Innovation Alert: Blockchain 3.0, Terra Protocol, an ICO Portal & more
Despite the mundane price action in the Cryptocurrencies in the past few months, the technology hasn’t stopped evolving & thus the innovation hasn’t stalled. I am going to review a few of these innovative projects for you today.
Cosmos (Interoperable blockchain)
Dubbed as the Internet of Blockchains, just launched its first main net, Cosmos hub — a part of its Cosmos Network ecosystem. The mediator platform which is supposed to bring interoperability between different blockchains raised more than $17 million in its first ICO offering held in April 2017. The first block on the network was mined @ 11 p.m. UTC (7 p.m. EST) on March 13. The ambitious project has been launched by the U.S-based startup Tendermint — founded in 2014 by Jae Kwon (CEO) and Ethan Buchman. The team has been working for a Swiss Non-Profit Interchain Foundation (ICF) ever since 2017 to deliver the first version of the Cosmos network. The open-source, permissible code of the platform has the following features (as per the website):
- Scalability — The network uses Tendermint based BFT (Byzantine Fault Tolerance) consensus algorithm which is much more efficient & scalable than the slow, cumbersome & power-hungry PoW.
- Interoperability — The platform provides a developer-friendly, modular framework for building blockchains. We are seeing a proliferation of the Tendermint based blockchains making use of this futuristic feature.
- Usability — Transfer of assets on traditional blockchains is not possible, but Interblockchain Communication (IBC), a messaging protocol for blockchains is employed by Cosmos to perform interoperability
Interoperability in Cosmos has certainly brought us closer to third-generation blockchain networks. Bitcoin was the first one which introduced the World to peer-to-peer (P2P) decentralized digital transactions, while Ethereum followed with a smart contract enabled dApp platform. A crypto startup TenX, earlier in 2018, successfully tested the interoperability feature using their COMIT (Cryptographically secure Off-chain Multi-asset Instant Transaction network) technology.
Terra Protocol (Next-gen stable coin)
Although it is early days for this project, it presents a strong use case. 2018 was a strong year for stable coins with innovative projects like Xank emerging on the scene which go beyond the price stability feature. Now, we have a new star on the horizon in the shape of Terra Protocol. It is a being proclaimed as the new decentralized stable coin poised for wide-spread adoption. Here are a few of the reasons why:
- Multi-pegged: Most of the current stable coin projects are predominantly pegged to the US Dollar (or some other physical asset), but this accounts for a much more centralized approach prone to policies of a single central bank or country. Terra plans to minimize volatility and increase decentralization by pegging the native currency to a basket of fiat currencies called the SDR currency basket.
- Scalability & Interoperability: Implementation of the Terra protocol as an independent Proof of Stake blockchain on Tendermint gives it the ability to overcome the limitations of the Ethereum platform — most noticeably scalability while working on the interoperability feature at the same time.
- Price stability: Terra achieves this by algorithmically expanding & contracting supply. Luna, the second native cryptocurrency (initial supply of 1 billion) of the protocol derives its value from the transaction fees collected on the network and acts as a buffer from price volatility. A simple representation of how this achieved:
- To buy 1 Terra, the protocol mints and sells Luna worth 1 SDR
- By selling 1 Terra, the protocol earns Luna worth 1 SDR4
4. Strong Funding: Binance Labs, OKEx, Huobi Capital, and Dunamu & Partners, the investment arm of UPbit operator Dunamu are among the early-stage investors in the project giving it strong credibility & a worthwhile project. While blockchain funding from firms like Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, and Arrington XRP Capital has given it strong financial backing.
5. Greater Adoption: With Terra’s Co-founder Daniel Shin’s Ticket Monster already having 9 million annual customers under its belt & Terra Alliance’s 40 million customers and $25 billion in annual transaction volume gives Terra a huge customer base to aim at once the project goes live.
ICO Portal (Regulatory platform)
We are seeing a growing number of regulators around the World becoming more receptive & proactive in lowering the barriers of entry into Blockchain/Crypto business by drafting frameworks to streamline the process. Thailand is the latest country to take a step in that direction.
After the Thai SEC’s announcement to loosen the barriers last December, they have approved the first ICO Portal in the country — this portal would allow the screening of ICOs, perform due diligence, confirm smart contract source codes and conduct Know Your Customer (KYC) procedures.
In a related development, more recently Stock Exchange of Thailand (SET) has also announced the launch of a Digital Assets Platform in 2020 as part of its three-year strategic plan towards digitizing the financial ecosystem. According to the statement, the digital infrastructure platform would act as a one-stop-shop for the digital capital market, new investment opportunities and leveling up investment experiences for more convenience and higher speed.
Swiss ETP & German STO (Investment)
The Ethereum-based ETP that was jointly launched by the primary SIX Swiss stock exchange & Swiss startup Amun AG back in November has finally started trading. The crypto trading product is trading with the ticker symbol AETH with a 2.5% management fees. Encouraged by the response on the ETP the Swiss exchange is reportedly planning to launch an exchange-traded product (ETP) which will track the price of XRP (Ripple).
Adding to the list is the first German Security Token Offering (STO) — The prospectus has been approved by the German financial regulator BaFin, while the tokenized bond BB1 is issued on the Stellar blockchain and pays a fixed coupon of 4% per year and variable profit participation. The offer period begins today, March 11th at noon. Early investors get significant discounts.
A special mention of IEO (Initial Exchange Offering) — a sale token offering by the Malta-based Bittrex exchange, modeled after the Binance Launchpad. The IEO which was supposed to launch the XRD tokens on March 15th — developed by International gaming data blockchain project Raid, however, was canceled soon after the announcement citing last-minute changes made by the latter. In a similar move this January, Binance Launchpad had hosted the high-profile Tron based Bittorent token (BTT), which netted $7.1 million dollars with the sale of 50 billion tokens within 15–18 minutes.
Interesting times ahead guys. There are dozens of other good projects that deserve attention & mention. Please feel free to discuss any or mention them in your comments or feedback.
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Originally published at www.datadriveninvestor.com on March 16, 2019.
