ICO Analysis: openANX | Hacked: Hacking Finance
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ICO Analysis: openANX

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ICO Analysis: openANX

Introduction

This article was posted on Sunday, 09:00, UTC.

With ~28 days to go, openANX has sold more than 20,000,000 tokens to the tune of over $16 million.

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The question is therefore open: will any of these tokens have value in, say, 90 days? What is openANX? Why has over $14 million been invested in it already? Should the rest of us take a swing at holding some of its share tokens?

Overview

OpenANX wants to “take advantage of technical developments on the Ethereum blockchain such as payment channels (Raiden, 0x, Swap, ERC20) and utilize them to overcome the challenges faced by the current [Centralized Exchange Model].” They identify and intend to address the following problems:

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  • Counterparty credit risk induced by the issuance of IOUs at centralized exchanges and related uncertainties – the problems faced by Mt. Gox and BitStamp in the past are illustrative.
  • With existing decentralized exchanges, “there is a significant lack of activity and liquidity on these platforms as not everyone is desirous, or is able, to trade only crypto pairs – these exchanges do not work for the general population.”
  • openANX wants to offer decentralized trading to users who have been unable to successfully leverage it in its current rendition; additionally, they want fiat pairs to be possible in decentralized trading.
    • To this end, they seek to “complement the wave of “token only” decentralized matching engine projects which otherwise would not have fiat support, and hence further increase liquidity, and accessibility for the general public.”

The openANX project is different from pure decentralized exchange initiatives as it recognizes that non-trading ancillary services are required for attracting the critical mass of users required for a functional ecosystem.

openANX believes, in essence, that the primary drawback of decentralized exchanges as we see them today is a lack of fiat interactivity. They believe that by connecting the fiat economy to decentralized exchanges, the market will better be able to mature and expand into a usable entity for a wider number of participants. This is probably a valid assumption, as there could not have been any legitimate dollar valuations of any cryptocurrencies before trading of bitcoins began.

To achieve its overall goals, openANX will be charged with developing a fair bit of infrastructure to facilitate the actual movements. This ecosystem breaks down in the following way:

  • Exchange users
  • Asset Gateways
  • Order book sponsors
  • KYC/AML services
  • Dispute referees
  • Voting members

Most of these roles are alien to existing platforms, and all provide new economic opportunities surrounding the crypto markets. Each of these parties could, ultimately, be its own operational entity – businesses or foundations. “Exchange users” can be entire underlying exchanges, interacting with the global openANX network for more accurate price and volume information, because another of openANX’s goals is to provide more trading opportunities based on having more current information at each exchange. This is meant to maximize efficiency and profitability, and eventually maximizing attractiveness to newcomers.

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openANX will also introduce the possibility of introducing credit risk swaps in crypto markets.

For example, ANX may have a strong public brand, and high levels of collateral locked up in the DAO relative to issue tokens, whilst Acme has an unknown brand and low levels of collateral. The ANXUSD/AcmeUSD order book allows these two tokens to be traded against the other, forming the basis for a credit risk trading market within the crypto marketplace. The pricing of these credit risks further provides users with another objective measure of counterparty risk.

As you can see, various gateways to fiat currency will have competing values, based on their credit risk and performance history. openANX very actively plans to enable anyone to enter the crypto economy as an asset gateway, enabling the usage of all the world’s value systems, in a decentralized fashion, with each earning its own reputation as a positively or negatively known quantity.

The Benefits

Part of the advantage to the openANX approach is in “liquidity aggregation,” or being able to stay independent of liquidity sources like still-existing centralized exchanges. The present situation is one where one or two major exchanges experiencing problems can drastically affect one’s ability to exit or enter the market – but if liquidity were continually aggregated on a decentralized platform, liquidity would be accessible regardless of problems that take place in individual exchanges.

Over time, this should lessen trader-dependence on centralized exchanges, encouraging them to instead work through openANX-enabled platforms that are more resilient. A tertiary effect of a more decentralized, on/off ramp for crypto-fiat trades is that prices across the board should become more reflective of each other, limiting the arbitrage opportunity that exchanges themselves sometimes have when selling coin directly to consumers.

In technical terms, openANX can be summed up in the following (from their technical whitepaper):

The openANX Team

The openANX is headed by Ken Lo of ANX International, one of the first and largest blockchain services companies. Previously, Lo worked for a few major companies including Verizon. His role is less important in the actual performance of openANX, supposing he lets those in the right positions do their jobs.

Credited with the thought leadership for openANX is Hugh Madden, who got his start in Australian cybersecurity. He is the founder of ANX International. Also in leadership roles are Dave Chapman and David Tee. Chapman has connections in the traditional banking industry and is the current Chief Operating Officer at ANX International. Tee has apparently worked in a much more private capacity for various big concerns over a few decades-long career. Not much came up trying to research him, so we’ll have to take his word for it.

In terms of developers, Cerulean Hu is said to have been working in the Bitcoin space since 2011 on projects such as Hyperledger. Frasier Wang is on board, who has worked in financial technology for most of the lifespan of Web 2.0. A number of other developers are already working on the project’s goals, and more are sure to be added as they continue through their funding round.

Investment Details

The OAX token is being sold to fund development of the openANX platform. Its trading value will, therefore, be related to the success of the openANX platform, as the token’s main function in practice will be to register and transfer memberships on the platform itself. Given that there will be a limited supply of 30,000,000 OAX, membership could be sublet later on through gateway services and the like. In essence, these tokens’ value will go up with their usage, and the more people want to create and offer some sort of service, or just use the registration for their own trading, the higher the value of the tokens will be.

If they don’t sell 30,000,000 tokens before the end of the crowdsale, which runs 30 days, they reserve the right to sell them later. The going rate for each token is around 0.002 Eth per token. Their overall goal is therefore just over 60,000 Eth, and so far they’ve raised, as noted in the beginning, over $16 million.

To participate in the ICO, you can simply visit the website in the Mist browser (or another compliant Ethereum browser) and click the “Contribute” button. If you try to do it with a regular browser, the “Contribute” button will do nothing. But if you go in Mist, you should see this:

The Verdict

Given the to-date success of the openANX ICO, as well as the mission it has, we can assume that these tokens will hold value in much the same way that SONM tokens will. While a niche business model at first, more and more entrepreneurs will see the opportunities presented by platforms like openANX, and will gravitate toward them. The successful nature of the leadership team means that OAX should be positioned to facilitate them as they come online, and to continue to provide value for the OAX token as time goes on. This ICO offers the opportunity to sell tickets to the show, if nothing else, and often enough the ticket scalper makes more than anyone on the inside.

To dispense with the flair, we’re going to say 6.5 out of 10 for openANX. Betting on the tokens at the outset is a risk you’re taking, and it could be quite some time before there is any real demand for the tokens (at least in their actual usage, which is where they will retain real value).

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

P. H. Madore

P. H. Madore

http://phm.link

P. H. Madore lives in Arkansas with his wife and children. He has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and is currently nearing the completion of a cryptocurrency exchange in concert with the firm he primarily works for, Vermont Secure Computing Consultancy.

Comments
  • user

    AUTHOR Morgan Phipps

    Posted on 10:19 pm June 25, 2017.

    Why you are giving SONM as an example here?

    • user

      AUTHOR P. H. Madore

      Posted on 2:17 pm June 26, 2017.

      It is similar in that the value of the tokens is directly proportional to the utility of the platform.

  • View Comments (2) ...
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