FUnderstanding Token Economy: Zhang Jian and His FCoin

Dear Community:

Thanks for your support all along, according to the media online interview of the CEO of FCoin — -Jian Zhang on July 23rd, we have quoted some decent points and made an analysis to make an better understanding of the interview.

Q1: FCoin released many notices recently and raised some new concepts. Mr. Zhang, please tell us about FCandy first. FCoin will return FCandy instead of FT in the future. What does that mean? Where do you think FCandy’s value lies? What’s the price expectation for it?

A1: FCandy is actually an asset pool, and we put a lot of FTs there in the initial stage. I say “put” because it’s actually asset donation, and its value, or the initial intention of the design, is to let the community users enjoy the free benefits. Based on the tokens you put in the pool, a proportionate amount of FCandy will be issued at a discount, and what’s interesting is that the issued FCandy doesn’t belong to the token putter, but to FCoin’s community users. Please see the notices for the way of putting and distribution. It’s wrong to say that we won’t return FT in the future. The handling fee remains 100% and FT will be returned. This strategy won’t change. FCandy is returned for mining activities of non auto-trader, and its price and value can be calculated according to information on the homepage. The price expectation is high in the long term, not in the near term. It takes time.

Q2: What are the latest rules on token issuance? Does the newly launched FOne transaction community delegate the token-issuing right to sponsor institutions? What are the standards for selecting those institutions? How do they differ from those sponsor institutions in the stock market in terms of duty and responsibility?

A2: The latest token-issuing rules indeed have some major changes. That’s the FOne we launched. It was put forth for two reasons. First, the Growth Enterprises Market (GEM) is under a lot of pressure and the huge amount of projects lined up for application is far beyond our expectation and the exchange’s service capacity. Second, the GEM itself has no sponsoring ability and cannot determine whether the project is good or not. Duty and responsibility are very important here. Sponsor institutions have their special zone and are responsible for project supervision to guarantee their quality. In their special zone, they have the right of token issuance and rule formulation, while FCoin only provides underlying services for them. The intention of FOne is to find better projects through supervision and screening, further expand FCoin’s ecosystem and brand, and realize sound growth. At present, we mainly choose mainstream Token Funds and will enlarge the scope later. As to the standard, we widen the entrance but strictly control the exit. Any reputed Token Fund is welcome to be our sponsor institution, but the selection and review afterwards will be rigorous. The ecosystem of the token industry isn’t mature enough and many things are mingled together at the moment. We are trying to bring in mature models to the chaos step by step, and we will progress little by little. But the application is open today. Any institution can apply as long as it fits the conditions.

Q3: Is FOne FCoin’s experimental zone for reverse ICO? How is it different from the token-issuing mechanism and circulation mechanism on main board A and B? If a mature product or enterprise wants to carry out reverse ICO, what are the biggest difficulties and challenges? Are there successful cases? For a mature enterprise, whether token issuance conforms to the law is a sensitive topic, and will this be one of the main obstacles to the reverse ICO experiment? How will you solve this problem? In which industries do you think the mature enterprises will take the lead in succeeding in the reverse ICO experiment?

A3: Definitely not. First of all, reverse ICO happens on main board C. Now we have main board A and B. A features mature blockchain projects, B includes emerging blockchain projects, and C focuses on reserve ICO. To be exact, FOne is the successor of GEM and it will be positioned to specifically support startup projects, while GEM is responsible for growth projects. The difficulty of reverse ICO depends on several factors — project preparations, qualifications, and the maturity of business model and business scenario. To put it another way, reverse ICO applies to two types of enterprises — those with well-prepared mature models and ordinary ones that have mature business model but no concept of token and consensus. Reverse ICO isn’t difficult for the first type, but for the second type, token economy conflicts greatly with their old model. Besides, it takes a lot of efforts to communicate the design, original interest distribution, shareholder structure and resources of the whole token economy model, and a consensus can only be reached if the enterprise is resolve to upgrade its perception. As to compliance, the more subversive something is, the more sensitive it is. We are looking at tremendous changes. Token economy actually changes the market relation. That’s a challenge we cannot circumvent. As the future trend, token economy is bound to encounter strong resistance in the early stage of growth, but we’ve pressed ahead together nonetheless. Don’t you see? I think enterprises in the Internet and financial industries will take the lead in succeeding in the reverse ICO experiment.

Q4: Many organizations are dabbling in blockchain + insurance, but this approach hasn’t been widely applied so far. Is the new insurance community FInsur just a stunt? Is “insurance is mining” a benefit offered by the platform to attract users, or an insurance mutual assistance in the real sense that’s based on blockchain technology?

A4: It’s not a stunt. Customers at FCoin are both traders and the core concept of token economy. We make traders “shareholders”, likewise, we make insurance applicants the “shareholders” of insurance companies, and they have consistent rather than opposite interests. In fact, the absence of insurance in the digital currency industry is something terrible. FInsur is something that FCoin has to do. The token circle has seen frequent security accidents, and we must give the users a guarantee. It’s not a stunt. FInsur will be a landmark innovation in the industry and will create immense benefits for users.

Q5: What hidden or public rules has FCoin changed?

A5: Hidden rules, HAHAHAHA (long laughter). Data are completely transparent with us. The exchange homepage is its own transaction record, from which we can see the daily profits. We are doing this because 80% of the profits will be returned to the community members, so information has to be made public and then it cannot be forged. This conforms to the initial intention of blockchain. These will challenge the hidden and public rules in the industry. Some people say we make exorbitant profits, but at least we return 80% of the profits. The change that this model will bring to the industry has just begun. Just wait and see.