In the crypto market, Initial Coin Offering (ICO) is the most common method of raising capital for a company. This involves an investor raising capital by buying a digital token from a company, after which a Proof of Concept (POC) is postulated, the idea is brought to life and finally marketing of the product/service is done. In this way, ICO did raise substantial funds for many firms but many times this method has proved to be a hoax. As this method is based on raising capital initially, there is no assurance that the proposed idea would be materialized. Even if it will, one cannot be sure about its success in the market in the near future.
Another shortcoming associated with ICO is that no authority regulates it. So, if investors fall prey to fraudulent intentions of a company, their loss can not be compensated.
A research carried out on ICO by a New York-based Blockchain Technology consulting firm, Satis Group, claims that in 2017, 80% of ICOs were scams. This means, out of 371 ICOs that took place in 2017, 297 were corrupt. They divided the conclusions of ICOs in six categories as Scam, Failed, Gone Dead, Dwindling, Promising, and Successful. It would be no less than a surprise to know that only 1.9% were successful.
Another study by Fortune Jack reveals that ten noteworthy scams stole $687.4 million.
In order to avoid this problem, the XIO network brought about modifications in the existing mechanism of raising capital. XIO network is a decentralized network that aims to provide a platform for Blockchain startups. It is an incubator where Blockchain startups can thrive by the support of different investors, also known as XIO Citizens. XIO model follows these steps:
The investors can simply choose the startup they want to invest in and stake their money in form of XIO tokens. The yearly interest rate is calculated, and the equivalent amount is transferred to the startup.
The XIO model also differs from the ICO model in giving rewards to its users. Unlike ICO, where the user gets the reward after the success of a project, XIO Citizens do not have to wait for interest, they stake in a startup and earn instant rewards.
Also read our Case Study: XIO Token Swap
To put the XIO model into effect, the idea was to build an application where this exchange could be carried out. However, there was a problem that the application could not calculate the liquidity between XIO and ALTs. To work it out, the team decided to make use of Uniswap.
Uniswap is a decentralized exchanger based on Ethereum that allows the exchange of digital assets by means of Smart Contracts. Uniswap functions by utilizing liquidity reserves that serve as pools of tokens to be exchanged. To initiate a swap a user sends a token to an existing pool. This is followed by the calculation of the number of tokens to be bought which depends on the relative size of its liquidity pool. The calculated amount is then transferred to the buyer. In this way, our team made it possible to calculate liquidity between tokens and exchange between XIO tokens staked by the XIO Citizens with those offered by the startup they invested in.
The other problem which we encountered was when we made the XIO DApp live in beta testing. Beta testers reported a few bugs among which, gas inefficient architecture was a predominant bug making the application quite pricey. To solve these bugs and to provide the fastest updates, our team at Xord worked diligently. The team redesigned the whole architecture of Smart Contracts and front-end applications to make it gas efficient and fast.
XIO selects the portals and adds them to the application. After adding the portals, the XIO DApp works in the following manner:
Users can also stake in multiple startups simultaneously. One of the distinctive features of the XIO model is granting upfront rewards to its Citizens. When the users stake XIO they receive stake rewards from startups right away.
The calculation of interest rate, transfer of the calculated amount to the portal, and transfer of reward to the staker are done in an instant which is the most exceptional feature.
At the time of launch, the total number of portals added in the XIO DApp was 7. 31 beta testers tested this application. Approximately 62,000 XIO were staked within a week and each XIO was worth $0.01.
Currently, there are 9 portals. More than 60 beta testers are testing the application. People have staked and unstaked more than 500,000 XIO. The current worth of each XIO is around ~$0.08.
Moreover, a staker earned more than $500 by staking his XIO, and more than $5000 of XIO have been staked and regulated through this app.
In order to introduce new features in it, the XIO DApp is under the process of redesigning. To give a hint about the new version of this app, we have made 2 portals, a public portal, and a private portal. In addition to the processes of staking and unstaking now, there will be early unstake as well. Without revealing further the features of XIO DApp Version 2.0 will be discussed in detail in the next app update.
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