By now, most in this space are familiar with the way initial coin offerings (ICOs) work. An investor sees a company he or she likes, reads the whitepaper, checks out the team behind the operations and decides they want to pick up an exposure to the company in question’s potential for future growth.
They pick up some ETH or BTC, or dip into their existing holdings, and fire it across to the company’s token sale wallet address. In return, they receive a number of tokens proportionate to the amount of ETH or BTC they sent and variable depending on the (generally) predefined token sale price.
Then what happens?
Well, then the investor stores the tokens until they get listed on an exchange and, subsequently, either sell out at the open market price or hold to sell out at a later date in anticipation of future growth in value of the tokens in question.
Billions of tokens of all shapes and sizes have been issued in this way and are currently being stored, bought or sold on the various exchanges in the cryptocurrency sector.
Right now, the vast majority of these tokens are sitting idly in an offline wallet or on an exchange somewhere. Some are appreciating in value, some are decreasing in value, some aren’t trading enough volume to move at all.
A company called MoxyOne is trying to change this.
MoxyOne has developed a system that allows users to spend tokens in more than 44 million locations worldwide (essentially, anywhere that accepts debit cards) but that, at the same time, doesn’t require the retailer to deal, exchange, or even be aware that the customer is paying in cryptocurrency.
So let’s ask the obvious question – how is this possible?
Well, it’s all about liquidity.
The company is developing an application and is set to issue physical debit cards to its customers, as well as allow for payment to be made using virtual debit cards (so, mobile device based payments).
The image below outlines the process that takes place when an individual uses the physical or virtual debit card to initiate a transaction:
Source – company whitepaper.
Let’s explain the above process. A user initiates the transaction and this starts what’s called a Just In Time (JITF) funding protocol, which is a method of practically instant exchange from the cryptocoin that the customer wants to use to pay for the goods or services or whatever he’s buying at the retailer that’s taking payment.
The exchange (between crypto and fiat) is done through a liquidity provider, which takes a live exchange rate and basically buys the customer’s cryptocoins with fiat currency (the fiat currency denominated in the currency that’s local to the retailer).
The merchant then receives the fiat currency and the customer gets the product. In the background, the liquidity provider reimburses MoxyOne to the value of the token purchase and, at the same time, takes a fee in the same token for acting in the LP role.
The company will issue SPEND tokens as part of its ICO and these tokens will form the basis of the first in-house iteration of the above-described system. Outside of its proprietary application of the technology, however, MoxyOne is also going to white label the service to other token issuers, which is where the company’s ability to solve the above-outlined problem comes into the picture.
By white labeling what MoxyOne has created, practically any company that has issued an ECR20/23 token can allow its token holders to spend said tokens using a MoxyOne created (but company-specific branded) physical debit card.
At launch, users will be able to use this system with SPEND tokens (MoxyOne’s proprietary token), ETH and SCL, which are the tokens created by blockchain company Social, the first company to white label MoxyOne’s technology.
Soon after, however, the company will open up the platform to all ERC20/23 tokens.
The company’s public token Presale begins on February 8, 2018, and ends on February 10, 2018.
The primary token sale runs from March 14-April 14, 2018.
The minimum goal is 4,000 ETH with a hard cap of 50,000,000 SPEND to be issued.
Bonus tokens are available for early participants.
Find out more about and participate in the token sale here.
Check out the whitepaper here.