Disclaimer: This article was submitted to the DEXTokenDeFined writing contest. The stated points reflect the authors' opinion 100 percent nonetheless. The Author personally holds funds in $DEXG. The Author has not been sponsored by the $DEXG team.
The 'What', 'Who', and 'Why':
Before we start to delve into the case of why the DEXToken Protocol is special, we need to create the fundamental knowledge to understand it. The DEXToken Protocol is, unlike many other projects, highly innovative and when looked upon in more detail, not as easy to understand. To fully understand the capabilities of the DEXToken Protocol I will break the functionalities down into several segments. In total, I will take a look at the DEXToken Swap exchange, the off-chain capabilities and the team and history of the company behind it. Further down the road I'll discuss the $DEXG (DEXToken Governance) Token and putting together the pieces of information, some of which the $DEXG team would rather keep secretive (Sorry lads!).
I. The DEXToken Swap Exchange and 'Speculative' AMM
The DEXToken Swap Exchange will offer a new and unique decentralised exchange platform featuring a scientifically researched and self-developed automated market maker (AMM). DEXTokens 'speculative' AMM is highly innovative and unique as it derives the pricing via the volatility effect on the exchange and direct on-chain data. This unique take on automated market-making allows the 'Speculative' AMM to not rely on external price-oracles anymore, while at the same time reducing the volatility effect and slippage compared to other AMM models by a lot.
As this all sounds very ambiguous, let's dismantle the ambiguity behind the AMM and Swap Exchange.
I.I. Automated Market Maker (AMM)
In general Automated Market Makers (AMMs) are decentralised exchange protocols that rely on mathematical algorithms to set the asset prices on the exchange. By now there have been a handful of different AMM models implemented, the most famous one being the 'Constant Product Function' (CPF) AMM of Uniswap. While Uniswap is still the number one decentralised exchange in terms of trading volume, the platform suffers from a huge problem that disadvantages traders; the slippage.
Trading on Uniswap can become painful, especially if your order has some kind of magnitude or the liquidity pool of your tradeable assets got thin. Trading a higher amount of tokens at once creates high slippage with CPF AMMs like Uniswap, making orders unnecessarily expensive. As shown in the graphic above, the DEXToken Protocols 'Speculative' AMM is able to smooth the initial volatility out and reduces the slippage by a large margin. This offers users a more cost-effective and less volatile trading experience.
I.II. The Price-Oracles Issue:
All of the currently existing AMM models share one additional weakness; they rely on external price-oracles. Price-oracles are off-chain data collectors, that collect price data from sources they see fit as trusted entities and submit these datasets to the blockchain. The most famous price-oracle at the time is Chainlink ($LINK).
Usually, price-oracles collect price data of different data-submitters (exchanges, price feeds, etc.) and calculate the median price. The data-submitter closest to the selected median price gets a reward by the oracle. The data can then be requested at a cost by third parties integrating the oracle in their processes. In September we saw single Chainlink data requests costing several hundreds of dollars.
The costs are not the only issue in regards to price-oracles though. Most price-oracles are heavily centralised, end-users need to rely on the oracle keeping their security top-notch, that the oracle chooses the correct trusted third parties to provide the prices and that they are incentivised enough to not engage in cartel activity. A widely-used price-oracle forwarding wrong price data to the blockchain can have severe consequences.
DEXTokens 'Speculative' AMM removes the need for an external price-oracle from the equation, by setting the price with the volatility effect function and direct on-chain data. This results in a more cost-effective and secure environment for private users and enterprises utilising the platform.
II. Off-chain minting of tokens, wait, what?
An often overlooked feature of the DEXToken Protocol is the capability to handle and issue off-chain tokens. Now, as this get's really a bit complicated down the road (AMMs and Price-Oracles got nothing on this), I'll try to keep it brief.
Off-chain Tokens are usually used in IoT (Internet of Things) applications. The term IoT stands for connecting all sorts of things to the internet aside of computers. This spans from very small things like turning on and off a lightbulb via a mobile app to massive industrial processes that are connected and automated via sensors. Enterprise IoT systems are often highly dependent on Machine-to-Machine (M2M) micro-transactions to exchange data to each other (i. e. industrial IoT applications). The shift towards IoT in the last years offers a lot of opportunities for cryptocurrencies to find new use-cases.
Coincidentally, the team behind the DEXToken Protocol spent more than two years developing and building Flowchain ($FLC), a innovate IoT solution, offering said off-chain IoT solutions, real-time transfers, IPFS, shared computing power, high data security, and many more features. With the DEXToken Protocol, it’s possible to link these private off-chain networks with the public blockchain and create endless possibilities for enterprises. Not only can IoT applications and technologies be used this way for industrial and logistical processes and data processing, but also for all kind of tokenised assets like payments, flight miles, data authentication and many more.
While the benefits for enterprises are clearly visible, there is a possible secret benefit for private users that isn't talked much about. The proposed ability to take trades and transactions off-chain, creating the ability to make transactions in real-time with minimised fees.
Side Note: Remember how many crypto IoT projects are susceptible to security issues and malware attacks? Flowchain solved this issue with their unique PPKI mechanism.
III. The team & company behind it
Learning about the scope and ambition of this project, it becomes clear that this vision can't be achieved by some cryptocurrency interested college kids. We can see that the Flowchain Foundation limited, registered in Singapore leads this project. According to the Singaporean Accounting and Corporate Regulatory Authority (ACRA), the company was registered in spring 2018. Around this time the company was marketing a possible ICO for their previously mentioned $FLC token. As it seems this public ICO never took place though, as the company secured enough funding with private accredited investors. Today the company holds offices in Taiwan, Singapore and Mainland China. While possible investors can already get rid of the issue of an anonymous team at this point, let's take a closer look at the leading figures of the Flowchain Foundation.
III.I. Special Mention: CEO - Jollen Chen
The company is headed by CEO Jollen Chen, and oh boy, I could possibly write a whole article about the man himself. Let's start with taking a look on his LinkedIn. On the first glance, we can see Jollen excelled in his career as Android and Linux developer, working for industry giants like Quanta Computers and HTC. Somewhere along the road, Jollen started to build up his own business on the site with Jollen Consulting, Moko365 and Mokoversity.
Jollen's Consulting, Moko 365 & Mokoversity
Jollen's Consulting was a non-profit organization established in 2007 dedicated to the development of technical research and training courses, offering consulting services in Linux and Android development. In 2009 Jollen founded Moko365 (Web-Archive) in Taiwan, offering training and consulting to companies utilising Android software infrastructure, with customers like LG Electronics, HTC and Tencent, Quanta, OPPO. Over the years the company started to offer their services in several Asian countries and shifted more in the direction of Blockchain training and consulting, culminating in the founding of Flowchain Foundation Limited. Mokoversity (Web-Archive) meanwhile was an educational platform for young and talented coders and developers, offering them knowledge not only in regards to coding and personal development but also in regards to creating start-ups and helping them to build successful businesses.
WOT.City
A very interesting entry on Jollens LinkedIn page is WoT.City, WoT (Web of Things) seems to have been the precursor of Flowchain. WoT.City seems to be completely incorporated into Flowchain at this point. However, for the interested reader, you may check the WoT whitepaper, the web-archive entry or Github repository. Interestingly, nowadays the wot.city domain leads to AIMining.io.
AIMining
While it has been removed from Jollens Linkedin page, he is also the founder of the formerly mentioned AIMining.io. AiMining could use an article devoted to itself, so again I'll try to keep it brief. AIMining runs a Quant-based automated trading engine on utilising the $(c)FLC/$DEXToken infrastructure. For private customers this means they can choose different packages, having an AI manage the funds via quant strategies and return after time X to check for the performance of the AI, somewhat comparable to RoboAdvisors in legacy markets. For businesses, AIMining offers the deployment of Whitelabel exchanges, with an out of the box working infrastructure and complete compliance deployable in short times running on a private chain.
III.II. Special Mention: General Counsel - Dingzhang 'Junus' Chen
Another person of interest within the company is the general counsel Junus Chen. Junus is an experienced lawyer and leads ???????????? - roughly translated 'Intellectual Power and Commercial Law Firm'. While in his over two decades of practising as a lawyer, he specialised in patents, regulatory compliance and risks for blockchain and digital assets within the last years and is one of the most renowned lawyers in Taiwan in this regard. Junus also lectures and teaches about his field of expertise at different universities and institutes located in Taiwan. Aside from his position within Flowchain and AIMining, he took part in different technological progress initiatives, for example, Smart City Taiwan. Notably, Junus was involved in industry development strategies initiatives, as the 'Smart Content Industry Development Plan' and the Industrial Upgrading and Innovation Project by the Taiwanese Ministry of Economic Affairs.
III.III. Flowchain & AIMining Staff
Aside from Jollen and Junus, there are several other team members known from Flowchain. Several experienced coders and developers like Red One or Archer Huang, administration and project management Ellaine Lin, public relations Angelina H. Huang, and many more. A lot of these people have been working together at Jollens previous businesses like Moku365 already. While the Flowchain website gives an overview of the team (which seems outdated), many of the mentioned people serve double positions in AIMining as well. (For the people I didn't mention; no bad intentions!)
III.IV. DEXG specific staff
Taking a look at the DEXG Official Information Announcement in Telegram, we can see that from the staff mentioned earlier only Jollen Chen and Ellaine Lin are mentioned as official Flowchain staff assigned to the project. It's safe to assume though, that Flowchain uses a good part of its resources to build the DEXToken Protocol, as it is a central part in their greater vision. While we already know the official staff, let's take a look at the additional people that are mentioned in the announcement.
Aside from a few community mods, we will spot three additional DEXG team members. Rim Slim (DEXG Community Manager); Alistor Zimon (DEXG Business Development) and Abu-Bakr (DEXG Marketing). While I couldn't find anything too thrilling about Rim and Alistor aside from their involvement in a few crypto and trading communities such as ChartKitchen, Abu-Bakr is a rather suspect individual involved in a number of projects, but mainly known for his involvement in Statera and it's precursor token. I'll leave it up to everyone to have your own opinion about his involvement in DEXG, however, Abu-Bakr does not enjoy the best reputation. For my part, the involvement of a person accused with an alleged scam scheme, dumping on $STA buyers and lack of professionalism by several sides has a sour taste.
IV. The Elephant in the Room: $DEXG (DEXToken Governance)
Now let's address what we are here for: DEXToken Governance ($DEXG). $DEXG is the native token of the DEXToken Protocol and serves several purposes. Let's sort the functionalities of the token and dissect it part by part.
IV.I. Governance
Governance is a wide-spread term ever since DeFi started picking up pace. Contrary to popular belief, governance functions do not hand over complete control of the project to token holders. Crypto-governance usually refers to enabling the community to vote on decisions regarding codebase changes or changes of parameters in the protocol's code. At the same time, the token-holders are able to propose such changes. It's important to understand the difference between token governance and a DAO structure. While a DAO hands over complete control of all to almost all aspects of the project to holders, governance reassures some amount of control centralised at the team.
IV.II. Fee-Shares
Remember the big hype about $UNI? Uniswap has a function in the code to distribute a part of the exchanges trading fees among all $UNI holders, however, this function still remains deactivated at the current time. Now, what does that mean? All UNI holders will get a share of the fees of each transaction made on the exchange, with several hundreds of millions to billions in exchange volume per month, this sounds like a good idea. A little downside is that you'll effectively share it among a pool of 1,000,000,000 $UNI, making it practically useless for holders that only hold a small amount of $UNI.
You might wonder what this has to do with $DEXG. The DEXG token will have a total supply of fewer than 80,000 tokens. Yes, the fee-sharing function is one of the incentives for holders of $DEXG once the DEXToken Swap Exchange is live and unlike with $UNI, it's viable for smaller holders to keep their assets in $DEXG at this point.
IV.III. Off- to On-Chain Gatekeeper
Remember Flowchains and AIMinings technology and service of supplying off-chain IoT solutions and exchanges? Well, here comes another interesting function of $DEXG: The usage as collateral for off-chain issued tokens and private chains.
To create these off-chain networks and the respective off-chain tokens, collateral is needed to prove the 'ownership' to the network. Entities that want to create off-chain networks need to provide an amount X of $DEXG as collateral and amount Y of $FLC as the off-chain network utility token.
Let's take the issuance process on step-by-step:
- The 'Staker' (Entity X that wants to create a private chain and token) needs to deposit $DEXG as collateral and $FLC as network utility tokens to the 'Stake contract'.
- The 'Stake Contract' will verify that the $DEXG collateral and $FLC has been provided and sends a signed transaction to the 'Regulation Contract'.
- The 'Regulation Contract' then issues the off-chain tokens, which then can be used for whichever task they are supposed to fulfil.
- To verify the off-chain contract, a public on-chain ERC-20 contract will be created acting as 'Clearing House' validating the Regulation Contract.
Now to further explain this, we would dive too deep into the field of IoT and Flowchain. What's important to know is, that $DEXG needs to be provided as collateral and that the redemption/withdrawal process can be routed through the DEXToken Swap Exchange, in turn generating fees for $DEXG holders. Since Flowchain and the $DEXG Team keep radio silence about the exact interactions of $FLC, $DEXG and AIMining it remains to be seen how exactly this process will benefit $DEXG, the concept is clear and very exciting though!
IV.IV. A brief chart analysis of $DEXG
Well, what's there to say except: 'Why haven't you bought yet?'. But really, while charts for $DEXG are rare (one would assume that ChartEX and co. could do better with their funding) and the only sites that offer them have a limited array of tools for technical analysis, let's keep it at the bare minimum here using Santiment. Actually, all of the left and central part of the chart is not of a lot of interest. Broke downtrend to the upside here, double top around there, broke support downwards over here.
What's interesting for us is the central-to-right part of the chart. Despite the decreasing prices we can see increased and relatively stable trading volume, which is always a good sign and indicator. Despite the feeling of the decline in terms of interest, we see a lot more trading volume than compared to pre-staking-round September. It's safe to say $DEXG is being accumulated in this area, what we could further confirm by looking at Etherscan (but I will leave it at this now).
With the price taking a little jump above the MA200 in the last days, the MA200 has not only been broken but broken with confidence. Which serves as another very bullish sign. A prediction based on the chart is hard, especially with more staking rounds and an increase in circulating supply coming up, but a look at this chart leaves me with a generally bullish sentiment.
IV.V. Marketing, Community, and the right approach
Sticking around the $DEXG telegram group and social media accounts you get the feeling that the team is putting a lot of emphasis on professional and clear communication. For some community members, this seems to be a concern. Voicing the desire for more marketing measures aimed to increase the hype on the project. A few honest words here: Not every project can be the next $YFI with close ties to high-ranking influencers, exchanges and whales. Since some people in the community want to have more say in the processes of development and marketing, let's draw a quick analogy with the previously mentioned Statera ($STA).
On the one side, we have Statera which says about itself to be a community lead project without a central team. $STA used extensive marketing on social media channels, especially the infamous 4chan.org /biz/ imageboard. Meanwhile, the devs working on Statera struggle to release a simple dashboard for months, the marketing is full of false promises, announcements of announcements, and questionable narratives. So how did this community-lead approach benefit the project? Development takes ages, processes are not streamlined, there's no authority figure to take charge and responsibility, anonymous 'team volunteers' trade their $STA up and down with insider knowledge, price-performance remains underwhelming.
On the other side, we have $DEXG which is led by a team of professionals with years or decades of experience, trying to evolve the project to be fairly decentralised, not trading their team tokens, releasing applications on time and secure, acting responsible with the project and being responsible for what happens to it, marketing does not revolve around hype but around brand-awareness. Granted, the social media exposure for $DEXG compared to $STA remains lower, the price remains underwhelming as well, but considering both approaches, I'd know what I opt for.
It becomes apparent that the Flowchain and $DEXG team could initiate hype if they fully released their plans with the project, the eco-system and their business partners and investors (which sure would be interesting to know). The decision to not do so is a conscious one, which shows that the community and Uniswap degen marketing is not as important for the success of the DEXToken Protocol. Looking at what I outlined above, its obvious that while $DEXG holders surely can benefit from the infrastructure Flowchain, AIMining and $DEXG provide, at the same time, they are not integral to success. Acquiring business partners and large-scale enterprise users of the IoT infrastructure is the key to success for Flowchain. Understanding this, the stance on marketing and communication makes a lot more sense, in the world of business professionalism is worth more than a thousand hyped retail 'investors'.
V. Conclusion
I think it becomes clear that when looking at the career of Jollen Chen, he worked on his vision for years starting with open IoT projects and gets closer and closer to fulfil his ambitions day by day with Flowchain. Taking into account the current timeline provided by Flowchain, the company aims to have this revolutionary eco-system ready for Data 2025 and be among the first movers of innovative IoT real-time solutions. Let's talk about foresight, dedication and long term value there.
As outlined the DEXToken Protocol plays a central role in Flowchains ambitions and their business plan is way ahead of what is visible on first glance. Flowchain operates on several fronts at once, preparing a whole eco-system with several real-world use cases. While we see the majority of projects and tokens being nothing but forks and quickly coded projects by anonymous college-kids, it's really refreshing and reassuring to have one of these serious players, with a real business plan, doing what they do best, work on long-term success.
If Flowchain (and despite all praise that's a big if!) and the DEXToken Protocol can find the adoption they need for further success, this project could be a massive gem right now looking at an investment horizon of at least one year. I am personally excited to see the next year for $DEXG and $FLC and hope to see the team continue the path they are on right now.
Kaptn-Doge
