Cryptocurrency analyst. Founder and editor at btcpeers.com
It is common knowledge that the global financial service sector, which is projected to reach $25.6 trillion by 2022, is undergoing some changes as a result of the extensive incorporation of disruptive technologies. Stakeholders have come to understand that financial services need a lot of revamping to meet the current needs of consumers. As of now, the universal requirements of banking services and products are speed, transparency, security, and affordability. However, we all know that it is impossible to seamlessly combine these features if financial service providers rely solely on conventional practices.
Therefore, we have begun to see new iterations of banking solutions emerge, with the most potent surfacing in the nascent crypto and blockchain landscape. The belief that decentralization is the missing piece of the jigsaw has birthed a myriad of tools and networks designed to put an end to intermediate banking processes. With the help of blockchain, these solutions have introduced new variations of financial systems that are immune to censorship, impervious to attacks, and particular about transparency. Due to the disruptive nature of this model, the global fintech blockchain market is expected to be worth around $21.2 billion by 2025 from $130 million in 2016.
However, although decentralized finance (DeFi) has its perks, it also has its downsides. The most notable is the fact that such systems embody an unprecedented level of volatility. The high fluctuations of market metrics make it difficult to guarantee stability and liquidity, which in turn generates uncertainties in terms of the valuation of digital assets. Without any doubt, this has limited the growth of decentralized banking solutions. A vast majority of end-users prefer to hold on to the flawed but stable conventional systems, even though they have to sacrifice transparency, speed, and affordability.
In light of this, a new breed of crypto solution, MinePlex.io, have introduced alternate ways to encapsulate the core requirements for enabling a robust financial system. MinePlex believes that it is possible to nullify the drawbacks of conventional and decentralized approaches to banking by integrating elements of both methodologies. As such, it has opted to combine the stability and liquidity of traditional financial services, the disruptiveness of DeFI, and the accessibility of mobile technology to create a sturdier and more complete banking infrastructure.
I recently reached out to the CEO of MinePlex.io, Sulaiman Al-Fahim, to discuss the modalities of the operations of this project. Below is the excerpt from the interview.
Andrey Sergeenkov: Your profile shows that you are a serial entrepreneur and a business magnate. Please share with us your experience in the financial sector.
Sulaiman Al-Fahim: I have extensive experience in creating and managing a large number of different companies. I was the founder and CEO of Hydra Properties. The Head Of Al-Fahim Holding. Leading coordinator in international construction and expansion in the UAE and the middle East.
Andrey Sergeenkov: What is your thought about the global financial market? Are there reasons to believe that blockchain and decentralization will become an essential component of the banking sector?
Sulaiman Al-Fahim: Central banks around the world are considering the implementation of national digital currencies based on decentralized solutions of blockchain technology. The US has already announced that from January 1, 2021, the Federal reserve banks will provide digital dollar wallets to all us residents and citizens. This will help:
Therefore, there is every reason to believe that blockchain technology will become an integral part of not only the banking sector, but also the financial sector as a whole.
Andrey Sergeenkov: What about the drawbacks of decentralization? Do you think that some factors are restricting the mainstream success of DeFi?
Sulaiman Al-Fahim: The decentralized finance industry is a very interesting and promising development of blockchain technology. However, at the moment it is at the beginning of its journey.
Very often there are news that hackers broke the next DeFi Protocol and stole millions of dollars. To understand how a particular Protocol works, you need to have a wide range of knowledge in this area. All protocols are based on smart contracts of the Ethereum blockchain, which is not ready for such loads, as a result of which the Commission for a simple transaction reaches $7. In addition, there is an opinion among experts in the field of decentralized finance that there are several major players in the market. Therefore, when talking about decentralization, we must understand that we are still talking only about the self-execution of smart contracts.
Thus despite all the prospects for the development of decentralized finance so far they can not solve the main problems of digital assets: accessibility for the common man in the street, huge volatility, real-life applications.
Andrey Sergeenkov: How does MinePlex approach these challenges?
Sulaiman Al-Fahim: To solve these problems, we use such a concept as CrossFI (Cross Finance). CrossFi combines the availability, stability, and liquidity of traditional financial instruments with the security and transparency of blockchain technology. This was made possible by the development of both the blockchain technology itself and its legal regulation. Currently, there are completely transparent, legal and almost instantaneous schemes for exchanging digital assets for Fiat funds. This allows you to pay with digital assets almost anywhere in the world. And in order to reduce volatility and make it consistent and predictable, we created our own blockchain, which has a de-inflationary model with double tokenization.
Andrey Sergeenkov: Why is MinePlex focusing on creating a mobile-based solution?
Sulaiman Al-Fahim: It's very simple. We believe that everyone should have access to their finances anytime, anywhere. This was made possible thanks to the mobile Internet, which is an integral part of almost every modern person.
Andrey Sergeenkov: After exploring the structure of MinePlex’s blockchain, I noticed that you and your team have opted for a synchronized consensus mechanism. What are the elements that separate this system from the traditional models?
Sulaiman Al-Fahim: When choosing the blockchain architecture, we opted for a multi-level Tezos blockchain architecture that uses the liquid Proof of Stake consensus algorithm. It combines the advantages of simplicity, speed, and decentralization.
This architecture allows you to make changes and update the system without performing hard forks, so the work of the blockchain does not stop for a minute and you always have access to your funds.
In addition, staking in the LPoS algorithm does not involve blocking funds, they just lie on Your address without any restrictions and work for You.
Andrey Sergeenkov: Tell us more about the deflationary model of your system and how the dual-tokenized MinePlex blockchain will implement it?
Sulaiman Al-Fahim: We use two basic tokens: MINE and PLEX. For staking MINE tokens, PLEX tokens are awarded, so we call the staking process Plexus. The MINE token is not volatile and its nominal value is 0.01$. Both tokens have a limited issue, which is a major feature of de-inflationary.
The issue of the PLEX token is registered in the blockchain algorithm. Each new block is issued once a minute and distributed among all holders of the MINE token. Over time, the issue per block will decrease, which also indicates its de-inflationary nature.
The introduction of new MINE tokens into circulation is possible only by purchasing them through your personal account (20 % of the total issue) and exchanging them for a PLEX token inside the blockchain (70% of the total issue). Thus, the main and only Issuer of MINE tokens is the users of MinePlex Banking themselves.
The non-volatility of the MINE token price and the de-inflationary nature of both project tokens provide additional benefits for users. The rate of the PLEX token in relation to the MINE token is calculated using the Plex complexity formula. This means that the less PLEX token is credited to the MINE token, the higher its value will be. And since the price of the MINE token is constant and non-volatile, the price of the PLEX token changes predictably and consistently.
Andrey Sergeenkov: I also discovered that you and your team are looking to introduce a suite of banking and financial services. Some will argue that this is too ambiguous and ambitious? What are the reasons you think that these objectives are achievable?
Sulaiman Al-Fahim: Over the past year and a half, we have been developing a mechanism for interaction between banking instruments and crypto instruments. We managed to find a solution that we are implementing in our project. With our crypto processing, we can easily interact with banking processing and provide Cross Finance services.
Andrey Sergeenkov: I read somewhere that MinePlex is negotiating with established payment services to ensure that its product is available worldwide. Can you name these payment juggernauts and reveal the status of the negotiations?
Sulaiman Al-Fahim: We are really negotiating. We will be able to disclose detailed information only after signing the contract. But, in any case, we are moving forward successfully, because there are serious intentions on both sides. At the start of the MinePlex Banking project, we will have a solution for debit cards that work with Visa and Mastercard. In addition, we will be able to open accounts for our clients via MinePlex mobile banking.
Andrey Sergeenkov: As a cryptobank, will MinePlex support a wide array of digital assets and fiat currencies?
Sulaiman Al-Fahim: Definitely. At the start, MinePlex Banking will support its own Mine and Plex tokens, and in the future it will expand its functionality and introduce basic cryptocurrencies (USDT, BTC, ETH, XTZ). The range of supported currencies will increase over time. Already in the spring of 2021, we plan to add more than 20 cryptocurrencies to use. Among the Fiat currency, the Euro will be used, in the future - pounds, dollars and most national currencies.
Andrey Sergeenkov: Surprisingly, you and your team are embarking on introducing an innovative education system for blockchain. Why is this a core component of your business?
Sulaiman Al-Fahim: We firmly believe that the community plays a huge role in the success of any project, especially the blockchain project. That's why we want each of our users and basically anyone who wants to have access to knowledge about this amazing technology. Most people either have not heard of blockchain at all or have a very distorted idea of it, which in turn is a big obstacle to its development.
Andrey Sergeenkov: In the next one year, MinePlex plans to embark on a series of launches and implementations. Can you name some of the things to look out for during this timeframe?
Sulaiman Al-Fahim: The main functions of the MinePlex mobile crypto Bank will be launched in November 2020. At the same time, it is planned to launch the MinePlex Banking payment system and cards. In December, we will make a Grand opening of the MinePlex University. In the next six months - a large-scale promotion of the project in Europe and the UAE.
Andrey Sergeenkov: Where do you see the global blockchain fintech market in the next couple of years?
Sulaiman Al-Fahim: If questions about the introduction of national digital currencies are considered positively, then in the near future the blockchain will become as common and everyday thing as mobile communications and the Internet.
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