Rhea is a company that centers around an options trading platform called Rhea Crypto20 – a capitalized weighted index of the top 20 cryptocurrencies. The higher the market cap of a specific cryptocurrency, the bigger its weight is in the index.
The Crypto20 platform aims to introduce the aspects of hedging and speculation to the cryptocurrency universe, encapsulating what Rhea seems to value to be the best of both the finance world and the cryptocurrency world.
Most new investors might not understand the cryptocurrency market to its fullest potential. There are currently over 1,000 different cryptocurrencies to date, each with its on underlying differences in tech, vision, team, broader goals and more. This results in immense prerequisite knowledge of the market in the past, present, and future. As a result of said prerequisite knowledge, investors are prone to either skip investing in cryptocurrencies altogether or invest without the proper information. Moreover, investors coming from the finance world that are used to deal with traditional markets that are well structured and covered by many indices will find themselves lost in the cryptocurrency market without the right pathing. There are several cryptocurrency indices out there (Bittwent and Crix for instance), but they are yet to be accepted as the portrayal of the entire market by the majority of investors. The Rhea Crypto20 is Rhea’s goal to create a single index that will accurately describe the market’s direction and current position, which will draw more investors.
The price of the index at a given point in time will be obtained by summing the current market caps of the constituents. Taken from the Rhea whitepaper itself is an example:
The price of the index at a given point in time will be obtained by summing the current market caps of the constituents. Rhea is going to rely on several pricing feeds for their formula’s calculation, the formula that calculates the index value in relation to the current market cap and the base market cap. By offering daily and hourly rebalancing, investors will receive a more accurate tool for tracking and speculating in cryptocurrencies.
The Rhea token is ERC-20 compliant meaning it will run on the Ethereum blockchain, and will require ‘gas’ for transactions. Rhea tokens are the means by which options trading will be executed on the platform, Cryptofund investments will be made and the dividend will be paid out. The maximum supply of Rhea will never be more than 50 million tokens. Its price will be pegged at 0.001 ETH, with discounts available for different time periods. The Rhea token will be used to buy and sell options on the platform or provide market liquidity for extra return.
There are 3 benefits for holding a Rhea token:
- Options trading on the Crypto20 platform.
- Dividend payment that will derive from transaction fees on the Crypto20 platform. Depending on the tier reached in a document called “Dividend Incentive Scheme” in Rhea’s whitepaper, a pre-set percentage of the collected fees will be distributed among token holders once every 3 months, proportional to the amount each token holder holds.
- Cryptofund investing – if the ICO is successful, the Rhea platform will feature a cryptocurrency hedge fund called the Rhea Cryptofund.
As previously mentioned, the Rhea token supply will be 50 million tokens at most, 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. The founding team will not retain tokens. In order to ensure fair dealing, any tokens that remain uncommitted during the offering period will be burned before the 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. Rhea considers the ICO as a success when 5.5 million RHT (Or 12.5% of the maximum supply) are sold to investors. Rhea refers to it as the minimum liquidity threshold to efficiently operate the trading platform.
The Cryptofund is a hedge fund focused on investing in cryptocurrencies with a long-term perspective. The launch of the fund is greatly dependent on the success of the ICO (described in the milestone map below). If a 100% is raised, it will launch shortly after the Rhea platform. Anything below tier VII would delay the launch.
The Cryptofund will be long-term oriented, and will have a relative return objective which is to outperform the Crypto20 Index itself. A 1.5% management fee charged on assets under management, and a 10% incentive fee which will be calculated on the net gains of management fees, will be applied. Investors will also receive payments in the form of dividends. There will be a lock-up period of 3 months, and Rhea claims they will publish short weekly updates on the hedge fund and 3-month full reports.
Rhea is a company under Omega Crypto Assets Ltd., which was formed by Georgi Kirilov and Detelin Sertov. Not much is known about Omega Crypto Assets Ltd. and there isn’t much information about it online.