The new blockchain finance sector — 3 companies that will find their niche

Blockchain will be just way superior to traditional business models in just about every industry sector.

Ok, I say ‘will be’ because blockchain and cryptocurrency are still in their infancy and there is a little way to go before businesses start leaping onto the blockchain wholesale.

It has taken time for blockchain startups to get financed (ICOs) and to build their tech. Also, no one is sure just how regulation will play out so big Wall Street investment is still on the sidelines looking in.

One thing is for sure though, replacement of existing business models with blockchain will happen sooner rather than later.

One sector where things are really starting to happen is in Finance and this essay is written from the perspective of disruption of this sector and the companies that will flourish in three of the finance niches.

Lendingblock — Cross-chain crypto to crypto lending

“Lendingblock, a cross-chain professional trading exchange that specialises in crypto to crypto loans. They are focused on bringing the securities lending model to the digital asset economy.”

Lendingblock has a hugely competent team with vast experience in banking and fintech. They have been under the radar for a long time now and they are unique in that they are not looking to attract your average retail investors which other lending companies such as Nexo, Ethlend and Moneytoken are focussed on.

In fact, Lendingblock has far bigger fish to fry and is targeting the really big players such as hedge funds, institutions and exchanges.

A really big competitor, Genesis Capital, is one of the biggest institutional OTC providers and has now become the first institutional provider for borrowing and lending cryptocurrencies with more than $500 million in loans flowing through its platform since launch.

However, Lendingblock differs in that it’s platform is electronic whilst Genesis Capital’s is manual — making Lendingblock’s platform infinitely more scalable. If that wasn’t enough, both companies have now partnered and Genesis Capital was among the first of about 25 or so institutional lenders and exchanges to sign up for Alpha group testing of the Lendingblock platform.

The Lendingblock platform will be using real capital and real Lnd in Q4 after the Alpha group testing and is then set to launch for all investors in Q1 2019 and so the price should be ticking up quite soon. A small market cap of only $3 million means that there is plenty of room for growth and the present price is about a quarter of what it was at listing. Do the maths…

Polymath — the ‘Ethereum’ for security tokens

“Let the stampede begin”

The rallying cry from a platform that seeks to be the link between Wall Street and the blockchain. Polymath is a dApp built on Ethereum that tokenises securities. If you consider that ICOs raised over 7 billion this year in capital to mainly fund utility tokens you might get a little excited to think that STOs (Security token offerings) can potentially tokenise trillions of dollars of securities. Imagine the whole of Wall Street tokenised!

When we are talking securities we are talking regulation and compliance. How Polymath gets around the problem of allowing any business to tokenise their assets is that they have built KYC and regulatory requirements into the token itself so that it can only be transacted by verified and authorised holders.

This does sound problematic for small time investors wishing to buy tokenised assets and only being able to buy certain ones because of the country they come from and as to whether they are accredited or not. Proponents of decentralised cryptocurrencies would probably take umbrage with this system.

However, holders of the Poly token would look to see huge gains in growth as more and more businesses pay in Poly in order to launch their own STO. Also, another part of the service Polymath offers is to take care of legalities in order to ensure that businesses are totally compliant — again, paid in Poly.

Polymath has huge partners backing it and has one of the biggest communities out there. The Poly token price at present is fairly near its bottom. Look for this to rise as security tokens become the next big thing in the world of crypto.

Digitex Futures — The commission free futures exchange

The US futures market was estimated to have a value of $27 trillion in 2017! When even a part of this arrives on the blockchain well…

Futures are a contract to buy or sell an asset on a given date with an agreed price. Futures typically earn (or lose) money much faster than trading stocks given that price volatility is a lot greater. They are also highly leveraged with the requirement to put up only 10% to 15% of the actual contract.

The Digitex Futures token sold out at ICO in only 17 minutes — giving a feel for how highly rated this platform is. We are now very near the actual launch of the platform in Q4 and traders will be able to make short term trades for 0% commission, something that is not available anywhere else. Digitex covers its costs by minting new DGTX tokens when needed.

In order to provide the necessary liquidity Digitex have ‘market makers’ in the form of automated trading bots that will work to tighten bid and offer spreads, using a pool of 200 million DGTX put aside for this purpose.

The DGTX token utility is for profits, losses, margin requirements, deposits and withdrawals thereby causing traders to hold the token and creating demand.

Conclusion

These are just three blockchain startups that are poised to fill gaping niches in the blockchain finance sector. They are all leaders in their fields and should blockchain and cryptocurrency gain the massive traction that looks like happening next year then they will be first movers and will look to begin the task of becoming key players in a brand new world of finance.

Disclaimer: All the above views are my own and should in no way be taken as financial advice. All those wishing to invest in the crypto market should do their own research or use the services of a fully certified financial advisor.