Caviar: Crypto And Real Estate In One Token

29 Nov 2017

 This is a sponsored guide and does not represent investment advice from CryptoCompare. Please do your due diligence when dealing with any Initial Coin Offering and never invest more than what you can afford to lose.

Cryptocurrency Challenge: Growth in Demand, Yet Also in Volatility

The explosive growth of cryptocurrency markets has drawn in some of the investment world’s biggest hedge fund managers. The majority of these funds offer their investors profit-sharing options and promise diversification by holding a portion of their assets in Bitcoins. However, in extremely volatile markets, monthly or quarterly profits are not guaranteed. Although Bitcoin is the least volatile and most liquid cryptocurrency today, it is still part of the same sector and is susceptible to volatility.

Solution: Caviar Offers Balanced Approach in a Single Token

In order to solve this and reduce the volatility that's inherent to cryptocurrency, Caviar created a dual-purpose token and crowdfunding platform that is investing in cryptocurrencies and also in the real estate market. The company’s mission is to provide token holders with a diversified, risk-adjusted, data-driven portfolio with exposure to cryptocurrencies and stable income-producing real estate. In order to maximize profits and minimize the risks, Caviar will be able to shift funds from crypto-markets to real estate and vice versa using advanced prediction methods.

How It Works: Crypto & Real Estate - Single Token

Crypto: The Tech Behind the Token

Caviar will be performing long-term cyclical investments in cryptocurrencies with over $100m in market cap, through strong theoretical analysis and technical analysis models based on a proprietary framework. The company will also be investing in new, high upside projects with “real world” enablement, payments and finance, blockchain platforms, privacy and other use-cases, using its proprietary Intelligent Predictive Model.

The Intelligent Predictive Model relies on historical data to derive linear equations. The derived linear equations are weighted by characteristic R values, and then combined with a suite of patented logical elements, in order to predict the growth of a cryptocurrency in comparison to that of Bitcoin (BTC).

A different model, The BTC/USD trend model, will take into account trends in the underlying cryptocurrency ecosystem by analyzing Bitcoin social signals and trends. Said model will then correlate these metrics to historical Bitcoin price fluctuations in order to model the underlying trend in the BTC/USD ratio. The model will employ artificial intelligence (AI) algorithms and machine learning simulations to forecast future trends.

Both models will be calculated independently of one another, and then used together to predict a cryptocurrency price in USD at a specified future date. The two models will then pull data automatically from public sources to instantly update the underlying algorithms and linear equations in order to make real-time judgments regarding increases or decreases in the cryptocurrency projected growth and/or risk.

According to the Caviar whitepaper:

“The model is fully automated and is designed to alert analysts when an asset held in a portfolio experiences a significant change in volatility, when a new asset appears online, or when an asset not currently held in a portfolio rises above a predetermined expected growth threshold. This real-time data collection and mining, working dynamically with an AI predictive scheme based on machine learning, allows for stronger predictive power and more effective asset allocation.”

Real Estate: Proven Model, Established Record & Expansive Network

A portion of Caviar’s assets will be used for lending to real estate entrepreneurs with the intentions of purchasing, improving and selling real estate assets. Caviar already has a powerful presence, business network and connections in the Northeastern US, spanning to the states of Connecticut, Massachusetts and New York, and will continue to build and expand this network regionally if necessary.

There were approximately 1,400 foreclosures in Connecticut in June 2017, slightly more than last year's 1,300, according to RealtyTrac, a real estate statistics service. This reality points to a robust market for Caviar partners, who are often involved in purchasing foreclosed or distressed property.

Caviar will continue to focus on lending for single and two-family homes in the Northeastern

The United States, with a total loan amount of less than $500,000, while also expanding to other areas in US and Europe. With this model and focus on properties in the lower to middle price range, a number of advantages exist: Properties in this price range sell faster and give higher cash re-lending results. Additionally, the risk profile is lower with a higher number of loans.

Caviar follows a rigid lending process when issuing debt to its borrowers. To determine each applicant’s ability to receive funding, the company follows strict criteria:

  • The borrower’s CScore must be above 800
  • The after rehab value under 75%
  • The loan to value ratio at purchase under 95%
  • Must have a favorable location and market condition

All real estate debt provided by Caviar is secured by a personal guarantee from the borrower(s)

as well as a first lien position against the real estate asset, as the whitepaper explains:

“In case of foreclosure, Caviar will repossess the real estate property, complete the construction needed to bring the project to market, list and sell the property. Unlike other lenders that only focus on the lending side of the business, Caviar has the in-house construction infrastructure to help both in underwriting the asset, and if needed, improving the asset. While some lenders end up foreclosing on bad debt and then selling the assets for pennies on the dollar, Caviar can use its in-house infrastructure to complete the deal and sell the asset for a profit. This further de-risks Caviar’s loan portfolio.”

Caviar (CAV) Token Sale

Caviar tokens will be issued through a smart contract, using the ERC20 protocol on the Ethereum blockchain. Quarterly profit sharing is guaranteed by a fully auditable smart contract.

Every quarter, a payment in the form of ETH will be made via a smart contract to all Caviar token holders, representing 75% of Caviar’s net quarterly profits after management fees and operating expenses are deducted. Additionally, 20% of net quarterly profits will be reinvested back into the pool for token value growth and 5% of net quarterly profits will be used to buy back and burn Caviar tokens to provide additional liquidity and increase token value.

A proprietary tool, named CAView, will provide an open and transparent portfolio audit and will guarantee honest and anonymous profit sharing and distribution.

The Caviar pre-sale will start on the 28th of November. The main sale is scheduled to start on the 12th of December, during which 85% of the total CAV supply will be sold to participants for a $0.10 starting price. To learn more about Caviar please visit the Website, Blog, Twitter or join the conversation in the Telegram channel.

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