LockTrip does not rely on its Crypto Reserves until at least early 2022
We know that some of our investors are a bit concerned about the current crypto market. Projects are dying on a daily basis. Some are filing for bankruptcy while others are quietly fading away.
What is the reason?
Each project needs to be examined individually of course, but there are some strong general patterns that cause a financial failure.
1. Betting on the market
Most of the projects have conducted their ICO by using crypto currencies such as Ethereum, which is a straightforward and effective way. A great share of them were launched during the huge bull market last year, which was a great timing in general.
The bull market was very tempting. It attracted projects to remain “all in” instead of liquidating a share of their raised funds and to heavily speculate on a further market push without securing the project first. As a result, huge amounts of value got destroyed when the bear market came, which caught many projects unprepared.
How did LockTrip act? We used a smart liquidation strategy when the market was still at its heights. It was our priority to liquidate enough of the crypto funds so that the future of LockTrip was fully secured without compromise and regardless of what happens to the market.
2. Irresponsible spending budgets
Another strong factor were the ridiculously high cash burning rates many projects displayed. It is no secret that getting listed on a single top tier exchange can quickly set you back by a few millions. And that crypto celebrities used for promotional activities ask for extremely unjustified prices.
“Marketing Agencies” popped out like mushrooms and expensive partnerships between projects were prioritized.
Endless amounts of traps arised in all forms and shapes. Coupled with the “quick money” projects got under their roof, this lead to a wave of irresponsible spending. Most of the spending was aimed at short term price spikes while putting long term responsibilities aside.
At LockTrip, we chose to focus on our long term development goals and to ignore the short term marketing stunts that were conducted all over the space.
Contracting 3rd party service providers
One of the biggest mistakes to do in the crypto industry is it to contract 3rd parties for fairly easy tasks. Such services include airdrops, market making tools, trading competitions, marketing packages or integration with websites that add no value to the project.
All those services are comparatively easy to do, but contracting others for such tasks consumes enormous amounts of resources. One of the reasons for this is the cheap money that came into the crypto space and resulted in hugely inflated prices and bad quality of service.
At LockTrip, we have always followed the strategy to build and execute the necessary tools in-house. This not only allowed us to dramatically cut costs, but more importantly to achieve a higher quality output while always maintaining full control over each element.
Our Team
We are happy to announce that we have now completed the internal process of building a fully in-house team. Until now, we were using a mixture of internal and external (but local) developers.
As the project is developing at a rapid pace, this restructuring became necessary (similar to moving to our own office) due to the development cycles becoming longer and the elements of the marketplace being more and more interconnected.
It also allows us to further reduce our operational costs notably.
Until at least early 2022
All the aspects above allow us to significantly expand our expectations on how long LockTrip would survive in a worst case scenario, which consists of
- … the crypto market bottoming at $0 (all of our crypto reserves becoming worthless)
- … premium features not generating any revenue (for some reason)
In such a very unlikely scenario, we would still have enough funding to support our development activities until 2022 without touching any of our crypto reserves and without relying on any revenue coming from premium features or other services.
Of course we expect the revenue stream coming from premium features to pick up much earlier than 2022 and thus operate at break-even. And who knows how the crypto market will look like in 2022?
As always, we will continue to be as transparent as possible and update our community about such developments. Be assured that your investment is taken care of with great responsibility!
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