NovaChain emulates the leader of the industry, but falls short on many key points.
- Good daily returns from REX
- Nice auto reinvest feature
- ERC20 token on ethereum blockchain
- Price manipulation
- No proof of trading bot
- No whitepaper
- Unknown team
What Is NovaChain?
NovaChain has a very similar origin story to Arbitraging and it’s very clear that NovaChain has looked heavily into their business model. NovaChain initially launched their ICO back in late 2017, but under a different name, NovaLend. Back then lending platforms was the hottest in crypto after the major success of BitConnect and many tried to get a piece of the pie by making copycat platforms, many of these turned out to be scams, including BitConnect. When BitConnect pulled an exit scam in Jan 2018 the entire lending space had lost its credibility and many platforms scrambled to survive, but the majority just left with people investments. The term “lending” was tainted and some of the remaining platforms pivoted into staking and NovaLend was one of them. They changed their name to NovaChain and offered staking packages instead, but in practice there was no difference between staking and lending. The majority of investors were smart and/or scared enough not to invest into these staking platforms and as far as I know, no successful staking platform remains to date. One platform went in a different direction and build a platform around a trading bot with no lock in period and trimmed the MLM strategy for a sustainable model, this platform was Arbitraging and many platforms are trying to copy their business model, NovaChain being one of them.
How Does NovaChain Make Money?
NovaChain claims to have improved on their Forex trading bot and modified it to work with cryptocurrencies. Their trading bot is called REX and is also an arbitrage trading bot taking advantage of the price differences on different exchanges. Simply put arbitrage trading works by buying low on one exchange and instantly selling for higher price on another exchange. This is a normal trading practice which also works in markets outside cryptocurrencies.
It’s possible to see the actual trades done by REX on the NovoChain website, but the trades a not live. Here is a quote from their website:
“Timestamps are not from actual exchanges, they are our own. Trades are not showed in real-time for security reasons.”
I for one would like to see some live trades or proof of any bot. This could all just be smoke and mirrors like the old lending platforms.
The NovaChain Lending Platform
The NovaChain platform is very similar to the Arbitraging model. There are no lending tiers or lock in periods with NovaChain, you get access to their trading bot and then you pay a fee of the profits generated. With time those fees will be reduced to a minimum of 1.8%.
|BOT usage||Fee on profits|
|1 – 30 days||3.0%|
|31 – 60 days||2.5%|
|61 – 90 days||2.0%|
The timestamps on fee reduction are exactly the same as provided by Arbitraging, but the fee reductions is lower for each tier with NovaChain.
REX Arbitrage Trade Bot
The way REX works is also similar to how the Arbitraging aBOT works. In order to make use of the REX trading bot you need $200 worth of NOVA tokens as a minimum and there is no roof on how much you can invest. The worth of the NOVA token is tied to their internal exchange so to take full advantage of the REX bot you should follow the price movement on the exchange. If the NOVA token is on the rise, then it might be better to hold on to your tokens before transferring any in to REX.
Once you transfer your NOVA tokens to the REX bot then you will no longer have any claim to those particular tokens. You are selling your NOVA tokens to the NovaChain platform for the current exchange rate and converted into $USD. This is the $USD amount you will receive profits on and will not change if the price of the NOVA token fluctuate, this is similar to the principal investment from the old lending platforms. In return you will receive daily payouts in NOVA depending on the performance of REX.
NovaChain also have the same auto reinvest feature from Arbitraging but with one change. You have the option to decide how much you would like to reinvest into the REX bot and unlike Arbitraging where it’s set percentages of 25%, 50%, 75% and 100%, you have the option to define the percentage yourself. This provides the option to both load of your investment in the REX bot, but also grants you the possibility to sell or hold on to the remaining percentage of NOVA tokens.
Just like with Arbitraging you have the option to withdraw your investment from the trade bot at any time. When you withdraw from REX, you are re-buying NOVA tokens at the current value. If NOVA has gone up\down, you will get less\more tokens back, but it will always equal to your original $USD value. This feature is very exiting because you can play the market but also a feature which Arbitraging has to set limits to due to people exploiting this to get more tokens. NovaChain has followed suit and when you pull out any of your investments in REX you will have a 20 days lockout period. This means you have to wait 20 days before you can add anything to REX again. This lockout period will not be activated when you take profits.
When you’re expecting the value of NOVA to go up, you want to hold the token. When you’re expecting the value of NOVA to go down, that’s when you want to transfer to REX to maximize your $USD amount.
Example: 500 NOVA tokens in wallet at $0.5/token equals $250 USD value now in REX. At this point you no longer own NOVA tokens and you cannot participate in any token price growth with these funds since it’s not tokens anymore. Your $250 USD is now in the REX and will never change, no matter to where token price moves. The REX registers this $250 principal USD value and trades with it indefinitely, until you personally decide to pull out your investment.
When you withdraw your original $250 USD from REX, you actually buy new NOVA tokens as the transfer happens from REX to your NOVA wallet. You then automatically buy the NOVA tokens again at the current NOVA token price. You invested $250 USD and that’s the USD amount you will get back out. If NOVA tokens are now worth $1/token, you receive 250 NOVA tokens back. If NOVA token is still at $0.5, you will receive 500 NOVA tokens back.
The profits are paid out in NOVA tokens by REX at the current price of NOVA. So if you had $250 invested, and made 1% that day, you would get $2.5 worth of NOVA tokens, not 2.5 NOVA tokens.
This is important to understand for your strategy as to how to maximize your available funds. You do not transfer your tokens to the REX, assuming whatever tokens you gave the bot will increase in price as the token price rises because in REX you do not own any NOVA tokens.
The REX performance is very impressive with daily gains close to 1%, as you can see from this screenshot taken 09 Oct 2018:
NOVABOX Smart Contract
A brand new money making option has been added to the NovaChain platform as I am writing this, which they simply call NOVABOX. This is a smart contract on the Ethereum networks and works similar to Proof of Weak Hands 3D (PoWH3D). I do not have any experience with these types of investment schemes and they have no interest to me. For some reason they do not explain on their website what NOVABOX is all about, only how to add funds. For this reason I’ve had to dig through their telegram and I have found the rules to the contract and they are as following:
- The smart contract itself has no owner and will receive a full security audit that will be published.
- Investors will be able to deposit BOTH NOVA and ETH in order to get dividends and to create an additional stream of passive profit.
A. NO LOCK
B. 11% deposit fee and 11% withdrawal fee from both ETH and NOVA that go proportional to the older holders based on how much they invested previously.
C. ETH fees:
6% goes to NOVA holders as dividends
4% goes to ETH holders as dividends
1% goes to REX investors proportional with their investment value
D. NOVA fees
6% goes to NOVA holders as dividends
4% goes to ETH holders as dividends
1% goes to AIRDROP (The more NOVA you invest, more chances you have for AIRDROP)
E. No minimum deposit for ETH and NOVA
F. All users will need a Metamask and deposit both ETH and NOVA from the same address
G. The more you invest the more you win from dividends
H. The contract pays dividends daily to the designated Metamask address
I. The contract will be active every 8 hours with a duration of 1 hour. A countdown timer will be active on the site at all times.
I do see the potential in these kind of investment schemes, but to my knowledge it’s mainly the earlier investors who will benefit and the shelf life of these platforms are usually not that long. Once the hype is gone, people are on to the next one to make a quick buck.
The Team Behind NovaChain?
There is no information to be found about the team behind NovaChain, plus I have not been able to find any whitepaper on their project.
But lets look at their domain and hosting situation. The domain was bought 2018-03-02, which adds up with their re-branding, and will expire in 2 years. It makes sense not to register the domain for many years since they were struggling at the time they pivoted to a new model.
Their domain contact is protected with Cloudflare and bought via GoDaddy. It seems it’s standard now to protect the identity of the domain owners these days, so in the future I’ll simply skip this information.
However they have not opted in for the dedicated server for their site and that really shined through today as I am writing this review. The NOVABOX is close to release which must have caused a lot of people to flock to their site hoping to buy some cheap tokens before the release. The result was server downtime and a very slow loading website all which does not bode well for the future.
The Bottom Line
At this point you might be thinking that Arbitraging was mentioned too many times in a review about NovaChain. But NovaChain in it’s current state is very much so a copy of that platform with little to no innovation on many parts. According to their telegram channels many things will roll out in the near future and I hope that can set them apart from Arbitraging.
One of the major downfalls of this platform is their price manipulation. When entering the REX trade bot you will get in at a pegged price instead of the organic price from their internal exchange. This was a popular incentive to get people to lock in loans at a higher price back in the days when lending platforms were struggling after the fall of BitConnect. As I am writing this, the organic price of 1 NOVA token from their internal exchange is $0.54, but you can enter REX at 0.76$. People think they are getting a good deal, but the problem which many doesn’t realize until later is that when you take profit, it will be converted at the pegged price of $0.76, but you can only sell it on the exchange at a reduced price. The only way for this to work is if you HODL your token and wait for the price on the exchange to reach that target. I’m not a fan of this and it’s like holding your investors hostage.
Like I touched on before then the hosting solution they have selected is just terrible. I don’t want to start on a rant here, but I’m still amazed by the sheer oversight from the platforms who doesn’t get the dedicated server and prepare for the high spike in traffic, which will always ensue during ICOs and when new features are added to a platform. The amount of FUD which can be generated during a server outage is simply not worth the few thousands dollars for a dedicated server.
A major red flag for me is that I’ve not been able to dig up their whitepaper and there is no information to be found on the team behind NovaChain. This just reminds me of the bad practice of the first generation lending platforms and I honestly think that we have to set the bar much higher today.
But my biggest concern with this platform is the lack of proof concerning their trade bot REX. Posting trade orders on their website and not even in real time does not mean that there is a bot. This is the moneymaker of the platform and with such a good performance I would definitely post evidence of a bot if I was the CEO of NovaChain. Arbitraging has posted videos about their aBOT and also released videos with the beta-testers of mBOT with proof of actual trades happening. Why have NovaChain decided to keep their bot a secret? They claim to have improved on a bot they have used for Forex trading for 6 years, but didn’t they use the exact same bot when they launched NovaLend, or how did they generate profit there and why is REX performance so much better now?
That was a lot of negative things about NovaChain so lets touch up on the positive things. In the past lending platforms have generated a lot of attention due to their MLM model, getting referrals was more lucrative than making actual loans and that is a recipe for disaster. So it was nice to see that NovaChain also have a referral system that only includes the direct referrals and only provides 5% to the initial referrer. This is a step away from the ever occurring pyramid scheme buzz that always comes with these high yield investment platforms.
One thing that NovaChain does better than Arbitraging is their website, it’s much more user-friendly. It’s easy to get started and you don’t have to make a metamask account to invest in the platform. While Arbitraging is more for the experienced users, NovaChain caters to the newcomers. The fees are also a bit lower over time when using REX compared to the aBOT.
The team behind NovaChain is not active on social media, it seems like they have completely forgot about their facebook and twitter account. Their facebook page is still named NovaLend and was last updated in late June and their twitter page was last updated in mid August. The only way to get information about their platform is by using telegram and the majority of investors are not using that. However their are very active in providing information about their platform on telegram. I urge everyone who is interested in investing in any of these platforms to have a telegram account, because this is the main source of information.
I’m very skeptical about NovaChain, but it does seem to generate some hype these days and the price of the NOVA token has tripled since I started making this review. To me this platform is not a long term investment, but more like a get in and get out quick kinda thing, just like the old lending platforms. I for one would much rather stick with a long term platform like Arbitraging instead of chasing quick gains and move on to the next one.