The number of IPO in the traditional market is decreasing rapidly. We can blame that on high government pressure on an initial public offering. Companies are now turning to get funding from venture capital and/or private equity to start their business. Ironically, this limits the participant of the public offering. The public will only be able to buy the stocks or shares if the companies go public, which most of the time, already increase x2 or more from the initial price. In other words, the rich got richer, while the poor have to keep up with it.
On the other hand, Initial Token Offering, or Initial Coin Offering has become a major way for cryptocurrency projects to get funding. This market is still new, some even call it only a boom. And yeah, there is a lot of problems in it. However, the idea of ICO is good and it might stay as long as it can address several things and shortcomings that currently exist. One of them is to bridge the traditional market to the new and experimental cryptocurrency; a stable cryptocurrency with a strong legal framework.
The Problems
In the current cryptocurrency market, there are a lot of shortcomings. It happens because there is no viable way to avoid the inherent risk from the volatile nature of cryptocurrency. Crypto investor has to trade their return back into fiat currency in order to keep their profit and mitigate volatility risk. However, it isn't as easy as it sounds, especially if they use an exchange that doesn't support fiat trading.
There are several options for crypto traders or investor as outlined in ROCKZ whitepaper to face this problem. One of them is to leave their fiat currency in exchange. However, that is very risky because they have to trust the exchange. Ironically, most exchanges are not regulated. They can get bankruptcy, commit fraud, got hacked (or only claimed as a way to steal money from their investor) and so on. Even if there the exchange provide protection from such a thing, most of the time it is very limited. And judging from what happens in the past, most of the time, everyone will lose their funds after the hack with no way to solve it.
Another option that they can do is to transfer their cryptocurrency to a cold wallet. It will protect them in case of hacking or if there's malfunction on the exchange. However, this still doesn't protect the user from the volatile nature of cryptocurrency. Even if your funds are safe, you might lose profits and in fact, enter loss position due to market crash or bearish trend.
Another option for investors to take profit is to directly sell their crypto to fiat and then withdraw it from an exchange. However, this requires high fees and time. It can take hours or days for exchange to process this. This is a dilemma because this means you can't enter and quit the market as soon as possible. Which is why the idea of a stable currency is born in the first place. However, the current stable currency is still way from ideal, with lack of transparency as one of the most tangible problem.
So, we have an immature market with high volatility, and on the other hand, you don't have a great choice to enter in or out the market and take profits. This is what Alprockz going to solve.
Alprockz Solution
Alprockz is going to create a stable reserve coin, fully backed with real money, which is auditable and transparent. It aims to solve the existing problems that lie in the cryptocurrency market and replace the current dominant major stable coin that lacks transparency. In order to make this goal comes true, I think they have to aim for full transparency because that is one of the major issues on stable cryptocurrency right now.
According to their whitepaper, the ROCKZ issuing company will help investors and traders to exchange their main cryptocurrencies against a ROCKZ. Every ROCKZ issued will be backed by 1 Swiss Franc (CHF) that will be held by the ROCKZ issuing company for the account of the coin holders. The idea itself is not entirely new, most of us should be familiar with the idea of this stable currency.
Another role of the company is to hold up approximately 90% of its reserves in Swiss Francs in a physical paper form which is deposited in high-security Swiss Alp Bunkers and Vaults, as they stated on their whitepaper. The remaining 10% is held with various Swiss Banks to ensure short-term availability of the Swiss Francs.
Reserves are held by ROCKZ issuing company that segregated from the company’s operating accounts. In the case of a bankruptcy of the ROCKZ issuing company, ROCKZ coin holders still have full access to their Swiss Franc fiat reserves. In other words, you'll still be able to get your CHF via bank exchange. This is super exciting if it can get executed properly because the ROCKZ could independently exist even the company go bankrupt.
Swiss Francs
Why Swiss Francs is selected as the currency? Why not the usual USD or other familiar currency? There are several reasons that were mentioned by Alprockz on their whitepaper. Here are the key reasons:
- CHF or Swiss Francs is one of the most protected fiat currency from inflation and devaluation. This is very important and very useful in long-term because you can use ROCKZ as a store of wealth with the flexibility to enter and quit the crypto market.
- If we compare CHF to USD, in the last 50 years, USD has lost 78% of its value while CHF is still relatively solid. This means that in nearly 50 years later, your USD or your stable coin backed by USD could loss it values up to 50%, which is not really good especially if the crypto market is mature enough and gain major support, such as the recent ETP by the SIX Swiss Exchange which is reported to go live next week (from the time of writing this article).
- Switzerland is a politically neutral country, with long-held respect for the private sector that is good for the crypto industry and financial market in general. Government roles and stance is very important in crypto at this moment, especially for the price movement. By making a digital currency in a supportive country, you can ensure that business will likely go very well.
- Switzerland is a key player in financial assets over the world. It accounts up to 25% market share of worldwide offshore, therefore CHF has a strong fundamental value for the global market.
Competitive Analysis
Potential Use Case
Alprockz or ROCKZ has a lot of many uses case. The limits are your creativity and the platform that is available to use ROCKZ. Below are some examples of how ROCKZ can be used.
E-commerce
E-commerce is one of the biggest markets that is currently growing in the world. Almost everybody knows and probably use e-commerce more often than regular shopping. Statistics and research have shown that e-commerce is worth more than hundred millions of dollars. ROCKZ can be used by merchants or customers to pay, buy or sell their stuff. They can enjoy lower fees compared to traditional payment services, faster transaction and most importantly they won't get exposed to the highly volatile nature of cryptocurrency.
Investments
Another usage of ROCKZ, which is probably will be the most utility being used by the users is to take place in crypto investments and tradings. You can use ROCKZ to buy and sell crypto, therefore secure your profits when you're in a profit position. You can also use ROCKZ to contribute in ICO/ITO just as any other crypto tokens. Using ROCKZ will also help ICO projects to mitigate the risk from fluctuating cryptocurrency which can affect their overall collected funds drastically. For example, an ICO that raise 10,000 ETH at December 2017 is probably losing their capital funds at least -5x at this moment due to the market crash. That won't happen if you use stable currency, in this case, ROCKZ.
Money Transfers
One of the most basic usages of ROCKZ is probably a medium of money transfers. It is extremely useful for people who have to transfer their money to their family or friends which is in another part of the world. Using Rockz will help them to transfer their money quite easily and the recipients could exchange ROCKZ into their local currency through exchanges.
operational process
ROCKZ operational process
ROCKZ buying process
ROCKZ selling process
The operation process relies on a daily minting/burning of ROCKZ, based on the demand on the platform. This will be the primary issuance for ROCKZ and where the guarantee of 1 ROCKZ (APZ) = 1 CHF comes from. They said that on the secondary market, the price of ROCKZ will fluctuate due to bid & offer. Somehow this can affect the price of ROCKZ in the market, but remember, the real backing is still the CHF that is held by the reserve. In another word, even though you buy it lower or higher than 1 CHF, you still have access to 1 CHF that is stored on the cold wallet at banks.
Bottom Line
Stable coin or tokens can address a lot of issues in the cryptocurrency market. However, there is still a lot of problems that need to be addressed before stable currency can perform as it wished for. ROCKZ aims to solve the inherent problems in the stable coin that has existed for several years in the cryptocurrency industry. It is interesting to see how this new player competes in the market, and how will the crypto space shapes their future.
You can find more info about #ROCKZ here:
Official website: https://alprockz.io
Whitepaper: https://s3.eu-central-1.amazonaws.com/alprockz-docs/RockzWhitePaperEnglish_v2.pdf
This article is created for potential rewards of ROCKZ tokens from ROCKZ bounty program. All materials are taken from ROCKZ whitepaper and readers are encouraged to do their own research. The writer of this article profile on Bitcointalk is joniboini.