Zap October Update 2019
With the same contracts and usability of the ethereum admin, we have completed and started initial testing of the EOS admin and contracts on the jungle testnet. This means holders of the EOS token will soon be able to use the Zap protocol for their decentralized applications (Dapps).
If you have learned how to use and develop the ethereum contracts you will be able to do the same on the EOS blockchain.
We are excited to expand access to our protocol and offer more choice to the cryptocurrency community for decentralized development and use.
While many in our audience have heard about the concept of “tokenizing” assets, one of the biggest issues hampering the successful implementation of tokenization is the use of a single common token across many assets. We believe a token that is not asset-specific is much less effective because any price information on that token is reflective of the entire “basket” of assets tied to that token which cannot measure the individual value of any component asset. Surely such tokens are of limited value if your objective is true price discovery for the specific asset you are interested in. In addition, these tokens have the separate problem of illiquidity, because such tokens most often cannot be reliably traded in any marketplace with reliable supply and demand information; the result is that these tokens may end up being traded on “exchanges” which themselves have serious problems with infrastructure, jurisdictional reach, compliance with money laundering and know your customer regulations, and limited interest as the token is not unique to each asset.
But now there is a solution to these problems: the Zap decentralized protocol using our bonding curve to yield BitUnits. BitUnits are unique to Zap and apply asset-specific tokenization for property and real estate investment. BitUnits use our decentralized protocol to produce a corporation or entity ownership ledger. Now that certain jurisdictions (such as the States of Delaware and Wyoming in the United States) recognize ownership ledgers kept on a blockchain, entities in these jurisdictions can issue fractional ownership via tokens and recognize transactions made on the blockchain. The result is that people (if meeting certain suitability requirements and not residing in certain jurisdictions) now are able to purchase tokens, representing fractional interests in the entity which is created to own one specific asset, and which can be solely issued on the blockchain. Here is a basic example:
Let’s assume there is a corporation that owns the deed to a particular real property. BitUnits allows the corporation (or other types of entities) to “tokenize” a percentage of its own equity. Buyers can pay for tokens and get ownership in the property through their ownership in the corporate entity. This allows for fractional, indirect ownership of that property, so that qualified investors using whitelisted accounts (usually meeting certain suitability requirements, depending on jurisdiction) have access to an equity share they would not ordinarily have otherwise.
The single-asset entity will determine the price structure of its bonding curve. The bonding curve, which is in its essence a smart contract, acts as a decentralized marketplace and clearinghouse for the unique token the corporation will issue. That token represents a fractional interest of ownership of the corporation. And because the price is pre-set and determined by the quantity of tokens in circulation, trading on a bonding curve allows the entity to achieve instant liquidity for the shares, while marketplace participants use the tokens as a supply with which to assess demand, thus acting as a price discovery mechanism. Should the token value drop below the value pre-set by the bonding curve, whitelisted accounts can still trade the shares directly in a peer-to-peer OTC market.
The bonding curve is governed by customizable code. This means business logic can be written into the code so that, for example, fees can be placed on trades which can then either go directly to the property owner or split among the property owner and whomever facilitated market trading by posting a widget of the property’s bonding curve onto their website (which allows, for example, a broker to list these properties on their website to offer direct access to trading on their own URL).
Another simple example would be a rental property. The holders of a property’s token would receive a percentage share of the potential revenue generated. Beyond full liquidity for a unique token, bonding curves also offer these properties and investors a decentralized indication of the level of risk. For example, a property with little bonded to it is much more speculative an investment than a property with a large amount of capital bonded to it. As well, investors can invest across a multitude of properties to create a more diverse investment portfolio where positions can easily be entered or exited.
We are excited to announce that BitUnits, which we developed using our Zap protocol, have a number of property owners ready to tokenize their real estate and allow qualified investors (subject to applicable restrictions in their jurisdiction) to access this new decentralized marketplace for real estate investment.
Since these tools are open and decentralized, the ability to create similar marketplaces for tokenized assets using bonding curves and smart contract templates is available to anyone in the world.
World Blockchain Summit — Dubai
This month, the co-founder of Zap.org, Nick Spanos, was welcomed again to speak at the World Blockchain Summit in Dubai, UAE. Nick spoke to the audience about the Zap protocol and, specifically, how BitUnits is creating a revolutionary new real estate asset that is fully liquid.
DeFi Prime Interview
DeFi Prime, a space for supporting and advancing decentralized financial products, interviewed Nick about Zap and its decentralized protocol. You can read that interview using the following link:
We look forward to updating you with more information BitUnits and its use of our protocol as it comes. As always, development for maximizing the access, performance, and possibilities of Zap’s protocol is active and we look forward to more decentralized use-cases to come.
Keep up to date with Zap.org at:
Medium: The Zap Project
GitHub: The Zap Project
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The Synapse Foundation is an Isle of Man non-profit organization with offices in Zug, Switzerland. The Synapse Foundation was formed to build, promote, and oversee the Zap protocol. The organization is committed to community engagement and sponsoring user participation within a world of decentralized data. Zap is an intellectual property owned by the Synapse Foundation. Nothing herein, nor any related documentation issued by the Synapse Foundation or Zap project team, shall constitute legal, tax or investment advice.