Divi Interview With CEO Geoff McCabe Part 1
This week's interview is with Geoff McCabe, CEO of DIVI. Geoff has an M.S. in Physics/Materials Engineering from UCF. He's a serial entrepreneur and leader of several startups, with up to $12 million in yearly sales and over 1000 employees.
At first glance, two things stuck out to me about DIVI. The market cap appears to be very high when compared to other established masternode projects and your advisor team is loaded with real-world talent. Can you speak to why your market cap has held strong in this market and how did you attract the advisor team and how involved are they in the project?
I think our market cap is relatively high for many reasons. The first is that we are solving a really big problem that people know is very important. The complexity and unfamiliar jargon are big factors holding back the entire crypto market, because average users are intimidated and stay away. Most of the big investor money is held by older people who expect crypto to be easier, more like the apps they’re used to in mainstream tech. Basically, crypto now is like MS-Dos and we’re making it like Apple. Two other big factors holding back crypto are the poor security and the overall crappy image that the entire crypto space has created for itself. Scams, hacks, criminals, pump-and-dumps, anonymity, etc. This is what’s making mainstream news. We’re tackling all these challenges with our Divi ecosystem. That’s part of why we’ve got so much positive mainstream press. We’ve done TV interviews on the floor of the New York Stock Exchange twice (CheddarTV), one at Nasdaq, and twice on TechRepublic.
About our advisor team, each has his or her own story as to how they joined us, but it comes down to all of them really liking the direction we’re going, and having confidence in my personal integrity and experience. I’m fifty years old, with over twenty five years of building successful startups in a variety of sectors. We’ve had some rough patches during our development based on some really bad luck, but we haven’t lost any advisers because they have the inside scoop and have seen us making very smart decisions. They’ve seen how the three of us have taken everything that can be thrown at us, and our response is to just stay up all night for days, working and creating. Entrepreneurs love to see this kind of passion and they know it leads to inevitable success.
When I look at most other cryptos, it’s true they’ve fallen more than us from their all-time-highs. I calculated a few days ago that we’re in the top 12% of performers, based on ICO values, for coins that completed their token sale in October 2017 or later. So we’re not doing badly compared to the general market.
When Divi was announced, multi-tier (easy-setup) masternodes were a new feature, but since then we have seen several projects apply this strategy. Most of these projects did not turn out great (BytePay, CropCoin, Olympic Coin). What will be different for Divi?
I don’t think the success or failure of these masternode coins is based on whether or not they have a tiered structure or not. When we announced the idea, of course people liked it right away and a few coins rushed this to market as gimmick. We’re building an entire ecosystem with a long range plan, and that takes time.
DIVI masternodes will launch very soon. There will be multiple masternode tiers: Copper, Silver, Gold, Platinum and Diamond. What is the advantage of so many different tiers?
The short-term advantage of a multi-tiered masternode system is to help solve the “coin velocity” problem and dampen the effects of the inflation that’s caused by paying high masternode rewards. We have a 106% inflation rate the first year, and 51% the second year. It rapidly falls off. I designed it this way to be very attractive for masternode holders to get in early and become part of our network while the price is low. With such high payouts, the natural tendency is for people to want to sell their rewarded coins on the market, which pushes the price down if too many people do it. So instead, we gamify this, making people want to save their coins to reach a higher level where the rewards are higher. In general, I can’t express enough how important gamification is, especially in crypto in which millenials are the biggest group.
The long-term advantage of a multi-tiered system is that as we build out the various technological layers, we can call upon the tiers to perform these functions. Higher masternode tiers, who get higher rewards, will be expected to perform more work for their money. We have dozens of ideas of how to use this system.
Divi did a Token Sale to raise capital for development and marketing, after breaking the soft cap, you managed to raise a total of over 2 million dollars. As a POS project, what was the reason to do a crowd-sale instead of using a percentage of the block reward to pay for expenses?
Using the governance treasury to pay for expenses can be challenging in crypto because of low liquidity and market volatility for many smaller coins. Selling that volume of your coin on the open market puts downward pressure on the value. PIVX launched in a completely different universe than we operate in now. Now it’s vital to have funds to start with so that you can build a reputation that gets you to a point of higher liquidity.