FIAT currencies are the main medium of exchange in international Trade Finance. Because they are managed by central authorities and opaquely processed by opportunistic private institutions that struggle to reach an
end-to-end transactional consensus efficiently, the related FX alongside the related fees are known to be a burden to cost-efficiency for both buy-side and sell-side. Some crypto-currencies such as Bitcoin have become viable
alternatives but the high volatility and the associated speculative risks make them ineligible as a proper medium of exchange for serious Trade Finance.
AXenS aims at providing the International Trade Finance eco-system with more FX stability and non-aggressive volatility in multiple-currency transactions. AXS is set to become the common medium for peer-to-peer exchanges and trade services. Not only will AXS fix the cost-efficiency
issue by being operated on blockchain but it will also increase the overall velocity of exchanges since, as a store of value, it can be securely controlled by the Self-Executable Agreement/Smart Contract business logic that runs transparently, systematically and consensually on blockchain without human intervention.
Each member of the AXS community of owners will also be granted a right to vote in critical aspects of the AXS regulation.
A Reference Value Index for AXS
The AXS Reference Value Index valuation principle is similar to that of the US Dollar Index DXY. Whereas DXY is a weighted mean of the USD’s value relative to 6 selected currencies, the AXS Index is a weighted mean of the exchange amounts against the 5 most exchanged values in the index (the current expectation is that possible index constituents would be comprised of fiat currencies and other crypto-currencies) at the outset with the possibility of rebalancing the index constituents and relative values at pre-specified time periods. To construct the AXS Value Basket Index, 4 initial parameters need to be determined:
01 // Start date
02 // Selection rule for the values in the basket
03 // Assignment of weights to those values
04 // Prices of AXS at the start date
Start date, base prices, initial basket of values and weights
The decision has been taken to start the AXS Index at the beginning of the ICO period. Prices in accepted currencies will be fixed and published at the actual ICO start date.
The initial basket of values will be composed of the 5 most used currencies during the ICO period.
The initial weight assigned to each selected currency will be determined according to the relative volume of AXS distributed against that currency at the end the ICO period.
At the opening of the AXS trading market, e.g. at the end of the ICO period, the AXS initial index will be published as a base 100.
Selection rule for the values in the basket
The accumulated volume of exchange for each accepted value is updated at each AXS ledger block confirmation, taking into account all ownership transfers of AXS involving an offsetting amount denominated in that value unit of account.
The AXS index will be calculated by selecting the 5 most exchanged values, ranked by accumulated volume. The weight assigned to each selected value will be determined according to the relative accumulated volume of AXS exchanged against that value since the opening of the AXS trading market.
The Reference Index gives us an indication of the relative value of AXS against the most traded (against AXS) fiat and cryptocurrencies. As such, the index shows us the supply and demand ratio across a spectrum of currencies.
