Intro
What is in front of all of us, but no one can see? The future.
What a month it has been in the crypto space and the world at large since I wrote my last Founder’s Update in mid-April. Some of the events we’ve witnessed over the past weeks surprised many so-called experts.
In the first three weeks of May, the industry has undoubtedly succumbed to some long-held stereotypes such as its volatility, tumultuous nature and unpredictability. We have also seen the manifestation of something that I have repeated time and again through blogs, AMAs, media interviews and other forums because I believe it is one of the most crucial roadblocks that this industry must overcome: projects fueled by hype that do not offer their participants any use case, utility or real, fundamental long-term benefit continue to create undue risk for all involved. This idea has never been more relevant given the monumental recent collapse of Terra following the de-pegging of its UST “stablecoin,” which is now hovering somewhere around $0.05. The project’s other token, LUNA, also fell in spectacular fashion simultaneously, dropping from an all-time high of $119 USD to today where it sits at a small fraction of one penny per coin. While major backers certainly suffered cataclysmic losses, as per usual it was retail investors and individuals that were largely left holding the bag as the fourth-largest cryptocurrency by market cap fell by the wayside.
It is quite ironic that the growing popularity of the cryptocurrency space led to the advent of stablecoins. Cryptocurrencies were brought to market to develop protection against the devaluation of fiat currency, but most stablecoins peg their value to a fiat currency which seems to go against the whole purpose.
Certain stablecoins in the market present themselves as being theoretically backed by US dollars via an internally managed, and often not transparent, treasury. Although how much backing they each actually have has come into question, the concept remains simple in terms of one of these USD-pegged stablecoins being equal to one actual US dollar. However, notwithstanding the various potential problems connected to these treasury-backed stablecoins, an algorithmic stablecoin like UST is backed by nothing except the dreams that fairytales are made of.
Interestingly enough, just like with fiat currency, what led to the demise of Terra (LUNA) was a classic case of hyperinflation.
Taking a step back to get the full picture, the algorithm for UST maintained its peg to the USD by regulating the supply of UST. So if demand for UST went up, which in turn would cause the price to go up, more UST would always be minted to increase the supply to bring the price back down and restore the peg. In this system, the reverse would then also be true. If the demand for UST went down, then the supply of UST would also decrease which should theoretically have restored the peg.
This starts to sound a lot like how fiat currencies work. Ultimately, you need something else to create the catalyst to reach equilibrium. This is where LUNA came in, and why there is an inherent relationship between UST and LUNA.
If UST were to go up by 5%, it creates a theoretical arbitrage opportunity because you could buy (borrow to buy) $1 worth of LUNA to convert into 1 UST. That UST is then sold for 1.05, leaving you with $0.05 of profit. More and more people taking advantage of the arbitrage would cause more UST to be minted, thereby decreasing the price so the peg could be restored. If UST went down by 5%, one could buy 1 UST and exchange it for 1 LUNA. That LUNA could then be sold for a tidy $0.05 profit. All this selling of UST would cause the supply to go down which in turn would increase the value to once again restore the peg.
However, what would happen if both UST and LUNA went down at the same time? The earlier arbitrage would no longer exist as there would be no incentive to convert UST into LUNA. So there is no mechanism in place to restore the peg. And this is exactly what was seen happening in real-time.
Terra (LUNA) and UST might have actually had a chance if what people were exchanging UST for had some semblance of real-world utility, meaning there would be the possibility of gaining tangible value from it. But this was a case where one asset that has no intrinsic value was pegged to an equally valueless and volatile asset.
This appears to have been a big house of cards. As aforementioned, the value of UST and LUNA were inextricably linked. The more the LUNA price went up, the more it could be used to collateralize UST. This created a positive feedback loop. As long as UST remained dollar-pegged and LUNA was going up or remained stable, things would be fine. But if the price of LUNA went down the reverse would be true as UST would begin to fall apart, leading to a negative feedback loop.
The more that UST went down, the more LUNA tokens had to be minted. All this did was cause LUNA to crash more, leading to UST holders having even less belief the peg could ever be restored. This then led to more selling pressure for UST causing even more LUNA to be minted — a classic death spiral of currency devaluation brought on by hyperinflation.
The fall of Terra is a stark reminder to never chase hype plays or become over-leveraged within projects that do not have sustainable models and are not built and structured for the long term. While Do Kwon’s Terra experiment coming to an abrupt end certainly captured headlines, it was far from the only piece of news over the past four weeks that spoke to the rocky state of today’s market. There continue to be major barriers to global adoption of cryptocurrencies that need to be rectified in order to move forward in a significant way.
Most cryptocurrencies in the industry have similar problems because they have no fundamental purpose other than to continue existing. Bitcoin remains the poster child for the cryptocurrency space but continues to be a highly volatile, speculative instrument that is not productive in any way, shape or form, nor is it an efficient way to send money. Bitcoin is down nearly 60% from its all-time high during a period where we are seeing near record inflation figures. That does not sound like a good store of value. This leaves maximalists like El Salvador President Nayib Bukele to continue to “buy the dip” over and over again during downturns, feeding a vicious cycle that ultimately leaves millions in a more precarious position than they started in. Crypto media hopped on recent comments by FTX’s Sam Bankman-Fried that Bitcoin is, in fact, “not a payments network and it is [also] not a scaling network.” In truth, this reality has already been long-established and virtually ensures that if Bitcoin were to remain in its role as leader in the market it will significantly cap the industry moving forward. This inherent lack of utility alongside its continued destructive environmental impact, perpetuation of wealth concentration and other red flags means that Bitcoin simply cannot represent the future of this space.
Alongside Bitcoin, other popular projects have also been showing glaring chinks in their “digital armor.” Solana, which had a real opportunity to make some noise as an alternative to Terra during the latter’s collapse, continues to be mired by major technological issues on its blockchain. Most have lost count of how many times Solana has gone down due to congestion and tech issues — ranging from intermittent drop-offs to some that have lasted up to nearly a full 24 hours. According to Business Insider, the blockchain went down a whopping six times in January alone this year. Polygon has also been suffering from the same issues. If the networks cannot be trusted to remain stable with their current user bases, how does they plan to scale over time?
The Ethereum network which is known for running software called smart contracts has now become completely unusable for anyone except those who already are in a position of wealth and can afford the gas fees to transact across the network. Ironically this occurs because too many people want to use it.
If cryptocurrencies are really supposed to be about breaking down barriers and giving access to opportunities for a better future for everyone, then Ethereum seems to be failing thus far. It is one of the least inclusive or democratic systems around. Those who control the network are those who can afford the expensive mining gear, real estate, and raw power to mine Ethereum — similar to Bitcoin. And the more people use it, the more expensive it gets, which clearly excludes more and more people until the ones who participate are either already rich or experiencing financial hardship with every single transaction and every bit of information that is exchanged. This does not even take into account how slowly that information is exchanged.
All of this speaks nothing of memecoins like Dogecoin and Shiba Inu, and many NFTs that have zero real world utility in their own rights.
These are just some examples that highlight the fact that there are so many remaining issues with those currently at the apex of this industry.
Of course, none of what I am highlighting here is intended in any way to diminish any of the hard work and dedication to progress that is being undertaken across this space . Each and every day there are tens of thousands of talented individuals utilizing blockchain technology globally to try to develop solutions to the highly unsustainable state of the traditional finance industry. However, before we look too far into the future, it’s a useful exercise to examine what’s happened in the past.
Looking at the past for clues
In the 90’s there was a new, innovative, and highly transformational technology that would change our lives for decades to come called the internet. One issue that arose for supporters and those interested in becoming involved in a significant way was that no one could buy the internet itself. So, to get into the industry one would have to speculate on internet-related companies.
At that time just saying you were in the industry meant a valuation that could soar seemingly to infinity—business model be damned, the internet was the future.
Well, eventually reality will come like a punch in the face. If there is no real world utility, if the asset or company isn’t productive and no fundamental value is realized then the speculative bubble that has formed is going to blow.
The dot-com crash brought down the entire market and because people acted based on greed on the way up and fear on the way down, even the productive companies were brought down by blindness of emotion.
Amazon at that time went down approximately 95% from its all-time high.
We too often suffer from being prisoners of the moment. There is the illusion of stability, but it is an illusion because change is the constant.
The technology of today is blockchain. The benefits, logistics and mechanisms behind it can change the global economy and bring us to a new age.
Similarly to how you couldn’t buy the internet, you can’t buy the blockchain. This is where another key innovation came about — digital currencies. In the same vein as the internet boom and bust, most of the digital currencies of today will disappear in the future. But it is important to stay vigilant to recognize the few that can stand out and change the world just like how Amazon has.
When looking back at the Savings and Loans Crisis of the 80’s, the dot-com crash in the early 2000’s, the Housing Crisis of 2007- 2009 and now the ‘Crypto Winter,’ they all have one thing in common: what may start out as a good thing eventually gets saturated and diluted as it is fueled by hype and speculation. Unfortunately on top of this through all these incidents many ne’er-do-wells or charlatans also come out to take advantage and feast on the unsuspecting.
There does seem to be a clear pattern here, however. Based on this simple observation of history it seems like having too much of a good thing really winds up being, well, too much. Instead of pursuing more and more of a good thing to the point of excess, perhaps creating greater and greater scarcity of a good thing is the way to go.
If an asset becomes too abundant, its value can eventually drops to zero. This is why water and oxygen cost nothing despite being crucial for survival.
So the answer is clear; less is more.
As long as that whatever you have less of also comes with real-world utility and the required fundamentals behind it.
In the past, I have covered issues like rampant inflation and a lack of productivity in our economy — issues which we are all well aware of and I will not expand on any further in today’s blog, but it is important to always keep in perspective as to the why AXIA was launched, and what we are trying to accomplish. With that being said, let’s jump into why I believe AXIA is real in ways that most of today’s projects are not, and what I think we can accomplish in the near term and in the future.
AXIA as a short and long-term solution
It has been a very iterative process since the inception of AXIA. However, there has always been the aim to answer three crucial questions:
#1 — Does the project have an unfair advantage?
YES!
The AXIA Network, is a more inclusive blockchain network that offers many advantages over industry alternatives, such as:
- Hyper-deflationary tokenomics — Being the first network with this highly unique economic design can deliver favorable rewards to participants across the ecosystem, thereby delivering a more sound structure as compared to what exists in the market today.
- A high rate of inclusivity —A lasting commitment to the removal of barriers to entry to bring blockchain technology to the masses.
- Mobile Staking — Providing the ability for anyone with a smartphone or other electronic devices to become part of the network and generate more favorable rewards themselves.
- Higher levels of decentralization — Steps are continuously being taken to expand the project’s decentralized nature more and more over time.
- Energy efficiency — Not like Bitcoin and Ethereum, which destroy the earth.
- Interoperability — Ability to scale in new and unprecedented ways.
- Low fees (which are burned) — adding value rather than subtracting it.
- Higher throughput — lowering congestion.
- Scalability — not limiting the amount of people who can be part of the consensus.
- Real world utility — across a vast of array of industries and use cases.
#2 — If the project succeeds, is the world a better place?
YES!
AXIA has been built to be a solution to a number of the problems impacting the world today. It is a non-profit that is striving to, above all, provide long-lasting and sustainable positive impact and change things for the better for people all around the world. AXIA offers a next generation network and an ever expanding ecosystem.
#3 — If the project succeeds could it make a significant positive economic impact on the world?
YES!
The AXIA Network has been specifically designed to be the most inclusive blockchain network to-date. It will immediately be able to open the door to millions — if not billions — of people around the world, who will not only be able to gain the advantages that come from being a part of AXIA, but also bring accessibility to blockchain technology to the mainstream.
Some incredibly exciting and impactful developments have taken place at AXIA since my last Founder’s Update.
First and foremost, the AXIA Network was launched after years of development and hard work on the part of the project’s talented global team of contributors. I will not dive too far into the story of the AXIA Network today as it was covered at length in my April Founder’s Update and the follow-up AXIA 101 blog post on the launch. However, I will reiterate that this launch now paves the way for AXIA to roll out a number of key applications, products and platforms that can help bring its hyper-deflationary economic model and the associated value-driven benefits and rewards to the world at large.
It’s important to note that the fact that AXIA has already pre-developed some of the primary platforms that will go live during the early stage of the network is a key differentiator between AXIA and other projects in this space. While most networks rely almost purely on external development, the AXIA Network will have a variety of use-cases and live platforms in the very near term and will not be nearly as reliant on third-parties as alternatives during the blockchain’s genesis phase.
It should also be noted that whereas other network coins are native only for the network and serve limited to no other utility, AXIA Coin has a significant amount of utility and can be used across a wide spectrum of uses cases, as well as a preferred medium of exchange based on a superior technological and economic design.
The AXIA Network is undergoing its post-launch security audit and materials on how to become a Validator/Nominator on the network, participate in Mobile Staking and other key documentation will be released in the very near future.
All decisions that are undertaken by the project are ultimately implemented because they are what is in the best long-term interest of the AXIA Community. All key decisions related to AXIA have always — and will continue to — prioritize its community of tight-knit supporters around the world. Now that the AXIA Network has launched, it is another great opportunity to once again thank all of the AXIANS out there for your continued support and participation with the project.
At this point, I want to dig into why I believe AXIA is positioning itself to provide a productive, long-term solution that can deliver rewards and benefits to billions of people around the world.
As I alluded to earlier, there are a series of products and platforms that are nearing launch on the AXIA Network. Included in this is AXpay (global payments processing), AXclusive (NFT platform), AXshop (e-commerce platform for building both an online and offline store), AXelerator (token launchpad, incubator and decentralized marketplace for both the tech and non-tech savvy), AXC Domains (personalized AXIA domains for wallets, websites, etc.) and AXIA Tel (encrypted smartphones with cost-effective global data plans). All of these platforms and offerings are either ready for launch and going live in the coming few weeks, or are in the final stages of testing and will be launched shortly thereafter. These key platforms will establish real, fundamental value and utility for the AXIA Ecosystem and can drive significant awareness and user acquisition for the project as a whole.
AXpay is one of the most exciting developments to come to this project in recent memory alongside the network itself. It will operate in a similar manner to Google or Apple Pay, but it will process payments in AXIA Coin and truly enable the project to begin to bridge the worlds of crypto and traditional finance for both businesses and individuals. Highly customizable and easily programmable Loyalty Rewards Programs will also be part of the platform, creating a win-win situation for merchants and their consumers that will only grow over time. The app is slated for imminent launch, with a series of partner businesses and customers set for onboarding in June. AXpay will bring in a broad group of people and businesses to the ecosystem as a brand new and 100% free enterprise product.
Now, instead of having a one-way relationship between customers and businesses, both can benefit from the power of the crowd. The customer benefits not just from all the other shoppers at that store, but all activity across the decentralized AXIA Network and AXIA Ecosystem — activity that is completely unrelated to themselves. This can generate greater rewards for the customer which can in turn augment the loyalty given by the customer. The business gains from the crowd even more with the AXIA Loyalty Program, because without investing time or additional expense, the business can now gain from activity outside of their involvement from the decentralized actions across the AXIA Network and the benefits of hyper-deflationary AXIA Coin. AXIA can also assist with more efficient and cost-effective transaction processing.
AXclusive, AXswap, AXshop and AXelerator will follow the launch of AXpay and will all be integrated with the payments processing system. Each one of these platforms will drive additional utility and create added use-cases and practicality for AXIA and all participants in the AXIA community. AXclusive will bring cultural currency to the project and onboard artists, developers, collectors, musicians, DAOs and other groups into the fold as well as be an NFT platform that focuses on key business use cases like copyrights, patent protection, IP rights, etc.
AXswap will help to create a more favorable trading environment for AXIANS and bring serious crypto evangelists, traders, liquidity providers and more to the ecosystem.
AXshop is an e-commerce platform that allows users to set up, manage and grow an online business to sell their products or services. One can fully customize their store for their particular needs.
AXelerator is another vital platform to AXIA as it will create a setting in which developers, entrepreneurs, new projects and tokens, innovation and new ideas can flourish while bringing in new participants and supporters on a regular, ongoing basis to the AXIA Network.
Another exciting development I am able to share today is the forthcoming inclusion of AXC domains into the AXIA Ecosystem. As we’ve seen in alternate versions, this tool can become an important and practical item in any crypto ecosystem as they can feed into many different facets of a project. These domains generate rewards, excitement and content creation for NFT sites and users, help individuals unite their WEB3 identities across platforms and wallets, and are innovative ways to connect online digital identities while also providing a high level of privacy, security and autonomy.
The near-term launch of these platforms as well as many more already positions AXIA far ahead of where competing projects were when they initially launched their own chains. Alongside these launches, the AXIA Network will soon open up for public Validators, Nominators and other participants. The highly favorable tokenomics of AXIA and the advantageous structures that have been developed for these participants will continue to help AXIA become increasingly decentralized and, again, drive user onboarding around the globe in the coming months.
The point that I am getting to with all of this is this: AXIA is REAL!
Soon, much of the preparation and work being done behind the scenes to position the project as a long-term force to be reckoned with will come into focus. This is what the AXIA team has been building towards and it’s nearly time for AXIA to have its true ‘coming out party’ in this space.
Of course, outside of the network itself AXIA has also continued to take important steps to ensure it is constantly adding utility and fundamental value to its ecosystem. Privacy is a universal right and AXIA is helping pioneer the concept of WEB3, data ownership and online privacy through its Use-to-Earn apps. Just last week, AXshield went live in the AXplorer browser, which allows users to browse by proxy to avoid being targeted online by would-be sleuths, bad actors or other unwanted trackers. Next month, the full AXshield VPN will be going live for all AXIA participants, allowing them to cloak all their online activities outside of just their browser activity. AXIA does not provide data access to third-parties like the Googles of the world, but instead provides the means for a more safe, secure online experience while also allowing users to earn hyper-deflationary AXIA Coin rewards daily — all 100% free of charge.
Now is an exciting time to announce the forthcoming launch of the third Use-to-Earn app from AXIA: AXpress. The app will allow users to engage in online microblogging and, of course, users will be rewarded for basic activity with daily AXIA Coin rewards, compounding the rewards generation into a third platform. The app will be released in Q2. Watch out for more news on this in the very near future.
Every action taken, every platform developed and every product unveiled by the AXIA team is always adding another part to the sum. However, as we know due to the decentralization of the AXIA Network and the project’s hyper-deflationary economics, the whole is greater than the sum of its parts. These pieces all complement one another to make up a continuously expanding ecosystem that adds more value, utility and use-cases to the project on an ongoing basis. This is what sets AXIA apart from other projects fueled by hype and unsustainable models; AXIA is engineered for long-term growth, success and the velocity with which the ecosystem can expand and grow with time just builds as more platforms are unveiled. All the while, a hyper-deflationary currency, AXIA Coin, becomes more scarce throughout the process which is to the benefit of all participants — who are already benefiting from the variety of use cases and platforms within the ecosystem itself.
Conclusion
AXIA has and will always be playing the long game. It now has a fully licensed digital bank running the most favorable staking program in the space, its own network (and all of the platforms launching on top of it in the near-term), a variety of Use-to-Earn apps increasing privacy and data protection for its users, and many other items in the pipeline for the rest of this year.
The Official AXIA Project Roadmap will be going live on AXIA.global this week. It will highlight many of the product releases I have mentioned here, as well as some other exciting developments that many of you may not yet even know about as many were not mentioned here. The team is looking forward to unveiling a clear guide for those who have a desire to truly grasp and understand the path that the project is taking to establish itself as the most real, value-driven project in this space.
I have never been motivated by fortune or any kind recognition. This biggest motivator has and remains curiosity. I have a constant wonder about how things are put together, why things are the way they are and from that, if a better way is possible.
AXIA was born out of the deficiencies observed in a variety of areas, in a variety of markets. AXIA strives to be above all a solution to those deficiencies and the possible cure to what ails the market. I believe this project can get there by providing the world a scalable, efficient, cost effective, inclusive network with a superior economic design that has real utility for the world we live in today and what it will grow into in the future.
No one can predict that future, but one thing that I do know is that myself and all the incredible people on this global team will continue to work day and night, display the needed intellectual humility and ignore the day-to-day noise while we continue to build, grow and persevere through whatever may come our way to effect change in a positive way to as many people as possible around the world. Our success will be based on the progressive realization of what we deem to be a worthy ideal. We can all see a world infected with so many problems, but they are solvable if we don’t chase numbers, but instead focus on the process of creating value for others.
I again want to repeat my thanks to the global community for your support and dedication. Everything AXIA is doing and everything it is all about is because of you. Some exciting times are right around the corner for this project and soon will be the period where AXIA can really begin to onboard new users, provide the utility and value for the entire ecosystem, and highlight to millions around the world that there really is a better way to move into the future.
The recent downturn will expose the projects and cryptocurrencies that don’t have the real-world utility which is so desperately needed for the long-term viability of the industry. As AXIA and all the AXIANs out there can now set course towards a better path ahead, it will be left up to the jury of the public to decide who the real leaders of the industry will be in this space as we move forward and collectively aim to achieve a more impactful, sustainable, positive and rewarding future.
