble Network could be THE project that penetrates the ‘success resistance’ in space. 

It is not so good news because the same reasons that lead to the failure of previous projects could plague Skrumble Network. 

Team changes

Exodus of team members from the Skrumble Network is a point of concern for us.  We are going to update this section with the response from the Skrumble Network team (without removing this concern from here). [Update: It seems that several are still involved in a part time basis, and they claim to have streamlined their operation. They are also actively working with the Juggernaut (JGN) team to implement the DeFi rewards system. For more details on JGN please see here: https://jgndefi.com/ 

Token supply

While the market cap is what matters the most in terms of the potential multiples, crypto space seems to be very touchy about the token supply. 

Token supply on Skrumble Network (SKM) is 1.5 Billion and might be looked at as quite high.

All tokens have been released to the market. In this space, the actual token supply amounts are becoming far less important. This was a pretty standard number in 2018 and was advised to the team. 

Team is expected to release more token utility and use cases as per the information alluded to by Eric and depending on the future use cases the market might respond positively. 

Moving to a more stable way of incentivizing operators may innovate the DeFI space beyond pure finance and into other industries as we rediscover how we share and perceive value. 

This is an overview of how we see DeFi becoming a crucial component going forward: https://medium.com/juggernaut-defi/skm-partners-with-jgn-to-develop-first-defi-communication-network-20ba9a3ccf38   


Our first impression is that Skrumble Network looks like a project with a lot of potential.  However, potential means nothing until it is ‘realized’. 

Will Skrumble Network realize its potential?  We do not know and that is the dilemma we have to ‘risk’ when dealing with micro-cap gems.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

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Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.


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5 questions we want XRP army to answer!



xrp investing news

What follows is our opinion.  

Let’s not be hostile.  

Top 5 Cryptocurrencies 2020

We are simply posing some questions based on the information we came across and our own limited interpretation. 

It is quite possible that the sources we are referring to are at fault or our interpretation is. Either way, just answer these questions for us so that we can learn new things about XRP that we did not know.

Our readers know that we have been anti-XRP for a long time. We got trolled, mocked and called ignorant. Well, to each their own.

Our questions to the entire XRP army are simple, here they are:

Question 1: If crypto was to replace (or at least reshape) the entire banking business then what does a token whose sole business model is based on ‘accommodating’ banks have any future?

To put differently, when the world starts conducting commerce via text messages why do we need banks and Ripple which wants to serve banks?

Our basis for this question: 

In the future when we will start doing business with each other over text messages, wallets and email signatures, why do we need a payment gateway from Ripple?

We know that WeChat payment enables users to transact over chat.  Other companies are trying to catch up with this (primarily why Facebook was looking at creating its own currency, Libra).

However, once we have a digital dollar, we do not even need an outside stablecoin since one could, in theory, use the digital dollar directly.                  

Question 2: Why do you have to pay businesses to use XRP if it is so superior?

Our basis for this question: 

Financial Times reported that Ripple paid Moneygram to use Ripple technology.

Here is a direct quote:

It turns out Ripple has been paying a significant amount of subsidies cash to MoneyGram’s business since buying into the company in June. In the third and fourth quarter alone the Ripple benefits amounted to $11.3m.

What’s more, until a consultation with the SEC**, MoneyGram had been more than happy to book these cash flows as revenues. Due to the SEC guidance, however, it has now had to restate fourth-quarter guidance to account for Ripple payments as “contra expenses”.

XRP Twitter

Question 3: What is Ripple’s revenue worth without the ‘selling’ XRP?

Our basis for this question: 

The question seems to be answered by the XRP’s CEO himself. Here is an excerpt:

Asked if XRP was keeping everything cash flow positive at Ripple Labs, Mr Garlinghouse answered: “Well XRP is one source. I don’t know how to answer that because if you took away our software revenues, that would make us less profitable. If you took away all our XRP, that makes us less profitable. So I don’t think about it as one thing.” 

He clarified later: “We would not be profitable or cash flow positive [without selling XRP], I think I’ve said that. We have now.”

In our opinion, we think that the only reason Ripple (XRP) is even operational is because of the billions upon billions of XRP tokens that they keep dumping on the unassuming investors.  

Is this a wrong assumption?

Question 4: If Ripple does not need XRP, why is XRP needed?

Our basis for this question: 

This is based on our understanding that Ripple’s technology can be used by the businesses without having to use XRP.  It is recommended but not ‘required’.

Is this accurate?

Ripple’s solutions can work without XRP (its native token).  So, if XRP is not a utility token in strict sense, how are its creators able to mint and sell them at will without tripping any security laws?

Question 5: If Ripple [XRP] is to act as the ‘stable’ value while the transactions take place on Ripple network, why should anyone trust XRP which is backed by nothing instead of stablecoins like USDC that are backed by real world assets?

Our basis for this question: 

We would personally trust USDC more or even Facebook’s Libra rather than XRP which is backed by nada.

This is what Demelza’s opinion was during our interview:

“The main point is that if XRP were able to back their currency with financial assets and stabilize the purchasing power of the currency, then that would mean XRP coins should have no price appreciation. In fact, only the equity shares of Ripple Labs would profit from XRP’s adoption as a global reserve currency. But Ripple Labs is a privately held company. After fully understanding what XRP is, one realizes that XRP’s investment pitch does not make sense at all.”


We are trying to convince ourselves as to why we need Ripple in the crypto space if:

  • Future of payments is going to be ‘self-bank’ & over the chat
  • There are better stablecoins in the market 
  • Ripple itself as a technology doesn’t need its own native token, XRP

For this very reason, our opinion is that the money will flow out of XRP and the creators will keep dumping their bags into the market until the market can no longer absorb it and then it will be ‘lights out’.

We await for the XRP army to provide us insights that we did not know and our opinion changes…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

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Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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DeFi is Not the Holy Grail of Crypto, Here is Why



Defi Yfi

DeFi has been making millionaires overnight and turning millionaires broke at the same speed.

Those who are on the bandwagon are rejoicing and those who either missed out or got burned by one of the fake projects are yelling ‘Scam’ at DeFi.

Top 5 Cryptocurrencies 2020

Our views are a bit different on the subject.

We do think DeFi is going to be a successful vertical among the blockchain (and crypto) solutions.

It will not be THE holy grail for the redemption of crypto status though.

Supply Chain, Crypto Lending, Insurance, Financial Services, Accounting, Identity, and many more verticals will collectively take blockchain and crypto to the masses.

Shifting our focus back on DeFi, here are some of our thoughts on the current state of DeFi. We do appreciate you dropping any insights you have that we might have missed.

DeFi is not a ponzi, here is why

If the DeFi project you are eyeing meets the following conditions, it is not a ponzi:

  • Audited code: Is the code on which DeFi runs is audited by reputable blockchain auditors? 
  • Reliable team: Who is behind the project? Do they have the know-how? Do they have a history of running scams or leading successful projects? 
  • Actual (sustainable) revenue model: What is the revenue model?  Is it too ‘scammy’ sounding or is it based on sound mathematical (and algorithmic) models?
  • No lock-in periods: Is it easy to get in and out of the platform without any restrictions or lock-in periods?

If you answered yes to ALL of these questions then there is a 100% certainty that the DeFi you are dealing with is not a ponzi (or scam).

However, a caveat is due here.  

Just because the project is not a ponzi doesn’t guarantee its success. Lot of well intentioned companies fail, that’s just the nature of business.

So, do not be one of those guys who sells their home to invest in crypto or DeFi (and that itself is not advice, just an opinion).

If you don’t want to hear it from us, listen to what Yearn Finance creator has to say about DeFi tokens (not all, obviously) having ZERO value.

Source: Crypto Culture

DeFi on Ethereum is not sustainable, here is why

Ethereum DefiMost, if not all, DeFi projects that are making the news today are on Ethereum. 

Ethereum is not a reliable blockchain when it is overloaded.  It gets choked and crashes.  

People are already complaining about exorbitant fees on the network due to the DeFi craze.  

DeFi itself as a crypto vertical is quite new and we are sure there are going to be a lot of ‘killer apps’ that will show up on the scene.

We are currently looking at the DeFi solutions that are being built on other blockchain networks (subscribe for free to know when we post that article).

PolkaDOT is not the end all be all, here is why

Polkadot Defi EcosystemMany are turning to the DOT as the next big thing after Ethereum.

It may very well be.

However, it has not had the chance to prove itself, not yet.

Ethereum’s resilience (or lack thereof) was revealed only during the ICO craze (and then later during CryptoKitties debacle).

What monsters lie in the DOT’s belly?  We don’t know and we would be weary of anyone who claims to know with certainty.

Other things to consider

Entire DeFi space is pretty new and we do not know what we do not know about potential vulnerabilities.

While this is true of Bitcoin itself, Bitcoin has withstood assault for over a decade and still stands stronger.  

Same cannot be said about DeFi.  

Can you imagine someone investing their life-savings into DeFi only to have funds taken because of a bug in the code?

Needless to say, many folks are exploiting the looping system in the DeFi where they take loan against their deposit then lend it back to the platform to take another loan against their deposit, and ad infinitum.

This is causing the DeFi systems to show more liquidity than what truly is.


We think DeFi is an exciting development, however, we still put it alongside ICO craziness for now.

When this space matures and we see reliable solutions emerge – DeFi has the potential to drive a trillion dollar vertical on its own.  

That is just the potential, all the trials and tribulations that we have to go through to get there is going to be one hell of a ride.  

So buckle up and enjoy (and please do not lose your shirts on the ride)!

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

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