BANKEX is a Bank-as-a-Service on blockchain, building the Proof-of-Asset protocol. BANKEX’s main product is the Proof-of-Asset (PoA) protocol, which aims to solve the issue of asset liquidity. Proof-of-Asset means that the token issued as part of the protocol is backed by an actual asset.
BankEx defines itself as a “Bank-as-a-Service on blockchain”, which somewhat cryptically refers to a platform that enables banks to exchange products via smart contracts. The BankEx platform is based on its main product and development – the Proof-of-Asset (PoA) protocol. PoA compliant tokens are backed by actual, real-world assets, and provide liquidity for those assets. Unlike other specific asset-backed tokens, BankEx’s PoA protocol has a modular structure and allows tokenization of different types of assets.
The company’s target assets for tokenization are (according to their website’s FAQ) “a class of assets with a summary capitalization exceeding 100 million USD, that generate or are able to generate cash flow.” BankEx is focused on tokenizing and creating liquidity for financial assets, but, as stated in their whitepaper “do not think it impossible to apply the Proof-of-Asset Protocol in other fields, with approval from the BANKEX Foundation in case of non-financial Smart Assets.” In its whitepaper, BankEx describes what it does in the following way: “We take a client asset, primarily on the financial market, we tokenize it, then, without waiting for the portfolio to accumulate critical mass, we turn this asset into money for the bank. This is made possible through formation of a single pool of similar assets (e.g., pool of banks) thereby creating a marketplace, where banks benefit from liquidity and investors benefit from a predictable and transparent cash flow.”
Prior to the development of their crypto-focused products, BankEx Labs was already providing fintech solutions for banks such as “KYC Findostakva”, crowdfunding for loans, securitization for loan companies, etc. Bankex ended up gathering all its products under a Bank-as-a-Service ecosystem. The ecosystem includes a fintech laboratory BankExLab.com, a crypto-invest bank BankEx.com, and finally BankEx.org, which develops a combination of various smart contracts individually engineered for each type of asset.
How does it work?
To showcase the Bankex proof of asset protocol, let’s take an example and simplify the steps.
Let’s take as an example a car owner that wants to sell it.
- Bankex gathers information about the car and the client, identifying the client via wallet address, email, and a KYC check. Once verified, the client can upload information about his car.
- Bankex checks the availability of the asset, its location, and other details. It does so either by using an IoT sensor (example : sensor plugged on an electric car can upload to the chain its full report) Or by using an external oracle. An external oracle is a third party that audits and validates the client’s inputs.
- Bankex Verifies the delivery terms and conditions in the specific jurisdiction. ( taxation, logistics requirements to move it, … ).
- Bankex inputs all the information into a formula that turns the inputted data into a smart contract. For each kind of asset a specific kind of formula (car, equity, office space, … ).
- Using Bankex protocol, the smart contract is translated into a smart asset. In our case a car token.
- The smart asset is verified by Bankex and in some cases by expert review.
- Bankex runs the car token through several product filters so that buyers can find it in the Bankex market.
- Bankex puts the car token in the market and starts matching Asks and Bids.
- Once a match is made between a buyer and the seller then the final price is defined.\
- The product Token is then delivered to the buyer and the seller gets a Bankex tokens. It is important to note that carved in the initial smart contract is data about the car’s location, customs, Etc,… Now that Bankex got information on the buyer too it can trigger a shipping order to a third party to deliver the car to the buyer.
It is important to note that when it comes to physical goods, there are plenty of grey zones in the Bankex marketplace processes. Transferring ownership of shares, bonds might be smooth following the steps stated above, but once a physical product is into question, Bankex didn’t really come up with something that outperforms the current marketplaces model:
Product ownership transfer: Aside from owning a smart asset on the blockchain, it is not clear how Bankex grant product ownership, legally, in the real world.
Product transfer (logistics): Once the ownership transfer done, shipping the asset from the seller to the buyer gets challenging. The cost of transfer of a car from Canada to Zimbabwe can’t be calculated automatically and needs special quotes and timelines from freight forwarders, it is unclear on how this kind of parameters will be included in the smart asset.
Product double spend: Another challenge is guaranteeing that once a product is tokenized it cannot be sold outside the platform. Bankex team, says they will address the problem by developing assets digital fingerprinting technology.
Token usage :
BKX tokens allow you to :
- Get access to BANKEX ecosystem
- Real-world assets tokenization
- Create new smart contract chains for new types of assets to tokenize
- Buy smart assets from BANKEX Exchange
BANKEX’s tokens will be ERC20 compliant and will be based on the Ethereum blockchain. They will require ‘gas’ for transactions. The private sale was concluded in July and lasted two weeks with a little bit over $1,500,000 raised.
During the ICO the exchange rate will be around 500 tokens per Ether, meaning the minimal price would be 1/500 Ether since the minimal possible purchase is 1 token.
Public token sale will start on the 28th November, 2017 and no information regarding an end date has been given as of the writing of this review. The team will issue a total of 400.000.000 BKX tokens.
Bankex is expecting to sell around 220.000.000 BKX tokens, 40%-50% of which will be sold during the pre-sale (pre-sale minimum is 100 ETH).
Unsold tokens will be frozen for 1 year minimum – in the same ratio as at ICO. The number of unsold tokens will be frozen on a 45/55 Ratio, meaning for 55 million tokens not sold, 100 million tokens will be frozen. This will take the total pool of Tokens from 400 million to 300 million. This way, the tokens sold will always represent 55% of the total circulation, in our example it went down from 220m (55% out of 400m) to 165m (55% out of 300m).
Further details will be unveiled as the team closes on the ICO Date. That said, the ICO date was moved from August to October and now the team just communicated through Slack that it is postponed to the 28th of November.