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Before continuing, two very important notes:
- We have no idea if Valor will succeed. Not only in its mission, but also in the development of the code and in the collection of the capital necessary to prove.
- We do not know if any of this information has been leaked, directly or indirectly, by short sellers who hope to reduce the price of XRP. Furthermore, we do not know if the people involved with Valor have an XRP exposure.
Background: Valor was originally launched at the end of 2017 by Vishal Harpalani, who had previously worked for three years with the first investor of Ripple Flight Ventures (led by Gil Penchina).
- Harpalani's original plan was to raise $ 160 million through an initial money supply for a new cryptocurrency that would become a widely distributed source of value stored in developing countries.
- He would also collaborate with mobile portfolios and mobile operators who do business with underbanked, thus helping Valor obtain network effects (and lower conversion costs from fiat currencies).
- But the plan was not a success with investors. Harpalani maintained Valor's basic goals, but decided that the best means would be to effectively perform a hostile takeover of XRP.
How would it work:
- Valor wants to increase "tens of millions" of dollars to shorten the XRP, thus lowering the price. This would be done through a debt instrument, not an ICO.
- It would then create a "fork" or clone of the XRP network in which XRP holders (except Ripple) wanted to receive a Valor token for each XRP token.
- The value would redistribute extra Valor to its community and incentivize the owners to exchange even more their now depreciated XRP. Basically, forcing a capital flight.
Harpalani confirmed to me that Valor is working on a "hostile takeover of a top-10 cryptocurrency", but refused to discuss XRP or Ripple. He also confirmed that his advisers include the serial entrepreneur Alan Braverman (Yammer, Xoom, etc.), although Braverman has not responded to a request for comment.
Will it work?
Probably not. In particular, since Valor is still raising funds and working on his code, which means that Ripple still has several months to develop the cryptographic equivalent of a poisoned pill. Furthermore, even if Ripple is not able to apply the defenses, there are still tons of challenges – not least the fact of convincing enough XRP holders to make the switch.
But it is an experiment of interesting thought, and it is the first known attempt of something that the entrepreneur Chris Herd reflected on the spring on Medium.
The bottom line: There is a growing cryptic battle between decentralization purists and a new generation that does not care about the presence of central companies like Ripple (or, soon, Facebook). The value, even if it is never taken off, is a sign of the skirmishes that will come.
