FCoin | an Exchange for the People!
By: Jose Cerqueira
Tags: Cryptocurrency, Blockchain, ICO, Ico Review, Bitcoin

“FCoin is the world’s first transparent digital asset trading platform with assets, and will distribute 80% of the revenue to FT holders on schedule.”

co-authored by James Ruocco

Team

Zhang Jian | Founder

Zipper Foundation | Founder

Bochen Technology | Founder

Huobi | VP of Technology — CTO

Director of Digital Currency & Blockchain Research Center

Qukuai.com | Founder

First BTC Blockchain Explorer in China

QuickWallet | Creator

Earliest BTC Multi-Signature wallet in China

Author of “Blockchain: Defining The Future Finance and Economic Landscape”

This is not an ICO. We are supposed to only focus on ICOs, but hey, this is a new project worth mentioning and they are still in Beta. Unlike other reviews, it should be noted that we do not know a lot about the whole team. The only public info we have found on the team has been pasted below:

“FCoin is developed by a top-notch international team independently. The core team of the FCoin community consists of people from world-recognized companies who have considerable experience in both Wall Street and crypto finance companies.”

Since we do not have the privilege of knowing the rest of the team; we decided to showcase the previous investments of the VC firms. Judging a project by the previous successes of its investors is not the best way to do things. But, looking at past investment decisions can give us a good idea of the investors’ judgement.

Investors | Undisclosed amount

DHVC

Origin Protocol, Open Platform, Hedera HashGraph, Certik, Mainframe, IOS, Basis, Polychain Capital

Node Capital

Gems, IOS, Hashgard, Bibox, Aelf, Gifto, Huobi, Zilliqa

Singer Capital

8 Decimal Capital

Block Collider, Mainframe, Iotex, Ontology, Bluzelle, Icon, Kyber, 0x, EOS, Raiden, Bibox

Timestamp Capital

Bitrise Capital

Zipper Foundation

The founder, Zhang Jian, has an impressive resume. He has been involved with Bitcoin since the beginning. Zhang created China’s first multi-signature wallet and blockchain explorer for Bitcoin. Personally I never used Huobi, but it is the 4th biggest exchange in volume, so we can assume Zhang did something right.

After Leaving Huobi, Zhang Jian founded Bochen Technology. Last year, Bochen won an award during the 2017 Trusted Blockchain Summit. This Summit is hosted by the China Information and Communication Research Institute and Alliance of Data Center in Beijing. At the same conference, Tangquan Financial Service (TFS) won the award for best Financial use case of DLT technology. TFS created an inter-banking money transfer network (think of Ripple) that connects 10 branches of the PBoc (China’s Central Bank) and over 100 commercial banks. It transacts over 1 billion yuan a day! You may be thinking, okay, cool, but why are you telling me this? Well, because the network was built on Bochen’s L0 DLT technology.

Yes Zhang Jian built a successful explorer, multisig wallet, and one of the world’s largest exchanges, in addition to the tech behind a major DLT network in China. He has succeeded in the past, will FCoin be another feather in his cap?

Why are exchange tokens the safest investments?

Apart from being a simple ERC 20 tokens, these utility tokens are valuable because they are attached to existing companies with extremely large amounts of revenue. In less than a year after its ICO, Binance recorded higher profits than the largest bank in Germany (take it with a grain of salt), turning the Binance founder, CZ, into a billionaire. Maximalists argue that tokens apart from BTC, ETH, & XMR are vaporware. The vast majority of tokens have no real world uses at this time. Exchanges make their tokens valuable by doing the following:

Burning a % of the supply based on their revenues. (deflation)

Paying out dividends to token HODLers based on transaction fees (revenue)

Offering discounts if users opt to pay trading fees with the exchange tokens

Remember this: For Exchanges, Volume is King. When you dump BTC because of FUD, exchanges profit. When you buy the hottest new shilled-coin, exchanges profit. Oh, you want to withdraw your tokens? Exchanges profit. A shilled ICO wants to be listed? Exchanges still profit.

This is why exchange tokens usually appreciate overtime (as long as the exchange remains in business). BIX, BNB, HT, KCS are all top 100 coins and go up even during the hardest bears. These coins can be as robust as America’s alcohol industry. When people are happy, they drink, when people are sad, they drink. Alcohol is known as a “recession proof” business and we would consider exchange tokens to be in similar company.

Note: this does not mean that exchange tokens are immune to the animal spirits. We do believe that exchange tokens behave like & will ultimately become security tokens. And yes this is why we are very bullish on NEX. They are setting a new standard with the FMA (Financial Market Authority).

Why FCoin? (Fun Fact: the F stands for Future)

Open and Transparent

DLT technology will allow users to access the trading data within the FCoin exchange. This will bring a new level of transparency to the space. There have been multiple accusations & conspiracy theories that current exchanges fake volume and engage in insider trading. DLT tech will help validate or debunk these claims.

Community-based Autonomous Organization

Community-based Autonomous Organization is the reason why FCoin has a HUMONGOUS market cap for such a young project (more on this later on) and has been gaining so much hype. FCoin has a flat management structure, with no CEO/Board of directors. It will be “the first autonomous community-based trading platform in the world relying on blockchain technology and the concept of ‘Token Economics’”. The white paper alluded that ‘token economics’ means the following:

Managed by a highly replaceable Community Committee

Every citizen on the ecosystem will be paid in dividends

HODLers will be part of operational decisions via smart contracts

HODLers can participate on the committee election.

80% of FCoin revenue will be distributed back to the HODLers on a daily basis. Yes 80%, at least initially. You can read more about it here.

FCoin is currently in the process of building their ecosystem in a way that allows it to be fully run by the community. Anyone is able to join the management team via their community partner/volunteer program. Further details can be found here.

A Financial-Market-Level Trading System

FCoin has a fast and stable matching engine that supports complex trading orders such as GTT (Good Till Time) , GTC (Good ’Til Canceled), FOK (Fill or Kill), and IOC (Immediate or Cancel). It can handle 2 million transactions per second. For reference, Binance handles 1.4 million TPS.

Security System

Exchanges spend around 17% of their budget on security. They need to fend off both external & internal threats on a consistent basis. This leads to costly external audits & training. Exchanges need to make sure their staff and security procedures/drills are at the forefront of the industry.

In addition to the standard security precautions, FCoin security system includes:

Zero-knowledge orders for unbiased trading. To prevent front-running. Never thought but centralized exchanges can in theory allow certain orders to be filled first.

Multi-signature

95% of the tokens will be in cold wallets (The industry average is around 87% according to this study).

It is rumored that many exchange hacks are inside jobs. The argument does have some logic to back it up, but is still highly speculative. Why would you wait 10 years to make $XX,XXX,XXX. If you can simply stage a hack and cash out via privacy coins? We are not alleging that is a reality; only a possibility.

FT | The Token

Let us apologize for hiding a small detail. FCoin is currently the largest exchange in crypto with a volume of 6BN USD (June 13th) in their USDT/BTC pair alone. To put in perspective, right now CMC is displaying all other exchanges with a combined volume of 5BN USD in BTC. WTF??? Are they faking their volume?!!! Let me explain the reason for this insane volume, high market cap and why it is very risk to purchase this token at the moment.

Token Metrics

Ticker Symbol: FT

Max Supply: 10 BN

Circulating Supply: 446,311,087.48371881 FT

Mining Output of the Previous Day: 20,646,186.30421347 FT

Price: 0.949203 USD

Remember, FCoin is not an ICO, nor did they conduct one. So, who owns the 51% allocation called ‘Community Rewards’? Miners will! FCoin calls it “Trans-Fee Mining”. In essence, new FT tokens are rewarded to traders based on the fees incurred in the exchange. The more you trade, the more tokens you are rewarded. Please note, this is on top of the 80% dividend paid out to those HODLin FT tokens. There is a short freeze period on new FT tokens awarded to prevent ppl from abusing the 80% dividend payout. While hard to believe, FCoin’s payout structure is truly designed to enrich the whole user base and not just the top management like all other exchanges cough… Binance…cough

Depending on who you ask. The trading volume spurred by the payout structure can either be a blessing or a curse. This is because the fees are currently non-existent (you get repaid in FT tokens). People suspect it’s just wash trading/BOTs. Basically, whales trading among themselves to create market activity/mine(amass) the tokens. On the field above “Mining Output of the Previous Day” is the amount of FT tokens created yesterday. In essence, FCoin is gaining 20.5M USD in market cap on a daily basis if the price remains at ~ 1USD. The project is very new, one may ask: how much longer will this price hold up?

FT is currently valued at ~ 500M USD. Once the entire supply is mined, it will be worth around 5BN USD (which will happen in 100 days if the volume remains this high). So please consider that while buying FT tokens to HODL, you will benefit from the 80% revenue dividends, but…if you are not trading, you WILL NOT be “mining” new FT tokens. This will lead to inflation, which means your HODL (dividends) will be worth less everyday. Do not forget that the “Trans-Fee Mining” mechanism ends once all the 5.1BN tokens for the community are given out. Afterwards, traders will no longer be rewarded based on fees, only by HODLin FT tokens.

Community

Twitter | 840 Followers

Medium | 33 Followers

Telegram | 2258 Followers

Verdict

The Founder has an A+ background. It is not easy to build an exchange (still in Beta) that can handle more volume than the whole market combined. Remember guys, their seed round happened only weeks ago. Now, FCoin is the largest exchange in the world (at least for the time being). As the above roadmap shows, it is important to understand that most of the core features have not been released. Some core features include: smart contract governance, committee elections, and data transparency. To be fair, this project is STILL in Beta. We are shocked to see a Beta product perform so well in such a short amount of time.

We are eager for the release of the technical/white paper, public code release, and the rest of the team to be made public. Traders should consider trading a small amount of their holdings on FCoin to “mine” FT. This will allow traders to start receiving dividends. Do not forget that exchanges are all about the team. They are the people responsible of keeping our fortunes safe (most people do not use wallets). Thus, please do your own research before depositing your funds on the exchange/buying FT.

Disclaimer: Our goal is NOT to provide investment advice. We promote projects that can positively affect society and teach our readers how to properly analyze ICOs. This article is a product of the Alpha Community.

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ICO Spreadsheet

https://docs.google.com/spreadsheets/d/1VVxDtrsLdGj4q9yHf_q1ITIciAbRhRca1txGA1qzeOw/edit#gid=172123915

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