Staking Your Claim with ZIX
Unfortunately, every industry has some level of fraud. It’s inescapable, someone will always try to game the system. In the gift card industry it’s rare, but it happens once in a while. To make this unattractive and unprofitable, Zeex uses a simple staking mechanism.
In any exchange there is something called transaction risk, which is basically the risk that something will happen to negatively affect the value of your end of the bargain before the transaction is settled. With credit cards, for instance, this period is usually 60 days because a customer can recall their funds within that time and the merchants have little recourse, so they could lose out on their product and their payment.
How can a company ensure you won’t do something unscrupulous within 60 days? Just like with a rental, you put down a security deposit. If you want to buy $500 of Starbucks gift cards with a credit card (which isn’t currently supported at Zeex) you would have to deposit $500 and leave it in the account for two months to discourage fraud.
With Bitcoin or Ethereum, however, it’s a different story. Cryptocurrencies have much less transactional risk than credit cards or fiat currencies because settlement is a matter of minutes not months. With Bitcoin, a transaction is considered irreversible after 6 confirmations which should happen within an hour. Ethereum is even faster, usually irreversible after 10 minutes. Because the transaction risk period is so much shorter, staking with crypto is more efficient.
Let’s say you want to buy the same $500 of Starbucks from before using Ethereum. You’ll still need to stake, but not necessarily $500. If you’re not in a hurry, you can break up that sum into 10 separate transactions of $50. In that case, you can stake $50 and wait about 100 minutes, and the protocol will perform the transactions sequentially. On the other hand, holding a reserve of ZIX in the wallet can be advantageous for more than just staking.
Priority in purchasing high-demand assets will be determined by ZIX holdings. The only restriction on vendors regarding pricing is that the asking price cannot exceed the face value of the gift voucher. That means vendors can choose to offer any discounts they like, so if someone’s selling $1500 of Amazon credit for $1300, you’ll want to have a high priority to get some of it! The more ZIX you hold, the higher up the chain you are and the more likely you are to get the products and services you want and need at the best price.
While staking can seem complex and cumbersome, it’s really a simple process that helps us protect our users. We’ve set it up so that all of this business happens behind the scenes. There’s no complicated interfaces, just a smooth app and a few taps. We can’t wait for you to try it out!
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