April 23, 2018 (5 weeks ago)

Money management for Debitum Network

Cryptocurrencies have potential to revolutionize the financial world. However, they are still in their infancy, so market turbulence happens, because countries and companies are still trying to find the correct way to adopt them into their financial ecosystem. An additional destabilizing factor in the cryptocurrency market is the number of market participants, never has financial trading been so accessible to everyone.

Debitum Network is connected to this market, and we strongly believe in having clear principles in-house to help us guide the business.

Priority of operational needs

We believe in the value that cryptocurrencies and smart contracts bring to the global economy. However, we have to focus on creating value by building Debitum Network rather than trading cryptocurrencies or other assets.

We believe it is worse for Debitum Network project to see ETH price sharply drop decreasing collected funds value from 10M to 3M USD, rather than not seeing collected funds raise in value from 10M to 20M USD due to ETH price increase.” February 19, 2018.

We have collected a significant amount and secured a long runway

20,000 ETH are worth 10,200,000 USD at the time of writing (~510 USD/ETH), which at our current estimates allows us to finance at least three years of operations, including expansive growth.
This means a need for fiat currency to get us through the first year, and the rest of the funds (at least two-thirds) will not be needed at least for a year. These funds should be invested or at a minimum kept safe from losing its value due to market fluctuations.*

Money must work

The main goal of any company is to employ assets that it commands most effectively to achieve objectives. For Debitum Network it is to leverage Blockchain technology to secure and distribute fiat investments to the SME world.
For us to be able to focus on building the Debitum Network, it is important that the assets do not lose value over time. Thus we will be looking for the best form to keep the assets in whether its fiat, crypto or investments.

War chest

We are closing our ETH position, but we will keep an eye on the crypto market, and we will keep a “war chest” of assets ready to come back once the market situation is right. As we have mentioned before a strong focus is set for retaining as much value in current assets as possible.

Diversification

The market of cryptocurrencies is quite volatile and consequently hard to predict. Our Debitum Token (DEB) is exposed to the general trends in the cryptocurrency world. We believe that our “operational” assets should be shielded from cryptocurrency market. To mitigate this, we are converting our operational assets into fiat.

We seek to employ our funds in multiple asset classes with varying volatility to provide ourselves with both an acceptable return and a safety cushion to keep our development and rollout operations running smoothly.

Fiat currency overview EUR vs. USD

Our office is currently in Lithuania. Therefore the majority of overhead costs for us are in EUR. However, possibilities to deposit EUR are quite limited (negative or 0% interest rates).

USD is the primary transaction currency worldwide in finance and the crypto-related world. Therefore a sizeable portion of assets in our Warchest would be held in USD to facilitate faster operations: either buying back ETH, other cryptocurrency or otherwise as needed for the growth of Debitum Network.

Foreseeable future of Debitum Network

Debitum Network upcoming milestones:
2018 Q2: Establishing Debitum Network in the first target country
2018 Q3: Testing and auditing Debitum Network 1.0 before the public launch
2018 Q4: Fully available eco-system platform
2019 – 2020: Stage 1 and Stage 2 country rollout

Due to the successful crowdsale, we have funds necessary to create the fundamental system and provide markets with affordable funding as for the first 15 countries within two years of live operations. We are growing sales and marketing teams for global expansion; our developers are busy working on the Debitum Network platform.

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