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BANKEX Proof-of-Asset Protocol: Financial Market Evolution

Jayanand Sagar | October 18, 2017 | 11:26 pm
bankex, banking, fintech, blockchain
Bitcoin

BANKEX Proof-of-Asset Protocol: Financial Market Evolution

Jayanand Sagar | October 18, 2017 | 11:26 pm

There are two Protocols that are widely used today: Proof-of-Work and Proof-of-Stake, – they are perfect for cryptocurrencies. However, with the growing demand in facilitating asset liquid and yet avoiding long and tiring procedures of traditional stock market compliance and regulations a new approach has paved its way BANKEX was proud to present their Proof – of – Asset protocol. This technology enables information to be passed on in real time directly into the blockchain.

What is BANKEX Proof – of – Asset protocol

By harnessing and exploiting the technologies of Internet of Things (IoT) and Artificial Intelligence (AI) BANKEX is building its Internet of Assets (IoA) on the foundation of Bank-as-a-Service (BaaS). The BANKEX team is aimed at delivering a Proof – of – Asset (PoA) protocol that will be considered an industry standard for the creation of new decentralized capital markets in multiple business niches.

BANKEX PoA protocol will be available for third-party fintech providers, such as – AI and IoT labs, traditional financial institutions and most importantly a wide variety of asset owners.

BANKEX technology is changing the way ordinary transactions are carried out by making them clearer, faster and much more reliable.

Asset Tokenization

Tokenization is the process of protecting sensitive data by replacing it with an algorithmically generated number called a token, much like a website domain is a representation of an IP address on the internet a token is a representation of information on the blockchain.  By processing this information BANKEX PoA can perform actions that would usually require a third party for verification, such as payments. In laymen terms – tokenization of assets is basically the process of passing on the rights to an asset into the blockchain and making it globally available. Our tokens carry both functions: utility and security, while serving as a gateway to our platform they are also backed with the real world assets.

Currently, financial markets are faced with several problems that lead to lower liquidity of assets, here are just a few that BANKEX attempts to eliminate:

  1. Numerous asset owners – this creates basic communication hurdles, making it harder to reach common ground.
  2. High dispersion of an asset – this results in a blurred understanding of cash flow, that is generated by every single asset.
  3. Long period to launch projects and to achieve desirable liquidity.
  4. Inability to enter the financial market and attract sufficient investments for non-public companies.
  5. The complicated process of tracking the lifecycle of an asset up to the generation of cash flow.
  6. High legal and accounting expenditures in terms of transferring of assets when early investors want to sell their assets at peak profitability.
  7. Complexity of withdrawal of assets if the terms of the contract are not fulfilled.

In order to tokenize an asset, the company needs to ensure that said asset generates cash flow.

How it works

BANKEX serves as an ecosystem that unites Bank – as – Service, PoA protocol, and blockchain technologies.

Bank – as – service is a model, that enables offering of fintech services without creating brick and mortar financial institutions. By using APIs and technological processes it delivers the ability to create new financial products for various business niches. Currently FinTech is going through a stage of rapid evolution. Using a BaaS model will help FinTech companies and businesses expand their potential. Decentralization, that is available in blockchain, and smart contracts can solve the problem of lost trust, associated with modern banks.

In general, 3 entities are involved in the process:

  1. Originator – the owner of an asset.
  2. Supplier – the purchaser of the tokenized asset, i.e investor.
  3. Product owner – the company that creates different fintech products providing its technology for tokenization, e.g.BANKEX.

Everybody wins: originators are empowered with new business opportunities, suppliers increase their investment portfolio, and product owners benefit from supporting transactions between originators and suppliers.

The Process can be broken up into 4 stages:

1.     Digitizationall available information regarding the asset is collected and verified by BANKEX before it is entered into the Smart Contract; at this stage all the legal and accounting issues are addressed, analyzed and if required, resolved.
2.                 TokenizationStep 1 – The gathered information is placed into an Ethereum Smart Contract.

Step 2 – The Ethereum Smart Contract is transformed into a Smart Asset. During this step BANKEX provides escrow services. A token is formed.

3.     Asset tradingStep  3 – The newly created token goes to market. The token has to comply with a set of trading rules in order to be placed on the market, it, therefore, passes a set of filters vital for verification.

Step 4 – Here we adjust the ask price to the offer. The smart contract is put on the BANKEX market.

4.                 Dealing.During this step, it is important to make sure that the Token is guaranteed to be delivered to the supplier (investor). This is guaranteed by Proof of Mining. The result of this stage is that the product token is successfully delivered to the supplier (investor) and stored in his wallet, in turn the BANKEX token is delivered to the originator (asset owner).

 

Use Cases

The Proof – of – Asset protocol technology can be applied to various business niches all over the globe.

Let’s review a few possible applications. Target assets – assets with capitalisation more than $100 million.

 

Case 1Case 2Case 3
SectorReal estateNon-Profit: drinking water for Africa and IndiaRetail franchise network
CountryHong KongAfrica, India, Russia, USUS and Russia
ClientInternational bankFilter producerRetail chain
AssetCommercial real estate and residential housingFrozen drinking waterThe stores’ cash flow
Token economySquare meters of future apartment are used to back up tokens. Token price is stable. Project is on the go while apartments are being built.

(1 sq.m. = 10 tokens, One 100 sq. m.  apartment =1K tokens)

Charity donors are to buy water tokens

(1 token=1 liter of drinking water)

The tokens are backed by revenue that is generated by royalties from franchises Tokens can be used to purchase products in the chain.

(1 token = 1 product)

Business caseInvestors are given a liquid asset after the future real estate is tokenized.In order to facilitate both the donation and donation tracking process. After the water tokens are purchased donors can track their journey to the end consumer.To finance expansion i.e. new stores. Token owners can buy products in the retail chain as well as take part in the company decision making process.

 

BANKEX is supported by 10 banks, top technological companies, including the Microsoft Corporation.  BANKEX is ranked in Top 50 fintech startups of the world.

BANKEX technology is claimed to be successful by members of the blockchain community. During the open presale, $10 million was raised, while the amount of $1,5 million was reached at the pre-ICO stage.

Further information on BANKEX is available at:

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