E-Money — Research by Cryp2Gems
Digital Money Built for Global Payments
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The author of this research is not invested in E-Money andtends to stay unbiased while researching and writing this article. This research is not intended as a promotion and is not part of any paid promotion. Cryp2Gem strongly believe in unbiased researching, sharing knowledge and transparency.
FOUNDED: 2018, Denmark
WEB PAGE: e-money.com
WHITEPAPER: Good explanatory whitepaper document on 25 pages.
FIELD OF INTEREST: FINANCIAL
CATEGORY: Electronic payment system and store of value
GOAL: »The company vision is to create a level playing field, providing equal access to transparent financial services, on a global scale, while greatly reducing cost. To that end, e-Money intends to release a range of currency-backed stablecoins in a system that is fair and transparent, accessible for all, and with near-zero fees, instant settlements, and immediate finality. e-Money is not designed to act as a wholesale replacement for the existing financial system, but can instead be thought of as the layer two solutions for traditional finance.«
CONSENSUS MECHANISM: Tendermint BFT
LIVE MAINNET & SCALABILITY [TPS]: Mainnet live since March 2020 with 40 validators already built with Cosmos SDK. Tendermin has a high throughput with about 10k tps.
DEV ACTIVITY: Much activity is based on GitHub insights. The most active period was until the release of mainnet in March 2020.
PRODUCTS: Mainnet and DEX (UI soon)
EXISTING CUSTOMERS AND USERS: none at this point
COMPETITORS: All regulated blockchain projects trying to disrupt digital payment systems and present a new store of value in a form of stablecoins.
The team behind e-Money has considerable experience within the finance, technology, banking, marketing, and blockchain sectors.
*Martin Dyring-Andersen, CEO/Co-Founder. Has 20 years of experience within IT startups and algorithmic trading. Also owns an active private investment company in Denmark which was founded in 2006.
* Henrik Aasted Sørensen, CTO/Co-Founder. Senior software engineer with 15 years of experience within financial infrastructures, security, and consulting. Formal owner of Bitcraft IT-consultancy.
* Marianne Schmidt Nellemann, COO/Co-Founder. Financial partnership expert with 20 years of experience within financial institutions. Worked for 8 years at Danske Bank. Active founder of Rent Relies on real estate renting company.
* Laura Toma, CMO. Marketing and PR specialist with over 10 years of experience in marketing, business development, and startups. Active founder of Innovation (partner of e-Money). Head of PR for the Amazix crypto-consultancy firm for public relations. Active Marketing Advisor for Ocean Protocol, Bitlattice, BetProtocol, POA. Formal Marketing Advisor for Akropolis.
*Dejan Horvat, COO. Communications specialist with extensive experience from working in the blockchain industry, leading community management & growth of 150+ projects, and over 1M community members. Founder and COO of Innovation marketing company which is also an acting partner of e-Money. Formal partner and COO at AmaZix. Current Marketing Advisor for OINFINANCE. Remember AmaZix admins in Telegram groups?
* Harriet Cao. Co-founder at IRIS Foundation Limited & Founder of Bianjie AI. IRIS is the backbone of Chinese BSN and Bianjie is a project founded in 2016 and also part of the Cosmos validator program and BSN. There is a chance of e-Money becoming a part of a BSN in the future as well. They have an interesting token model which might be of interest to the BSN of corporate settlements for example which would save a lot of money on fees. This is pure speculation.
*Zaki Manian. Founder of iqlusion.io. Which are Cosmos and Terra validators?
* Morten Schultz. A lawyer with DLA Piper Denmark, helping navigate the regulatory landscape for stablecoins and NGM tokens.
* Aurel Iancu. Dokia Capital
*confio.tech. The team behind CosmWasm to bring WASM and a Uniswap-like AMM to the e-Money chain. It will interact with the order book, resulting in improved liquidity and great user experience.
*Open Market — A non-fungible asset (NFT) marketplace for Cosmos.
*IRISNet as ecosystem partner. A validator of Cosmos Hub and selected in the first batch of Chinese government-backed project Block-chain-based Service Network (BSN). IRISNet developed an interoperable enterprise product IRITA which will form the foundation for the BSN service hub.
Some other partners also come from Cosmos Ecosystem… Confio, very interesting Regen dealing with ecological issues, cloud computing project Akash, etc
*Regen Network. Cosmos Ecosystem. A blockchain of ecological health.
*Akash. Cosmos Network. Cloud computing marketplace.
*Sentinel. Cosmos Ecosystem. dVPN Network
*Desmos, IOV, Bitsong, ChainLayer. Cosmos SDK
*Innovation. Marketing project co-founded by acting e-Money team and founders Dejan Horvat, Laura Toma and Hendrik Jon
*40 validators which can be seen here
TOKEN USE CASE AND REVENUES:
Both the NGM and all stablecoin can be used to pay transaction fees of EUR 0.01 equivalent. Placing orders on the limit order book (DEX) incur a fee of EUR 0.01.
NGM supply increases with inflation for staking rewards and is reduced by buyback and burning.
The NGM token must be staked to receive any rewards which are paid to secure the e-Money network. The revenues are related to the adoption of the e-Money network where transaction fees grow with more payments and trading transactions.
The company generates revenues by owning NGM and staking them. Staking rewards can be sold on the market. The NGM buyback (funded by 1% stablecoin inflation) should boost NGM buy-side demand.
The following use cases are mentioned in the whitepaper: unbanked global citizens, empowering local businesses and start-ups, NGOs, corporate settlement as for very low fees, Cosmos ecosystem interaction.
TOKEN METRICS: currently available in a pitch deck for ongoing private pre-sale investors
FULLY DILUTED MARKET CAP: TBA
INITIAL MARKET CAP: TBA
TOTAL TOKEN SUPPLY: 100 million
INITIAL CIRCULATING SUPPLY [%]: TBA
FUNDS RAISING INFO (allocations & vesting):
Public: No public sale
TOKEN DISTRIBUTION: TBA
Soon after the private pre-sale ends, the tokens will get listed on an exchange in early October 2020.
*Q3/Q4 2020 Fully automated client onboarding
*Q3/Q4 2020 Full iOS and Android Mobile Wallet Support. Lunie will become the first mobile wallet to support e-Money on iOS and Android.
*Q3/Q4 2020 First CEX listing of NGM and currency-backed stablecoins
*Q4 2020 Cosmos IBC protocol upgrade
*Q4 2020 Web UI for the DEX
*Q4 2020 WebAssembly Smart Contracts
*Q4 2020 Uniswap Automated Market Maker (AMM)
*Q1 2021 Credit Card Payments
Short term roadmap is quite ambitious but the team is building since 2018 and had the mainnet launched in March 2020. The DEX will be operable and liquidity provided until the end of 2020. The important milestone for Cosmos is an IBC protocol upgrade. E-Money depends on that upgrade.
Telegram 360 members
Twitter 630 followers
There were no marketing and promo actions yet which reflects in their small community base. That will change after the private sale is finished based on what Dejan Horvat said in their official Telegram chat. Dejan has lots of experience in marketing in general as well as Telegram promo with AmatiX. The NGM token listing on a first exchange should happen as soon as early October 2020. We can expect to hear more about E-Money very soon.
e-Money is a stablecoin layer-2 solution for the legacy financial system. It is designed for future interoperable integration of other interoperable networks. Mainnet is already running and was build with Cosmos SDK so it already supports all tokens from the Cosmos ecosystem.
e-Money uses a hybrid token model where the NGM tokens serve for staking purposes while the currency backed stablecoins are used for exchanges, transactions on the DEX running on mainnet. So the currency backed tokens will be eEUR, eCHF, eSEK, eNOK and eDKK and other globally recognized FIAT currencies added later. All the cryptocurrencies from the Cosmos ecosystem will be supported.
The other tokens from the Cosmos ecosystem will be movable into the e-Money zone as well via IBC and traded on the DEX if people want.
From the whitepaper: »Unlike collateralized stablecoins, e-Money’s currency-backed tokens do not promise a 1:1 peg against their given fiat currency. Instead, the exchange rate between the two asset classes varies depending on the interest accrued on the fiat reserve held by e-Money. This is made possible by inflating the supply of the currency-backed stablecoins by 1% a year, resulting in a controlled and managed divergence between the two assets over time.«
NGM tokens are native to Cosmos, they will bridge to ETH at a later time once the Cosmos Hub / Ethereum Bridge is up and running. They expect to mint stablecoins on Ethereum down the line.
Currently, the mainnet integrates Cosmos based wallets. Thir partner is Lunie which is one of the top Cosmos wallets which also supports staking. Once the Inter-Blockchain Communication ( IBC) upgrade arrives, all Cosmos tokens should be supported by other ecosystems wallets like the Trust wallet for example. Ledger already has the support for Cosmos tokens.
e-money network will be powered by the NGM governance token which will be used for staking and rewards distribution. The NGMs are inflated at 10%/year and the newly minted tokens are used for rewarding the stakers. By staking NGM, holders of these tokens will receive a share of the newly minted NGM tokens.
They have a native DEX that supports currency backed stable coins as well as for cryptocurrencies from the Cosmos environment. There are no listing requirements for the DEX.
More (tech) details on DEX here.
As with all DEX, I am worried about liquidity and the question about liquidity was due to be asked.
WASM will allow new dApps to integrate into DEX? Does e-money have plans to operate outside the Cosmos ecosystem as well in the future? To enable cross-chain payments and integration of other blockchains and to provide extra liquidity from Ethereum Network for example? Don’t you think liquidity might be a problem for your DEX?
Martin Dyring-Andersen: »One of the main purposes for WASM is AMMs that can provide on-chain liquidity. We plan to bridge to other ecosystems as well down the line, if there isn’t a bridging protocol (such as IBC) available we can do the more simple solution of locking tokens on the e-Money zone and minting then on the destination network (and vice versa). We intend to provide a WASM based AMM (that has the same characteristics as Uniswap) on our chain, that people can use with Cosmos-based tokens.«
They have also agreed with a professional market maker to provide exchange liquidity.
e-Money had two audits performed. Certik has done a security audit, while Ernst&Young has made a regulatory and financial audit of the company. This shows the team wants to do things by the books. Despite being audited they are retaining legal counsel and advisors who work at the forefront of EU financial regulation because of an existing risk that lawmakers will change the way that cryptocurrencies and blockchain technology are regulated. They are working with DLA Piper which is one of the largest law firms in Denmark and is the only Danish law firm in a global network.
Does e-Money have a license in the EU?
Martin Dyring-Andersen: »Obtaining an e-money license was the original plan, but as our token model has matured we have discovered it is currently incompatible with the EU e-money regime. This is mainly due to the prohibition of interest in the context of e-money.
We have however worked with the Danish FSA and numerous lawyers to ensured that our currency-backed tokens are fully compliant. The T&C for our currency-backed tokens will be published before launch and will shed more light on the regulatory status of the tokens. We are currently working with our lawyers to finalize them. We do expect that the EU e-money regime will be updated to handle interest and are prepared (actually looking forward to it).«
Some concluding highlights presented as in the whitepaper:
● Fully backed by bank deposits and government bonds.
● Multi-currency, eventually supporting all major global currencies.
● Interest-bearing, both positive and negative interest rates.
● Capable of immediate finality and settlement.
● Near-zero transaction fees.
● Transparent through quarterly Ernst & Young audits to demonstrate proof of funds.
Martin Dyring-Andersen: »We’re starting in the crypto space with exchange and Cosmos project integrations, expanding to other networks as well. A longer-term goal is non-crypto (retail) adoption in payments since we can support a wide range of currencies, settle immediately, and at a minimal cost.«
e-Money seems like a good alternative to existing payment methods. Built on interoperable Cosmos Network. EU regulations compliant blockchain project e-Money is trying to disrupt existing digital payment systems with a fast and interoperable network that has a very low cost compared to off-chain systems. Acting collaboration with DLA Piper and lawyers within the team is a way to keep the system regulated. The audits prove that the e-Money team wants to get it right for the first time rather than try to launch the project at any cost. Audits and regulations compliance achievements are taking lots of time. And it is best to go on this path. The liquidity on the exchange will be provided with a help of Confio. This is essential for any DEX. Future integration of other interoperable networks like Erthereum and Polkadot will be a game-changing milestone. Bringing all the liquidity from those networks will help with adopting as well. The interesting period will be in 2021 when the onboarding of new partners and signed with the first big clients should take place. By that time the DEX should be up and running. Currently, the business seems focused on Northern and Western Europe but that might change next year if all go as planned. E-Money has a huge competition amongst blockchain projects trying to disrupt digital payment systems and present a new store of value in a form of stablecoins. Stasis, Eurbase, eToro, Binance, Bittrex, Nash are just some exemplar projects.
It will be interesting to follow future regulatory assessments of stablecoins as there is yet to be established to which regulatory framework a stablecoin has to comply with. We are also in the dawn of the Central Bank Digital Currency (CBDC) uprise. CBDC is also a stable digital form of fiat money but it will be used by central banks and governments. Probably not a competition to e-Money currency stablecoins. But CBDCs might have a direct impact on future stablecoin fate. The future will tell and E-Money has a bright future ahead.
Cryp2Gem team is always available for any further discussions in our social media. Looking forward to all the feedback.
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