Stellar: The Choice of Chynge
Tags: Blockchain, Financial Inclusion, Stellar, ICO, Fintech

10 Reasons We Built Our Blockchain Project on Stellar

As Chynge embarked on its Initial Coin Offering (ICO) for its blockchain project of a multi-jurisdictional regulatory compliant private distributed ledger for cross-border payments, we reached a technological crossroad when evaluating the appropriate distributed ledger or blockchain to build on. Although Ethereum seemed the default choice with more than three-quarters (77%) of all ICOs, after careful consideration of our business and technology requirements, we committed on the Stellar protocol. Inspired by Late Show with David Letterman (we’re fans, well, at least some of us in the team are 😃), here are our Top Ten reasons that influenced our decision. Also, we get asked about that from time to time so we thought we’ll share it here.

1. Speed-to-Market

Ethereum is a generic blockchain that supports a wide variety of business applications including fine art, fashion and renewable energy. In contrast, the Stellar platform is optimized for financial products and financial institutions. If your blockchain project is not in financial services, then Stellar may not be a product fit, and it may be advisable to execute on Ethereum. However, for the delivery of a money transfer solution on a distributed ledger platform, the speed-to-market for Chynge was faster on Stellar than it would have been on Ethereum. The end-to-end money transfer solution on Stellar may account for an 80% savings in resources including time, money and people as compared to delivering on Ethereum.

2. Superior Performance

Chynge is licensed or in regulatory sandboxes in five markets. Chynge is also applying for licenses in new markets with a heavy focus in Asia-Pacific. The Chynge business scales horizontally as new markets are added and vertically as the gross transaction volume (GTV) within each market grows. The Stellar platform has the ability to scale both horizontally and vertically in lock step with the Chynge business while delivering superior performance. The combination of low network latency and the Stellar speed of around 1,000 transactions per second results in fast response times of under five seconds per money transfer transaction. This is a significant benefit to Chynge customers who will experience money transfers within minutes instead of days.

3. Stellar Decentralized Exchange (SDEX)

The Stellar Decentralized Exchange (SDEX) is an inexpensive and reliable exchange for the trading of Stellar-compliant tokens. We found SDEX a key differentiator when considering a distributed ledger platform as well as an easy means for the Chynge community to trade their crypto tokens. SDEX raises the overall confidence to the blockchain community in that Stellar is a holistic solution for creating blockchain projects and seamlessly trading tokens in an open market. Like any other Stellar-compliant token, the Chynge CLPX (previously known as XCLP) Tokens that are sold during the Chynge ICO will be immediately available for trading on SDEX for instant trading and liquidity to other crypto tokens. Stellar demonstrated their commitment to making SDEX a success within the community by offering grants of up to $2 million to partners that can add significant value to SDEX.

4. Lightning Network

Stellar is a public, permission-less distributed ledger and the technology continues to expand with new features. One of the new upcoming features is the Lightning Network scheduled for December 2018 which will allow private transactions on the distributed ledger. This Lightning Network feature is critical for Chynge. As Chynge is regulated and licensed as a money transfer operator in multiple jurisdictions, Chynge is required to comply with data protection, customer privacy, and data sovereignty. Stellar on the Lightning Network allows Chynge to manage a private, permission-based Stellar distributed ledger and therefore, meet these regulatory requirements.

5. Extremely Low Transaction Fees

The vision of Chynge is to perform cross-border money transfers with zero service fees. The business model of Chynge is on extremely low foreign exchange (FX) spreads and that Chynge is a low-margin, high-volume business. The Stellar fee is a fraction of a fraction of a penny, currently at 0.0008 cents per money transfer transaction and this negligibly low fee is easily absorbable within the Chynge thin FX spreads. Thus, the Chynge customer is still able to enjoy zero-fee money transfers.

6. Security and Reliability

The money business is highly regulated due to the social consequences when financial transactions go awry or worse, when financial institutions fail. Customers expect privacy, safety, security, and reliability. The cryptographic signatures of transactions in the Stellar distributed ledger offer security and immutability, and the multiple nodes of Stellar offer fail-over, redundancy, and reliability. The unique feature within Stellar is the combination of wallet address and memo which allows multiple customers to share a single wallet address. This prevents the reverse look up of wallet address to a customer and maintains customer privacy across all Stellar transactions.

7. Partner Ecosystem

Stellar has a built-in ecosystem of technology and business partners from across the globe with a focus on financial services. Technology partners include IBM, Stripe, and Lightyear.io while business partners include ICICI Bank, licensed money transfer operators such as Sendx and Moin, and money transfer platforms such as LaLa World and MoneyMatch. Chynge shall leverage this partner ecosystem to extend our money transfer business reach to markets where Chynge does not hold a regulatory license, and to extend our technology with partners in markets where we hold a license. Chynge participated in the IBM Watson accelerator and will extend this relationship with Stellar. Chynge has licenses in markets with significant migrant workers from India and the Philippines and the partnerships with ICICI Bank and Coin.ph may lead to innovative products or these migrant workers. Leveraging the Stellar Partner ecosystem may allow Chynge customers to benefit from more choices and improved service when sending money.

8. Financial Inclusion

United Nations Sustainable Development Goals

Chynge and Stellar share the common societal values of financial inclusion. Stellar aims to eradicate poverty and maximize the potential of individuals and supports that goal by giving away almost all — 95% — of its currency. Chynge, with the guidance of His Excellency Dato’ Mahdi Rahman, Brunei Ambassador to the United Nations, aligns itself closely with the United Nation Sustainable Development Goals (SDG) 1 and 2 to eradicate extreme poverty and hunger by optimizing technology and business models to include the digital identities of refugees and the distribution of humanitarian aid in addition to the financial inclusion of the unbanked and underbanked. The combination of blockchain technology and crypto currencies have the potential of stemming the leakages of financial resources to better serve the underprivileged and their communities.

9. Market Liquidity

To create an immersive customer experience, Chynge establishes at both ends of the payment corridor as a licensed and regulated money transfer operator. Thus, Chynge matches transactions going both directions, and the ideal state is when transactions on both sides match perfectly. When there is an imbalance in transactions, market liquidity compensates the difference to achieve perfect matches. Chynge creates Chynge Liquidity Pools to provide this market liquidity for perfect matching. In the unlikely event that there is insufficient liquidity in the Chynge Liquidity Pools, then Chynge shall failover to the market liquidity provided by Stellar anchor partners. This ensures that there is always liquidity available to Chynge customers either directly through Chynge or indirectly through Stellar, thus increasing the throughput of Chynge payments.

10. Regulatory Compliance

Money is based on trust, safety, and privacy, and the money transfer business is highly regulated. Livelihoods get hurt when things go wrong. Chynge works very closely with regulators to ensure safety, and earn the trust of our customers. There are thousands of FinTechs across the world but we are one of several that are licensed, and only one of a few that are licensed in multiple countries. Chynge shall join the Stellar partner network of anchors and validators to increase market liquidity and decrease market risks respectively. Chynge, with its network of licenses, shall implement customer due diligence including E-KYC, and transaction surveillance to mitigate risks related to money laundering, terrorism financing, and fraud.

There you have it, our all 10 reasons for choosing Stellar. Let us know what you think below.