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Evidently, there is this understandable rush for compliance. Blockchain investors as well as enthusiasts don’t want to get caught on the wrong side of the law. And as regulators jostle to thoroughly understand the mechanics of blockchain, there is an obvious shift from the investment side. Increasingly, they prefer security tokens to utility tokens due to the rights conferred by the former. Security tokens are digital shares of a company that are compliant with jurisdictional law meaning investors are protected against foul play. Of the many security tokens out there, perhaps Nexo is the most visible.
Just recently, they paid out millions in dividends to token holders besides publishing a detailed report informing stake holders. Even so, it must be understood that blockchain, although being an efficient and disruptive tech, doesn’t exist in isolation. There are rules and coincidentally, security tokens are in the middle of this maze. In simple terms, a security token is a token that derives its value from an external asset. In turn that asset is subject to existing laws mostly governing securities.
The asset in question can be traded in the free markets but assuming the startup fails to comply, consequences tend to be severe, even derailing the project’s roadmap since associated penalties are usually huge. The most distinct characteristic of a security token is its ability to act as representation of share of the company’s assets, voting rights, earnings or basically anything deemed to be valuable.
In essence, security tokens are created as investments, and investors have the right to receive dividends. While there are platforms that are active in this front, Dusk Network’s advances are noteworthy.
Introducing Dusk Network
In their homepage, Dusk Network describe themselves as a “a cryptographically transparent digital ledger. A high-throughput and scalable permissionless blockchain that provides confidential proofs of ownership, compliance and funds. It satisfies global privacy requirements yet enables audits by the public and the regulator.”
Condensing this, the network is simply a privacy protocol layer from where developers can build private ZK proofs dApps thanks to their smart contracting ability.
Moreover, Dusk Network’s native currency Dusk can act as money. The security tokens generated from this platform are compliant with existing laws, are contractually audible and private.
Depending on the need of the issuer, their tokens can be enterprise or consumer grade where interested party can issue, register and trade securities in a platform that has been designed to prevent unwanted forks, power centralization and uncertain transaction finality.
The main pillars of Dusk Network are as follows:
- There is privacy which eliminates bad actors from their ecosystem through the use of revolutionary privacy technology protecting trade secrecy and simultaneously remaining compliant with privacy data laws like Europe’s GDPR. Some of these privacy technologies include the use of Garlic routing, secure tunnel switching-which secures communication, and Segregated Byzantine Agreement (SBA) meaning computational requirement is low.
- A privacy-centric blockchain inculcating Confidential Security Contracts (XSC). Because of this, there is trust and resilience. Indeed, Dusk Network is the first blockchain that is specifically designed for the regulated markets. Through XSC, participants-that can be businesses or investors, can share real-time rich registry.
- Business continuity since all supported data, saved on the blockchain are validated and secured cryptographically by nodes that are evenly distributed across the globe. Dusk Network does this while remaining resilience, bulletproof and above all reliable.
The Dusk Network core team is diverse and experienced with valuable years at Amazon, TomTom, Mozilla and background where the majority worked in blockchain development. Consisting of developers and members of the business community, the team is overly determined to make the project as successful as possible.
Emanuele Francioni is the Project and Tech Lead. He is a certified SCRUM master. Meanwhile, Fulvio Venturelli is the Lead Researcher & DevOps while Dmitry Khovratovich is the lead cryptographer. During his time at the University of Luxembourg and “Amis de l’Université”, he was honored and received the Best PhD Thesis and the Best Paper Award during the Program Committee of ASIACRYPT 2010 conference in December 2010. Then there is Matteo Ferretti, the Lead VM Architect, Jules De Smit and 10 other members.
On the advisory end, James Roy Poulter, Aylon Morley, Gary Quin, the Senior Advisor of Credit Suisse and Marcel Roelants the advisor at BitPay are involved. There are four other advisors including Nicolas CIMON and Ivan Poon, the co-founder of Switcheo & Payboy.
In an intertwined ecosystem, the Dusk Network has already forged partners with exchanges, associations and individual companies.
Aside from listing in Binance and Binance DEX, and being a member of the Binance Info Transparency initiative, the Dusk Network has a working partnership with Bitfinex and Ethfinex. It is also a member of the BlockVenture Coalition which describes itself as the “largest alliance of university blockchain groups & venture capital funds.” Being a member, they add, brings forth the chance to “collaborate with blockchain groups, gain visibility with VC funds, build relationships with top exchanges, connect with industry leaders.”
Dusk Network also works with The Reserve, an institution “Governed by ethics, an ethos of doing right, a mandate to make a positive impact and an institution 100% pledged to the world,” WatsonLaw whose objective is to build a “framework for growth” and Infloat that has a presence in eight countries.
Other partners include Ethfinex, Switcheo that paves the way for secure, multichain trading experience, Bittrex International, Web3 Ventures and LiteBit.
Details of Dusk Network (dusk)
The creators of Dusk Network reiterate that a thriving economy can’t simply be created out of scratch but rather it emerges from underneath the technology. Dusk Network is therefore an expression of this technology.
With a pre-defined set of methodologies, principles and rules, the network rewards good players and punish those with bad intentions. Powering the ecosystem is the Dusk security token.
Native to platform, Dusk acts as money that is used to operate the platform’s functionalities as Dusk transactions or XSC-based securities. The token is easy to use, compatible and therefore used for rewarding stakeholders and paying dividends.
Typical of any public blockchain, every transaction within the Dusk Network attracts a network fee which is then used to sustain the operations of the platform and the fees are levied on both Dusk transactions and XBC-based securities. Besides, there is a one-time fee levied for a Confidential Security Contract that is published on the network. This is for incentivizing stake holders who processed the information.
About Dusk Token
Dusk is an BEP2 and ERC-20 token that is currently operating from a platform in test phase. In their crowd funding, 50 percent of the 500 million Dusk tokens were available for public investment. Each token can be swapped for other XSC-based tokens through atomic swaps. However, Dusk tokens can be staked and through them, users can participate in striking consensus. Besides, like ETH, it is used for paying gas when deploying dApps and emitted through block validation where a portion of these tokens will be channeled towards a development fund.
40 percent was dispersed as ERC-20 tokens and 10 percent as BEP2 tokens. Both tokens were vested and there is a linear vesting contract in place that will end on Nov 30, 2019 for ordinary investors. Otherwise, there has been an extension of the vesting period for big players.
About Dusk Network ICO
The Dusk crowd funding was a success. Then the project raised $8,075,557.00, which was more than 4X of the soft cap of $2 million and $6.4 million short of the hard cap of $14.4 million. During the ICO–which was done from Aug 1 to Nov 30, 2018, each token was available at $0.0404. Only BTC, ETH, USDT and Euro were the accepted currencies but investors from Yemen, North Korea, US, Canada and several countries were barred from participating.
There was yet another IEO carried out between Oct to Nov 2018 where each token was available at $0.0576, raising an additional $1.33 million.
Tokens were distributed as follows:
- 50 percent for private investors
- 18.1 percent for development
- 11.8 percent for exchange partnering and ecosystem development
- 7.3 percent for marketing and PR
- 6.4 percent for the team
- 6.4 percent for Advisors
Market Cap, Trading Volumes and ROI
Presently, Dusk has a market cap of $13,997,723 from a circulating supply of 102,941,176 attracting daily trading volumes of $2,274,283 with a daily trading range oscillating between $0.124536 and $0.137813.
Dusk is on average trading at $0.13 and supported by several exchanges. Majority of trading stems from Binance where it is paired against ETH, BTC, BNB and stablecoins as PAX and USDC.
The token is also traded at Hotbit and Bittrex where it is paired against BTC, and Switcheo where traders can liquidate their ETH for Dusk. So far, Dusk is in the top 250 as per market cap ranking. Further, from ETH scan there are 13,876 unique addresses that have so far generated 30,800 transfers.
Token distribution reveals a little bit of centralization as one address holds 52 percent (or 264,069,328 dusk tokens) of the total token supply.
The ROI of Dusk in USD terms from the ICO and IEO is 3.35X and 2.35X respectively.
Short Term Catalyst
There is evolution, and the team proudly acknowledges that development from inception has been remarkable. Not only are they working on improving their technology’s primitives as they work from the ground-up but they recently released a second white paper detailing advancement made.
Some security features from their years of research include Private Proof-of-Stake protocol, a Permission-less Proof-of-Stake protocol with statistical finality guarantees, a Quasi-Turing-complete Virtual Machine with zero-knowledge proof capacity and a Confidentiality-preserving account-based transaction model.
All these developments were rolled out while the network remains as open source and private as possible. Understandably, their objective is based on privacy and platform from where institutions or retail consumers can launch smart contracts controlling digital assets and securities.
Although the project is in test net, it has already listed at leading exchanges as Binance and Binance DEX, Bittrex, Bitfinex from where it crowdfunded during the IEO. Overly, that means Dusk is liquid and on a true path of eliminating technical barriers, hindering mainstream issuance and trading of regulated digital products.
Already, the daily trading volumes of Dusk token exceed $2.2 million and with an ambitious path, it only means that institutions seeking to invest on blockchain startups whose tokens or dApps are regulated and compliant with the existing laws would find it easy to settle on the Dusk Network. Investing on any STO based on the XSC smart contracts mean payment in Dusk.
Consequently, the more the demand, the higher the value of Dusk tokens. Ideally, if Dusk network goes mainstream triggering a network effect, Dusk as a native currency of the platform will benefit and it’s only safe to say that the trajectory of its value will be northwards.
On that route-and desirous of becoming the Ethereum of Security token offerings, BWRE, the Maltese real estate firm will be the first to tokenize their asset and hold their STO on the Dusk Network.
The objective of the STO will be to raise $24 million. Dusk Network will receive the assistance of iFinex, the parent company of both Bitfinex and Ethfinex.
Commenting on the announcement, Dusk Network’s business lead Jelle Pol said:
“We are extremely keen to showcase what Dusk Network can do as a layer 0, and really see working together with parties like BWRE as a great kickstart to our ecosystem. We cannot wait to see more platforms use Dusk as an underlying protocol.’’
Long term Catalysts
Given, an STO as an alternative to fraud-and-scam ridden ICO is a viable option for companies searching for the much-needed liquidity. The Dusk Network is readily providing them with a platform where investors can draw benefits-not just utility, from the ownership of the company’s tokens.
Note that in line with their goal of providing privacy and concurrently adhering to regulator’s requirements, Dusk Network complies with AML and KYC regulations meaning there is an element of whitelisting, privacy compliance, management of contractual restrictions and adequate support for clients whenever transactions fail.
Regardless, with the ground work required for perfect streamlining and sensitizing the investor space that there is indeed a window for investing in blockchain startups without the risks of being defrauded, the platform has a lot to prove itself.
All the same, Dusk is getting their infrastructure ready. If everything goes as planned then 2020 could be a great year for the yet-to-be exploited STO landscape. That means Dusk as a native currency for the STO ecosystem is at a pole position, strategically placed in a maturing sphere.
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