FinNexus Weekly-chat Recap 02/03/2020

Veer Singh

Published in

Phoenix Finance

7 min readMar 6, 2020

Participants:

Boris Yang — FinNexus Founder & CEO
https://twitter.com/BorisYangFNX?s=20

Ryan Tian — FinNexus Financial Specialist
https://twitter.com/rainiefield?s=20

Question 1:

Alex n: Going through the ICTO rules, I saw FNX and UM1S. Why employing a dual tokenomics method and what advantage does this have?

Boris Yang: I think it is not dual tokenomics. UM1S is just one of the assets running on FinNexus. We designed by combining them together at the beginning for more options for the holders.

Professor K: It is not dual tokenomics like you see with NEO or ONT or VEN. When the time comes, you will be able to exchange UM1S for stable coins, most likely USDT.

Ryan Tian: There are many reasons for the ICTO model.

Firstly, one of the greatest advantages of ICTO is more choice provided for investors, satisfying the need of investors with different risk preference, Investors of FNX in ICTO are granted a second choice. One may either choose to convert FNX into UM1S, to enjoy a lower risk with fixed returns, or hold FNX to benefit from the future development of FNX.

Secondly, there is a safeguard mechanism provided by the conversion rights, that the price of FNX will hardly drop below the issuance price in the conversion period( 3 months). Which means the investors are always safe.

Third, the conversion will act as the market adjusting mechanism to balance the issuance of the FNX in circulation. The converted FNX will be burnt and cease to exist on the market, which will decrease the final FNX traded. We will let the market decide how much FNX will be left on the market. The burnt mechanism is beneficial to the remaining FNX holders.

Lastly, the ICTO is combined with the launch of FinNexus’ product. It is what FinNexus is always trying to do, to provide products with different risk-return profiles and introduce the real-world value in crypto.

Question 2:

Chota don: Where did you get the idea to create ICTO model for the token sale? How is ICTO better than IEO & ICO. What is the benefit of ICTO because most of the users trust in IEO these days. How do you attract investors through your ICTO model to buy FinNexus?

Boris Yang: We saw there is some problem with IEO and ICO. We want to give change which is better for holders.

When you join IEO/ICO, you can do nothing except for waiting price goes up. Sometimes token would not list for a long time. Sometimes the price goes down. In ICTO you have the option to quit with your money and interest in the period. It means you could make another investment decision after the public sale.

Question 3:

Alexandros: Do you have a strategy regarding countries with regulations that oppose privacy coins?

Ryan Tian: Right now, we have a legal team working on the legislative issues and we will exclude some of the regions if necessary.

Boris Yang: We are trying our best to avoid regulation risk at the beginning and at the same time we are trying to get some license in some region.

Question 4:

Victor: How should the people that want to invest prepare? Or when will these official instructions be available?

Boris Yang: Exchanges account or Wan in Wanwallet.

Question 5:

Sarah_Huang: Since the first paper is for consumer loan assets in SE Asia. This is the first phase of products, what kind of products do you plan to be issue next?

Ryan Tian: Our stakeholders provided us a big package of assets. They all have a very good quality of real-world cash flows. We will release the details one by one in papers for the later stages of products.

Boris Yang: We have already run UM1S before they talk about it. We believed assets-backed token is a very important part of the crypto-world since 2018. Last year we kept finding good assets for tokenization and hence UM1S was born.

Tariq Ali: How is FNX linked to UM1S?

Ryan Tian: Think about it like this, the so-called UM1S is like a stable coin with interest. There will be transactions in a centralized or decentralized way. Rivex’s DEX is almost here. Also, holders of FNX will be benefited more from the returns of the later FinNexus’ products.

Boris Yang: FinNexus get a fee from UM1S/UMxS and share fee to FNX holders. And we are trying to design some combined mechanisms with UMxS in the future.

Professor K: The mechanism will be something like what you see with the stable coin projects these days — KAVA, RSR, LUNA, etc. — where holders of the utility token must do some action — like stake, vote on proposals, etc. — and thus can participate in the fees earned by our tokenized projects.

Question 6:

Tariq Ali: So ICTO is kind of like IEO only I am to get some choice after I am to buy theses FNX coins?

Boris Yang: Yes it is an upgrade of IEO. But not everyone could do ICTO. You should have an option token first. For FinNexus it is UM1S.

Ryan Tian: Choice is one way to call it. The choice is like a safety wire. On one hand, the converted product is safe because of the structure and credit enhancement procedures and we’ll disclose them; on the other hand, it is an effective price protection mechanism, to prevent the case like a massive drop below the issuance price from happening.

Ryan Tian: Two important things in this chart. Firstly, as in the first and the second graph. Due to the burn mechanism of the converted tokens, the supply of the tokens will be greatly decreased in the conversion process, which will push up the price according to the supply-demand curve.

Secondly, the conversion mechanism is like an issuance, or say longing a put option. You can choose to convert anytime in the conversion period, as long as it is not reaching the 80% limit. Arbitraging activities will make sure that the price will not drop below this price floor.

Question 7:

Arnold Larson: What happens if you don’t raise the funds you expect? What is the back plan? Hypothetically

Boris Yang: We have to cut our budget. Also, we will come again to our founding investors Wanchain and SuperAtom for more help. :)

Mike Chan: You mean come what may, the development will continue?

Boris Yang: Yes.

Ryan Tian: The fundraising is not our sole goal by ICTO, that’s why we design the conversion mechanism because the converted FNXs will be paid back with all the principal and interest. In the meantime, it proves that our products and our business model are successful. We have nothing to worry about.

Question 8:

Mike Chan: What if the price of FNX drops by 50%, will I still be able to convert at the ICTO price? And get my investment back in USDT with Interest?

Boris Yang: Yes, Even if the price drops to 0.000001USDT, you can get your money plus interest back by converting. Of course, I don’t see that price plummet is coming:)

Professor K: If you convert within the conversion period, then no worries to you! You can get your money back and even grab a bit of interest!

Ryan Tian: It will hardly drop below 0.1USDT, because when it does, the holders can always hold and convert, then get 0.1USDT + interest back.

Question 10: The ICTO states that up to 80% of the tokens can get burned after the conversion. Is it true?

Boris Yang: It depends on how many tokens will be converted by users. 80% is cap. We think it would be more than 50%.

Ryan Tian: If 80% of the tokens are converted, the 80% will be burnt.

About FinNexus

FinNexus is building an open finance protocol to power hybrid marketplaces that trade both decentralized and traditional financial products. The FNX token will live on the Wanchain blockchain to take advantage of the most robust cross-chain capabilities currently available in the industry. The first products FinNexus plans on releasing will be innovative tokenized assets (available Q1 2020) with value-based on real-world cash flows.