VISION AND OVERVIEW - Alprockz Whitepaper — Chapter 1
The first part of our whitepaper outlines what problem ROCKZ solves and how.
PROBLEM STATEMENT
Traders and investors engaging in the cryptosphere today must learn to live with certain risks. There is currently no reference or reserve currency that satisfactorily mitigates these risks. This means that, for the time being, the only safe way for crypto investors to secure their profits is to return to fiat currency and thereby exit the cryptosphere.
This identifies an inherent tension that, if left unsolved, will inhibit the future growth of the cryptosphere as an asset class.
Let’s examine the nature of the risks at play.
Investors can leave fiat currency in certain exchanges, but will bear a counterparty risk since most of the exchanges are unregulated. Unregulated exchanges are effectively the owners of the assets deposited by their clients, be they fiat or coins. In case of bankruptcy, fraud or, (self-declared) hacking, those assets are completely at the risk of being lost. There are a few regulated exchanges that do protect deposits, but only to a certain limit, based on country protection schemes. At best, there are only limited protections for anyone depositing assets into exchanges.
On top of that, there is a huge security risk, with many exchanges having been hacked during the last few years. Hundreds of millions of dollars were stolen in 2017, and in cases so far in 2018, we have seen the total number of stolen assets reach alarming levels4 . When coins and tokens are held at centralized exchanges, investors’ assets can disappear within seconds, and typically are never recovered. It has happened and will happen again.
Of course investors can, with some know-how and at additional cost, transfer their crypto investments to cold wallets in order to mitigate some security risks. Nevertheless, cold wallets do not erase the market risk of holding main coins used as a pivot or reserve, such as Bitcoin or Ethereum. These main coins still bear extreme volatility and therefore do not eradicate all risks for investors.
Finally, crypto investors who are willing to take profits out of the system, be it on a temporary basis before entering a new position, or on a permanent basis, incur high fees and time delays6. While a fiat payment takes only a few seconds to be made in most countries, transferring cash out of the cryptosphere can take days or weeks before being completed. During this time, crypto investors bear market, counterparty, and security risks.
There are some options to partially minimize these industry risks, especially market risk, such as by the use of stablecoins, which, being backed by «classic» assets (like cash or gold), are relatively stable. However these solutions may also have their own shortcomings. For example, the most popular stablecoin, Tether, which now has more than $2.9 billion in daily trading volume, is still not the best choice in terms of transparency. It was suspected to have a shortfall problem in a reserves audit, and moreover, of taking part in possible cryptocurrency market manipulations7.
Compared to the ease of entering the cryptosphere as an investor, making a pause between investments or going out of the cryptosphere can be costly, risky and complicated.
THE SOLUTION
ROCKZ addresses a major shortcoming of the cryptosphere: the lack of a trustworthy anchor in the traditional economy — a way to book profits while still staying in crypto; a way to address counterparty, security, and market risks.
Institutional investors, such as funds, insurance companies or pension funds, are willing to enter this new asset class, which is decorrelated from traditional investments. But to penetrate this new asset class they need a point of reference, a safe harbour, a reserve coin. This is ROCKZ.
The ROCKZ issuing company enables investors and traders to exchange their main crypto currencies against a ROCKZ. For each ROCKZ issued, 1 Swiss Franc (CHF) is held by the ROCKZ issuing company for the account of the coin holders. By definition, ROCKZ is stable.
The ROCKZ issuing company holds up to 90% of its reserves in Swiss Francs (the Reserves) in physical paper form (i.e., banknotes) which are deposited in high-security Swiss Alp Bunkers and Vaults. The remaining 10% is held with various Swiss Banks to ensure short-term availability of the Swiss Francs. ROCKZ is solid and agile.
The Reserves are held by the ROCKZ issuing company under a fiduciary mandate and are segregated from the company’s operating accounts. Even in the case of bankruptcy of the ROCKZ issuing company, ROCKZ coin holders still have full access to their Swiss Franc fiat reserves. ROCKZ holders are protected.
The ROCKZ issuing company is building a rigorous and robust legal framework which ensures that ROCKZ is effectively backed by the reserves of Swiss Francs and that claims are legally enforceable. ROCKZ is reliable.
ROCKZ is pioneering and fostering a new level of adoption for crypto enthusiasts and investors. ROCKZ erases the main crypto market risk by backing the coin to one of the most stable currencies, thereby reducing counterparty risk to a minimum. No other coin offers this level of protection.
Learn more: https://alprockz.io/
Join Our community: https://t.me/ROCKZchat
