The Rhea Initial Coin Offering aims to facilitate the establishment and operations of the Rhea platform. Through the Rhea ICO we are raising capital for the creation of one-of-a-kind hybrid market-cap weighted index combined with an options trading platform. The absolute hard cap is 50,000 ETH. The launch of the Rhea Platform and the Rhea token creation process will be organized through smart contracts running on Ethereum. Thus we accept Ether contributions only, allowing us to peg the price of each Rhea to Ether at 0.001. Rhea tokens will be distributed to the sale participants within 30 days after the end of the ICO period.
Capital Contribution Period
As previously mentioned, the Rhea token supply will be at most 50 million tokens, 85% of which will be offered in the ICO round. The remaining 15% will be used for providing liquidity services within the platform and long term reserve. In order to ensure fair dealing, any tokens that remain uncommitted during the offering period will be burned before the Rhea token distribution period. This will reduce the total supply of Rhea tokens while not affecting the amount that contributors will receive after the dissemination period.
The investment window will span over 4 weeks running from 2nd October – 30th October. The month of October will be divided into 5 different stages, which offer a fixed percentage discount from the final price in stage V of 0.001 Ether for each Rhea. If the ICO has not
attained 12.5% – the minimum amount of capital required to launch the platform – we reserve the right to issue an extension to the ICO at a later stage in order to reach tier I.
Each stage offers a 5% cumulative discount from the Stage V price, thus the accumulated discount from the final Rhea/ETH price during Stage I is 18.55% in cumulative terms. Table 4 below shows discount schedule and the Rhea exchange rate during each stage. The discount schedule aims to reward early adopters for their belief in the success of Rhea, while at the same time giving late discoverers the chance to participate if the ICO has not reached 100%.
ICO discount schedule:
|I||2 Oct – 4 Oct||0.0008145063||20%|
|II||5 Oct – 8 Oct||0. 0008573750||15%|
|III||9 Oct – 15 Oct||0. 0009025000||10%|
|IV||16 Oct -22 Oct||0. 0009500000||5%|
|V||23 Oct – 30 Oct||0. 0010000000||0%|
Rhea tokens will be distributed within 30 days after the end of the ICO period (after stage V). Each contributor’s Rhea tokens to receive are given by the formula below:
𝑅ℎ𝑒𝑎 𝑟𝑒𝑐𝑒𝑖𝑣𝑒𝑑 = 𝐸𝑇𝐻 𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑒𝑑 / 𝐸𝑇𝐻/𝑅𝐻𝐸𝐴 𝑠𝑡𝑎𝑔𝑒, where ETH contributed is the amount an investor has sent in the form of Ether and RHEA/ETH stage is the price depending on the stage. Rounding will be up to 10 decimals.
The focus of the ICO will be to sell 50 million Rhea tokens (RHT). Taking into account the discount schedule in table 4, if any contributions are made in any stage prior to stage V, the Ether we receive will be below 50,000. The progress bar in the website will show how many RHT have been sold.
The burn model
As explained above, failing to raise 100% of the required capital would result in the permanent reduction of the total supply of Rhea tokens. Having already defined the Rhea/ETH price per stage, the sought after capital and the maximum supply, it becomes easier to imagine how the burn model will function.
Simply put, contributors to the Rhea project will buy tokens at a pre-set price until 42.5 million RHT have been sold or the ICO ends – whichever happens first. If Tier VII were not reached, then the total supply of 50 million RHT would decline. The burn model will keep the distribution pro-rata to the individual contributions made. This way we avoid two issues: us having more than 15% of the total supply and giving contributors an abnormal amount of Rhea tokens.
The VII Tier System
The VII Tier System has the important task of linking the contributed Ether to our Milestone Map and the Dividend Incentive scheme. This system is the foundation by which we will build our platform and compensate token holders. The system will show two clear
- between contributed capital and platform operations
- between contributed capital and dividend incentive
The Milestone Map, the Dividend Incentive scheme, and their relationship will be separated into different sections yet they are both branches of the VII Tier system.
The Milestone Map breaks down our predetermined target of 42.5 million RHT sold in 7 different tiers. Each layer towards our final goal has a milestone associated to it in the form of platform operations and features. Table 5 shows the milestone associated with each stage. The most important tiers are I, II and VII. We have established that, in order to be able to provide minimal platform operational efficiency, we would require filling Tier I, which is 12.5% of the max RHT supply.
The limitations of reaching only Tier I will be associated with limited option variety and duration, platform applications and most importantly liquidity, given that the supply of tokens will be diminished considerably after burning the uncommitted tokens. We have identified Tier II as the most critical one as it will meet our most essential need to provide smooth operational efficiency and consistent range of option contracts. Tier VII completion 14 will result in 100% target fulfilment. At that point, alongside with additional platform application we will launch the Cryptofund on August 1st 2018.
|I||12.5%||The minimum amount required to launch the Rhea platform.|
Platform fully operational, but with limited option varieties and durations.
Platform fully operational with a consistent range of option contracts.
Introducing option Greeks, much more frequent rebalancing of index.
Enhanced portfolio functionality – more user friendly platform.
Complete backwards looking historical information on the Crypto20 constituents.
|VII||100%||Cryptofund launched shortly after options platform.|
Dividend Incentive Scheme
Each layer of the VII tier system is also linked to our Dividend Incentive scheme. Every tier is associated with a different level of quarterly dividend payout and it depends entirely on the contributed Ether during the campaign. This dividend will be based solely on transaction
volume on the entire platform once it is operational.
Token holders are expected to receive a quarterly dividend proportional to the completed Tier as shown in our structure in Table 6. The dividend payment methodology and payment details will be announced on our website before the launch of the platform. As explained earlier, full transparency is one of our three pillars, which is why the Rhea platform will share information on all collected transaction fees per period. Consequently, token holders can keep track of our revenue and the corresponding dividend. This will be achieved by giving platform users access to our online database. All parties will have access to the same data and it will be impossible to manipulate or mislead token holders about their future payout.
VII Tier System
The relationship between contributed capital and dividend incentive is shown below as part of our VII Tier System. The most important tiers in this structure are Tier II and Tier VI. If we achieve Tier I it would be difficult to manage the platform’s operational efficiency. Combining this with the expected lower transaction volume in Tier I and, given the burn model, would make it impossible to pay out dividends and maintain operations.
However, once Tier II is reached the dividend payout starts at 20% of all transaction volume. At this point, we would be able to manage efficiently and at the same time be able to reward our token holders with a high dividend. After that, each new completed Tier provides an additional 5% dividend. The dividend incentive ratio is capped at 40% and is shared by tier VI and VII. The extra capital collected between the last 2 tiers will be fully allocated to the Cryptofund. At these layers, we would be able to sustain the workflow and, at the same time, reward our token holders with a substantial dividend.
Immediately following the end of the ICO, we will start structuring the index and developing the platform. We have identified our main cost concerns over 2018 and how we would allocate the capital towards their completion. We firmly believe in accountability so we have provided a preliminary cost breakdown of the contributed capital. These costs can vary depending on the completed stages in the VII Tier System. The costs associated with the Cryptofund have not been included here, because they will vary between 10% and 25%
depending on the ICO’s success and the weights of the three highest expenses will go down. A full report of the allocated capital will be provided once they have been accurately appropriated.
The Rhea project has several dimensions, which are all inter-connected: the index, options and fund will create a crypto-equity hybrid. This will firstly bring more transparency to the opaque cryptocurrency world and, secondly, introduce the element of familiarity.
Our aim is to create a versatile platform, where everyone interested in cryptocurrencies can find a product in which he can invest with the click of a button, and which he fully understands. We will work hard to complete our mission, but we will need all of your support to break the Meta of finance and crypto!