A Melbourne-based payments startup is raising $74 million through an initial coin offering (ICO) to become the “holy grail” of the cryptocurrency space, and has already locked in tens of millions in pre-sale amounts.
Difficulty of use, constant volatility, and lack of widespread adoption have long been cryptocurrency’s crutch, but the founders of Liven are proposing a fix to all three problems through their platform’s new crypto integration.
Founded in 2014 as a restaurant deals focused startup, Liven allows users to shop at a number of participating retailers and through the Liven app, which then rewards them with 15-25% of their bill as a cashback. This can then be used for future purchases or charitable donations. The startup has over 180,000 users, 700 businesses signed on the platform, and last year raised $10 million in venture capital.
It’s the integral cashback feature of the Liven platform that inspired founders Grace and William Wong and David Ballerini to start cooking up the idea for a blockchain and crypto integration, with the founders telling StartupSmart they began to realise the company was the “perfect use case” for blockchain and cryptocurrency adoption.
The company intends to sell 1.75 billion LivenCoin tokens through its ICO and pre-sales, with those tokens then being able to be redeemed for products at participating retailers, which include Melbourne institutions such as Nene Chicken and 8Bit Burgers.
While users will have to agree to receiving LivenCoins as part of their cashback rewards, businesses signed onto Liven’s platform can embrace the crypto aspect of the business as much or as little as they want, a feature William Wong says was key to driving further adoption.
“The businesses don’t need to switch over anything, they won’t even realise cryptocurrency is in play, and that’s a key factor that allows us to use this with no resistance and no complication,” he says.
The founders explain the LivenCoin tokens as being “pegged to bricks-and-mortar businesses”, which serves as a way to reduce volatility in the cryptocurrency’s ecosystem. In reality, they explain the commission fees paid by the merchants are used to cover the liabilities of the system, and the tokens have an intrinsic value in fiat currency deduced by a mathematical formula.
“Every token that circulates has an intrinsic value at any given moment. So this means that users know that at any given moment, for example, 10 liven tokens can get you a $3 coffee,” William says.
“This allows us to peg the value of tokens and achieve acceptance and liquidity.”
But the cryptocurrency aspect isn’t the only reason for the blockchain implementation, with Liven also having a longstanding feature where users can donate their excess Liven cash to charities. For this, throwing blockchain into the mix opens up new doors for donation transparency and visibility.
“We’re hoping this means more people will donate, as it’s not that people aren’t charitable, but they often just don’t know where their money is going. This will let them see exactly where the money’s spent, how it’s spent, and without the middlemen,” Grace says.
The “holy grail” of cryptocurrency adoption
Although Liven’s private pre-sale officially opens on April 15, the founders have confirmed they have already raised tens of millions via earlier pre-sale contributions, interest for which has been “crazy”, says William. In total, the team wants to raise 100,000 ether, the currency of the Ethereum blockchain, which at the time of publication equates to around $74 million.
This would knock out stablecoin startup Havven from the position of having completed Australia’s largest ICO, something the founders are all confident in achieving thanks to Liven’s well-established ecosystem and thriving business model.
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“There are 1500 cryptocurrencies out there and hardly any of them have any substance to them. There are some great protocol-backed coins, but apart from those, there’s rarely many that an everyday user can relate to,” William says
“When we were pitching this to private investors, they said it totally made sense for Liven to make this implementation.”
Investors in the cryptocurrency space have long been on the hunt for projects that are more than just a whitepaper, and Liven hopes to provide well beyond that. The allure is also there for more than just “crypto nerds”, Grace says, with the platform wanting to drive mass adoption of cryptocurrencies and place them into the mainstream.
“At a conference, someone called it the holy grail of cryptocurrency, opening a pathway to cryptocurrency mass adoption. That’s something that hasn’t been achieved in the last 10 years,” William says.
The team has a number of high-profile advisors on board, but are yet to name names. Expressions of interest for the pre-sale are currently open, but as for further marketing, the founders aren’t too stressed.
“We don’t need a lot of marketing, as three-and-a-half years of existence as a successful company is a great amount of marketing in itself,” Grace says.