Many of us have been monitoring, investing, trading, HODL’ing crypto. The market is alluring but it is also a dangerous one as many companies fail to deliver. And yet cryptocurrencies are still growing and supplying new use cases.
In this article, Altcoin Buzz decided to take a closer look at the token utility. Below is the list of 5 major consumer use cases for different cryptocurrency projects.
Maker comprises a decentralized stable coin, collateral loans, and community governance. Dai (DAI) is a stable and decentralized currency. It allows businesses and individuals to realize the advantages of digital money without experiencing volatility. Maker (MKR) is the governance token for the DAI Credit System. MKR holders have the important responsibility of making decisions around risk that will impact the future of the system.
The unique concept of Collateralized Debt Position Smart Contracts:
Anyone who has collateral assets can leverage them to generate DAI on the Maker Platform. This can be done through Maker’s unique smart contracts known as Collateralized Debt Positions (CDP). These CDPs hold collateral assets deposited by a user and permit this user to generate DAI. But, generating DAI also accrues debt. This debt effectively locks the deposited collateral assets inside the CDP until it is later covered by paying back an equivalent amount of DAI. At this point, the owner can again withdraw their collateral.
When the user wants to retrieve their collateral, they have to pay down the debt in the CDP. They will also have to pay a stability fee. This stability fee has continuously accrued on the debt over time. The stability fee can only be paid in MKR (or DAI if using the CDP Portal UI).
DAI can be used in various sectors:
- Merchant receipts;
- Cross-border transactions and remittances;
- Financial Markets: Hedging, Derivatives, Leverage;
- Transparent accounting systems;
- Prediction Markets & Gambling Applications.
To date, DAI has already implemented merchant Transactions. All other sectors are currently in progress.
- Use Case #1: Price Stability in Merchant Transactions
MakerDAO has a partnership with Dether, which is creating the biggest ecosystem of cryptocurrency individuals and shops in the world. Dether is the first p2p marketplace to bring DAI to the masses, and become an essential component for retailers to accept cryptocurrency.
One of the main concerns that shop owners highlight when it comes to accepting cryptocurrency as a means of payment is volatility. Business owners feel that it’s not economically sustainable to have their income decrease because of the high volatility of cryptocurrencies.
Use Case #2: Lending system using Collateralized Debt Position
The most important game-changer for MakerDao will be Lending through Collateralized Debt Position. It is still a work in progress and will be made more effective in the coming days.
- Bob needs a loan, so he decides to generate 100 DAI. He locks an amount of ETH worth significantly more than 100 DAI into a CDP and uses it to generate 100 DAI. The 100 DAI is instantly sent directly to his Ethereum account. Assuming that the Stability Fee is 1% per year, Bob will need 101 DAI to cover the CDP if he decides to retrieve his ETH one year later. (the example is taken from MakerDao’ s website).
- There is a drawback! It’s the Stability fees (or the interest rates)
MakerDao initially started with rock-bottom Stability fees of 0.5%. But the code behind MakerDAO requires a fluctuating stability fee. It is a technological necessity for keeping its DAI stable coin worth $1. The stability fees have risen as high as 19.5%, and currently is at 12.5%.
Currently, MakerDao is using only Ethereum as Collateral. It is now in the process of implementing Multi-Collateral DAI (MCD), which will include exiting features like:
- Additional Collateralized Debt Position (CDP) collateral types:
– Maker Voters are evaluating the following tokens for inclusion in Multi-Collateral DAI: Augur, Basic Attention Token, DigixDAO, Ether, Golem, OmiseGo, 0x.
– Maker is trying to make any kind of asset that can be tokenized available as collateral in the system. Of course, the asset should meet the appropriate risk parameters.
- The DAI Savings Rate: DAI Savings Rate (DSR) will further differentiate DAI from other stable coins.
- Multi-Collateral DAI will offer an option to earn savings simply by holding DAI.
o Depositing and withdrawing DAI will happen via an easy-to-use dapp.
o DAI Savings Rate will play a role in maintaining DAI’s soft-peg to the US Dollar by stimulating demand for DAI.
Tael (Formerly Wabi)
Tael is a decentralized loyalty point blockchain solution. It is easily recognizable and integrated in a leading marketplace for genuine and authentic products. The Tael brand is focused around trust and aims to integrate Tael as a method of payment in every store.
Tael is a loyalty token used in the ecosystem of verifiable safe and authentic products.
It runs a WeChat store whose current portfolio includes: infant nutrition (62 products), supplements (37 products), cosmetics (85 products), Mother and Baby care (64 products).
Tael shows the number of users (not just holders) on the website, it is currently >14,000. The number of users recently surpassed the number of people just holding the tokens.
How does it work?
To begin with, the consumers are rewarded with Tael through the simple acts of purchasing and authenticating products by touching Tael NFC label with their mobile phone. Then, merchants purchase Tael to utilize as a marketing tool and gain valuable insights.
Also, the exchanges give consumers full control over their rewards, allowing them to gain real value. Thus, with more consumers holding Tael, more ERC20 Tael tokens are taken out of the circulating supply. Besides, when using Tael for purchases each consumer receives Taels again, so every consumer is effectively a lifetime holder.
Use Case: The Rakuten Partnership: Identifying counterfeits
Counterfeiting is a widespread problem in China and is especially prevalent among imported goods. Each Tael product is protected by unique NFC and blockchain-backed anti-counterfeiting technology.
Rakuten, Japan’s largest e-commerce platform, and the world’s third-largest e-commerce marketplace is leveraging Tael’s platform to sell Rakuten products in China. The platform already sells >80 different Rakuten products. It includes some of the most demanded Japanese cosmetics and mother care products.
Tael’s anti-counterfeit technology allows Chinese consumers to verify that they have received a genuine Rakuten product. This gives a unique value advantage for cross-border e-commerce.
The apart from traceability, major benefits for consumers and Rakuten include:
- Rewards in a new way
Unlike other loyalty tokens, Tael rewards translate into real value. No expiration dates, no restrictions on redeeming, no fuss. Just real value for real actions.
- Loyalty program as a service
Rakuten will is given a built-in loyalty program and a new marketing channel directly linking them to their customers, without the usual costs and maintenance.
- Maximizing the power of data
Rakuten gains deep consumer insights which is impossible to acquire in other ecosystems, such as proof of consumption, product scan rates, consumption time from moment of purchase, comparative data metrics for competing products, and more.
Tael wants to find true mainstream adoption in the Asian markets by appealing more effectively to their target audience and increasing the use-case of the token beyond the safe retail channel.
For example, the partnership with Send2China covers much of Tael’s Europe-to-China logistics network. The partnership with PCA Express plays a vital role in getting high-demand New Zealand, Australian, and other Asia Pacific countries’ goods to Chinese consumers. Partnerships such as these will give Tael access to massive logistics networks around the world, assuring its ability to get foreign goods (secured with anti-counterfeit smart label) to the China market, expediently.
Enjin is a decentralized platform to manage, distribute, and trade virtual goods. It gives gamers and content creators a new model of virtual ownership.
Enjin Coin is a token on the Ethereum Blockchain. It can be used to create in-game items and as a way of secure payment. Items made with Enjin Coin will hold real-world value, provide true ownership and so much more.
Enjin has developed the ERC-1155 token standard that enables users to create every type of asset, from currency and real estate to digital art and gaming items.
Use Case: Gaming – Dissolution
Enjin Coin is the first cryptocurrency with an authentic purpose for online gamers. SDKs for multiple languages, wallets and payment platforms are available and completely open-source. Online gamers can bring or trade their assets from game to game, community to community, growing their digital wallet with real value as they play.
9Lives Arena raised $41,845 US in a successful Kickstarter campaign by offering ERC-1155 collectibles as rewards.
We will have a look at how Dissolution is using the Enjin Platform.
Dissolution is a free-to-play MMORPG space-sim with both infantry FPS and ship combat set in a persistent universe in the 24th century. It has a 5-year process to become a fully-fledged MMORPG. Currently, Dissolution is in the Alpha FPS stage of development.
The primary benefits include:
- True ownership of in-game assets
Enjin’s ERC 1155 Tokens allow players to own their hard-earned items outside of Dissolution game server as a blockchain token. This token will can be held in a player’s own wallet, and can be used in the Enjin Multiverse or Future Dissolution Games.
- Ease of Player Monetization
Typically, MMORPG players will participate in many competitive and collaborative community activities to earn higher levels and items, as it brings them more respect within their community. Due to this, players are highly motivated to pay real money for attractive items, which allowed players who were willing to sell them to make a decent profit. Enjin Tokens can be traded on established exchanges such as Opensea which takes a very small percentage in comparison to its centralized competitors such as Steam.
- Real Economics
Enjin is able to enforce realism in a video game economy due to its immutability and transparency. A general use-case is counteracting the effects of hyper-inflation commonly seen in MMO titles by controlling an item’s supply on the blockchain. Enjin increases the collectability of rare items by limiting their supply in-game.
Other benefits include
- Game Publishers / Content Creators;
- Mint non-fungible items or special edition items;
- Run a decentralized payment gateway with no middle-man;
- No fraud, chargebacks, or cancellations;
- Open-source suite of APIs and SDKs for every popular platform and engine;
- Smart wallets that facilitate easy automatic payments from users;
- Benefits for Gamers;
- Convert custom virtual goods directly back to Enjin Coins and retain value;
- Buy in-game items on thousands of game servers and games that support ENJ;
- Prove ownership of items by showing them off in website widgets.
Enjin is currently expanding in Japan. With over 67 million gamers and an estimated $19 billion in gaming revenues, Japan is the third-largest games market in the world—and a prime location for Enjin’s blockchain gaming innovations to take hold.
Enjin has entered into a strategic partnership with Tokyo-based HashPort Accelerator. HashPort will serve as a business liaison and provide Enjin with localization support, including assistance with getting Enjin Coin (ENJ) listed on cryptocurrency exchanges and business matching with Japanese companies with potential synergies.
Crypto.com (formerly Monaco) started in June 2016 with the vision of ‘cryptocurrency in every wallet’. It is on a mission to accelerate the world’s transition to cryptocurrency. Crypto.com is building an outstanding and defensible platform to solve access and usability challenges in the blockchain industry, and power redefined financial services to improve the customers’ experience.
Products and Services:
Crypto.com is currently providing the below products and services:
- Crypto.com App: To buy, exchange, send and track cryptocurrency;
- MCO Visa Card: To spend cryptocurrency in the real world;
- Invest: It is an innovative portfolio management product which makes it easy to buy a basket of cryptocurrencies;
- Credit: An instant loan product – to get credit to spend on the MCO Visa Card by depositing cryptocurrency as collateral;
- Earn: To earn interest on crypto deposits.
Use Case: The MCO Visa Card
Crypto.com’s Flagship product is the MCO Visa Card which has seen massive adoption and is a flag bearer with over 1 Million Downloads of the crypto.com app. Its design is all about combining the features of credit and debit cards with those of cryptocurrencies. The basic function of these cards is to provide the users with the ability to buy, sell, trade and spend crypto in parallel with fiat currencies.
Primary problems it resolves include:
- Ease of Transactions: Being a Visa card, it makes buying and spending cryptocurrency easy, from any location. Around 40 million retailers accepting Visa should support it.
- Low Fees: Very low transaction fee in international transactions, compared to regular credit or debit cards.
Other Value Proposition
- A Metal card with no annual fee;
- Free ATM withdrawals;
- Tap-and-pay feature;
- Free shipping;
- No minimum balance requirement;
- Up to 5% cashback on ALL Spending;
- Special offers for Spotify, Netflix, Expedia and Airbnb users;
- LoungeKey Airport Lounge Access for selected cards;
- US users can top up their cards through direct bank transfers via the ACH Network.
There are 5 varieties of MCO Visa Cards currently offered in the market, based on the amount of MCO staked (which is also linked to the benefits provided). The Midnight Blue card is free and does not require any staking.
When our CEO, Shash, who holds an MCO Singapore Visa Card, visited India, the card worked absolutely fine! (Note that the Reserve Bank of India has instructed banks not to deal with cryptocurrencies).
Crypto.com has a very aggressive roadmap for the coming days. Major milestones include:
- Crypto.com Pay merchants and Mainnet go-live;
- MCO Visa Card Asia Pacific expansion;
- The card’s shipment to Europe and Canada.
Read the latest Crypto.com AMA here.
Binance Coin (BNB)
About Binance Coin
Binance is the World’s Leading Cryptocurrency Exchange. BNB, or Binance Coin, is Binance’s native coin.
It has several use cases, including paying:
- Trading Fees: Receive a 25% discount using BNB;
- Travel exchanges: Travel the world and pay with BNB at travel merchants in Australia;
- Making purchases via XPOS: Purchase anything that accepts XPOS device by PundiX;
- Use BNB in Decentraland’s auctions;
- Take loan with BNB as collateral;
- Trade Stocks;
- Stake and shift BNB via Mithril’s VAULT Wallet.
And many more.
Use Case: How Binance is changing travel payments
Binance has recently invested more than US$2.5 million in TravelbyBit, an Australian based start-up.
The company acts as a travel brokerage service where customers can pay in cryptocurrency for flights and hotels rather than fiat currencies. Accordingly, it connects a huge amount of merchants.
TravelbyBit has facilitated the world’s first cryptocurrency friendly airport in Brisbane and is working on bringing this functionality to other airports. Binance’s investment will enable TravelbyBit to introduce new point-of-sale (POS) payment systems powered by blockchain technology. These systems will be installed at major airports around the world.
TravelbyBit has also partnered with the famous Australian Crypto Town, Agnes Water, Queensland. Businesses in Agnes Water have begun are accepting BNB. Travelers can hire tourist bicycles, get beach tours, holiday packages, and even kangaroo sanctuary visits all paid by BNB.
Binance is huge, with a reported revenue of $1 billion. BNB’s use cases are spreading across various industries and more and more partnerships are enabling the adoption of BNB. We see a bright future for BNB.