Why invest in smart contracts?

There’s a reason Ethereum is up more than 200% in 2020.
Revix has created an easy-to-use online platform that enables everyday investors to buy an equally-weighted bundle of five cryptocurrencies that support smart contracts. Image: Shutterstock

Revix’s Smart Contract Bundle is attracting new investor interest as the investment case for smart contracts and decentralised finance grows.

Imagine a world where a large financial transaction no longer requires lawyers, escrow accounts, agents and other go-betweens all taking a slice of your money. Think of a world where you only pay for your online shopping when it’s delivered, not when it’s ordered, or where ownership of property can be transferred in a matter of seconds. This is the world that smart contracts and decentralised finance (DeFi) aims to build, and the foundations are being laid right now.

Cryptocurrencies exist to make digital payments cheaper, faster and more global – to anyone, anywhere. DeFi takes that promise a step further by creating an easy to use and accessible alternative to every financial service you use today, from savings and loans to trading, insurance and more.

This is starting to become a reality on smart contract blockchains like Ethereum, EOS, NEO, Cardano and Tron. Developers build programmes on top of these blockchains that can do far more than just send and receive cryptocurrency. These programmes are what we now call decentralised apps, or ‘dapps’, and are really just a mini-programme that runs on top of a blockchain – like an app that runs on your smartphone – and executes actions based on certain conditions.

Picture it …

For example, imagine you have a computer hardware business, and you don’t trust a new supplier to deliver the goods on time, or in the right condition. You could download a smart contract app from an app store, fund it and set the terms for the release of your money to the supplier. This creates a transparent and secure scenario where you can be confident that the supplier has to deliver to your agreed terms. Your supplier also benefits as they know that when they deliver they get paid immediately.

Sean Sanders, founder of investment platform Revix, backed by JSE-listed Sabvest, explains: “While some of these concepts might sound futuristic many of these smart-contract-powered applications are live today.”

At the time of writing, the cryptocurrency market stands at $318 billion, making up less than 0.2% of the world’s investable market. However, it has grown from $78 billion just three years ago – an annualised growth rate of nearly 60%.

This makes it the top-performing asset class of the last decade.

The smart contract segment of this market stands at around $25 billion and has grown considerably in 2020 alone.

While investing in a single smart-contract-focused cryptocurrency like Ethereum is possible, researching, trading and securing a cryptocurrency portfolio can be complicated, time-consuming and intimidating.

Easy access

This led Revix to create an easy-to-use online platform that enables everyday investors to buy an equally-weighted bundle of five cryptocurrencies that support smart contracts like Ethereum, EOS, NEO, Tron and Cardano for as little as R500.

Sanders explains: “Many traditional investors have heard about these smart contract cryptocurrencies and seen the growth in the decentralised finance sector, but don’t know how to invest in them. So we’ve created a specialised Smart Contract Bundle that allows everyday investors to own a basket of the smart contract cryptocurrencies that power decentralised finance, in just a few clicks.”

Revix’s Smart Contract Bundle is offered alongside its Top 10 Bundle, which is like the JSE Top 40 for crypto. Its other thematic bundle is the Payment Bundle, which provides exposure to the top five payment cryptocurrencies, like Bitcoin, Ripple and Litecoin, that are looking to make digital payments cheaper, faster and more global.

Revix’s bundles have shown impressive returns this year, all outperforming an investment in Bitcoin which is already up over 50% since the start of January.

Source: Revix

“The Smart Contract Bundle has been the standout performer for us,” says Sanders. “Led by the growth in DeFi applications that run on smart contract blockchain networks, we’ve seen returns in excess of 200% from Ethereum, EOS, NEO and Cardano this year, making this our top-performing bundle by far.”

For those familiar with financial products, Revix’s bundles achieve the same outcome as a low-cost diversified index fund or exchange-traded fund (ETF).

However, Revix doesn’t charge any monthly subscription fees, but rather a simple 1% transaction fee for buys and sells and a 0.17% per month rebalancing fee (which amounts to 2.04% a year) on the total bundle value held.

Sanders continues: “We believe the real opportunity when it comes to crypto is not the 10% to 20% someone can make from short-term trading but the 10x or even 100x return from long-term investing in this nascent crypto asset class. As the world goes more digital, it’s not hard to imagine DeFi and decentralised finance continuing to grow in the years to come.”

It’s a rare opportunity to see an entirely new industry boom from scratch. Money and finance have been around in one form or another since the dawn of human civilisation – crypto is just the latest digital avatar. It’s hard to even fathom the innovations that will emerge from this space. The only parallel that comes close? The mass adoption of the internet, which was written off as a fad at first, but the companies that emerged – the Amazons, Googles and eBays – went on to change history. Disruptive technologies like crypto, smart contracts and decentralised finance come along once every decade and this is just the beginning.

Brought to you by Revix.

About Revix

Revix brings simplicity, trust and great customer service to investing. Its easy-to-use online platform enables anyone to securely own the world’s top investments in just a few clicks.

Revix guides new clients through the sign-up process, to their first deposit and first investment. Once set up, most customers manage their own portfolio, but can access support from the Revix team at any time. 

For more information, visit Revix.

This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing please take into consideration your level of experience and investment objectives, and seek independent financial advice if necessary. 

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Bitcoin and other virtual currencies are not regulated by law and are not backed by any government. Who do you turn to if something goes wrong with them? Why did the Chinese government ban Bitcoin?

Bitcoin isn’t banned in china anymore, their inheritance laws now even include cryptocurrencies like bitcoin. They’re even introducing their own digital currency so they’re actually fully embracing crypto…

Tron? I thought that was an ’80s straight to video movie? Sorry guys, youve lost me with this video game money.

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