NEXT Report Blockfyre

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1. SENTIVATE REPORT BY BLOCKFYRE | PAGE ‹#› BLOCKFYRE
2. Executive Summary • Hybrid exchange combining CEXs & DEXs features • Exchange ecosystem with its own underlying chain (asset creation possible) • Mining & Masternodes available • Trading fees will be redistributed amongst NEXT holders • Several FIAT gateways and FIAT pairings for every listed asset Highlights Risk & Concerns • New roadmap still to be released. Thus, the longterm strategy cannot be properly assessed yet. • Customer attraction will be crucial as for every new exchange • If NEXT.exchange is successfull, its growth potential is immense. However, there is tough competition within this area and it remains to be seen if the team can deliver on their highly ambitious goals. Ticker NEXT Price 0.0019 ETH Pre-Sale Price 0.001 ETH Market Cap $1,733,716 Circulating Supply 3,392,619 Maximum Supply 44,275,983 Token Type ERC20 Mainnet Live Website next.exchange NEXT.exchange is a digital asset exchange that was founded in 2017. With their hybrid approach they are trying to combine the best f e at u re s o f t o d a y ’s c e n t ra l i z e d a n d decentralized trading platforms, to ensure security while maintaining functionality. Overview Source: Blockfyre Research | NEXT website
3. What problem does it solve? Disadvantages of CEXs • CEXs come, as the name already implies, with centralization, and are hence contradicting the actual purpose of trustless systems that DLT technology aims to deliver. • All digital assets deposited by all users of the exchange usually end up in one or only a few hot wallets, of which private keys are not known to its users. In theory, they are losing ownership and control over their assets, while the CEXs just permit the users to transact these currencies. • This common feature of CEXs displays a significant security issue, as potential hackers would just need to gain access to one or a few private keys. • Additionally, even the order books remain centralized, leading us to the next disadvantage. CEXs are frequently accused of wash trading, which is currently gaining more and more awareness within the crypto-space. With the artificial increase in the trading volume and liquidity, users are erroneously attracted. • It is also worth mentioning that centralized exchange platforms can flat out manipulate the entire trading experience, by pausing deposits, withdrawals, and transfers of assets during valuable times in pursuit of personal gain. But: Comfortable ease-of-use x Source: Blockfyre Research | NEXT website
4. What problem does it solve? Disadvantages of DEXs • Current DEXs aren’t really able to solve the issues of questionable CEXs they are aiming to combat. The lack of a comfortable user interface may not sound like much for experienced traders, but is actually seen as a major disadvantage by many. • Additionally, as the technology underlying of DEXs hasn’t really caught up with CEXs’, DEXs lack quite a lot of functionality so far and scalability leaves much to be desired. • Last but not least, they are often currency-centric. As they are usually built on a particular Blockchain infrastructure (i.e., Ethereum), DEXs consequently support trading of the respective currency as a sole base pair (i.e., ETH & ERC20). But: Users in control of their assets, Wash trading more difficult per se x Source: Blockfyre Research | NEXT website
5. What problem does it solve? Disadvantages of CEXs & DEXs • However, there are also drawbacks that belong to both, CEXs and DEXs. Firstly, all DEXs and most CEXs lack proper FIAT gateways, making it difficult for new users to enter the crypto-space and familiarize themselves with the decentralized landscape. • Besides, it would also be desirable that each coin offered on a platform would be directly paired against any FIAT currencies, while most of the current solutions provide this solely for the biggest cryptocurrencies and the provided fiat options are typically limited to USD / EUR, depending on the exchange. • Furthermore, an always reoccurring issue with digital assets is regulation. Most of the exchanges that are not strictly following KYC / AML legislations, always run the risk of facing regulatory complications. However, this depends upon the jurisdiction in which a given exchange is operating. NEXT.exchange is ambitiously dedicated to tackling the disadvantages of current exchanges by combining the strengths of both, CEXs & DEXs x Source: Blockfyre Research | NEXT website
6. NEXT’s solution NEXT.exchange as whole ecosystem Based in the Netherlands as an official B.V. and registered as an Ltd. in England and Wales, NEXT is a so-called hybrid digital asset exchange, as they are pioneering to create a DEX like exchange platform, which still remains regulatory compliant and provides their users with an optimal trading experience. But how are they accomplishing this? The team behind NEXT has not just been busy developing a trading platform since the conclusion of their ICO, but building an entire ecosystem as well. This ecosystem primarily consists of the NEXT.chain, NEXT Wallet, NEXT.explorer, Masternodes, and the exchange platform itself, NEXT:exchange. At the moment, NEXT.exchange provides each of its users with individual Blockchain wallets for each type of asset. In the future, and with the help of their Blockchain, the team plans on allowing users to export their private keys. Until then, each transaction carried out on the platform will be provided with a Blockchain transaction ID. x Source: Blockfyre Research | NEXT website
7. NEXT’s solution The underlying technology While NEXT is currently built on Ethereum, they recently mined the genesis block of the NEXT.chain, which currently is in testing phase and is expected to fully launch into Mainnet this month. NEXT.chain will be the future backbone for the exchange and the whole ecosystem, it provides quite an array of interesting functionality. The underlying core technology relies on the Bitcoin Blockchain. However, it combines PoW with PoS, eventually enabling users not just to mine NEXT, but also to stake it in Masternodes. Furthermore, in order to enable the ecosystem with high capacity and efficiency, NEXT.chain includes Instant Transaction Confirmation (ITC), which is an advancement of DAG technology. As DAG is known from projects like Fantom or IOTA, ITC is a further development that adds an extra layer on the top of the blockchain consensus mechanism, resulting in high throughput up to 100k+ TPS, while enabling instant transactions since it abstains from confirmation times. Technology Bitcoin blockchain as a core x PoS x ITC (Instant Transaction Confirmation) x Source: Blockfyre Research | NEXT website
8. NEXT’s solution Mining & Masternodes: Hybrid consensus mechanism While relying on the same hashing algorithm as Bitcoin (SHA256) for mining purposes, NEXT inherits a hybrid consensus mechanism allowing for the usage of Masternodes. Aiming for healthy growth, security and mass appeal for their users, NEXT is incentivizing them to run a Masternode not just with paying them their native token, but also with providing them with voting rights and partial governance over the NEXT.chain. Based on the hybrid consensus algorithm, there will be three different types of transactions: • Normal transactions: Basic transactions on NEXT.chain, hitting up to 1,000 TPS • Instant transactions: Processed by Masternodes, allows for instant confirmations of transfers, transactions are executed immediately upon transfer instead of having to wait on full settlement on the Blockchain. The TPS with instant transactions falls between 100–300,000, depending on the quantity of Masternodes on the NEXT network. • Private transactions: achieved by splitting a transfer over different addresses. Staking x Mining Hybrid consensus x Source: Blockfyre Research | NEXT website
9. x NEXT’s solution NEXT.exchange features Similar to ERC-20 assets on the Ethereum Blockchain. Each asset generated will be directly tradable on NEXT.exchange, allowing projects to attain increased exposure and liquidity. The ultimate plan for this feature is to deploy IEOs and STOs. Digital asset creation SEPA, iDeal and Klarna, as well as PayPal (withdrawals only) allowing for a fast trading commencement FIAT gateways Trading will go live with BTC, ETH and NEXT, as well as USD and EUR pairings. However, in the future pairings against CHF, RUB, GBP, YEN and TRY are planned. Remarkably, ALL digital assets on the exchange will be paired with ALL pairings above. FIAT pairings • Fully regulatory compliance • Regular financial audits by PWC & Deloitte • Accounts that promote wash trading and fake volume will be restricted Full regulatory compliance 100% of the exchange’s trading fees (minus operating costs) will be collected and redistributed to NEXT holders Trading fee redistribution Source: Blockfyre Research | NEXT website
10. Tokenomics - NEXT Token Information Symbol NEXT Decimals 18 Contract Address 0x4e005a760e00e17c4912a8070eec047cfecbabbb Type ERC20 Network Ethereum Utility • 100% redistribution of the trading fees proportionally to NEXT holders • Access to FIAT trading and FIAT gateways • Reduced trading fees (without NEXT: 0.50%, with NEXT: 0.25%) • Priority access of newly listed assets for NEXT holders • Masternode staking (25k deposit) Circulation Planned token distribution 3.9M 5M 6M 15.4M Mining / Masternode fund Development fund Marketing fund Circulation 47% 17% 36% Circulating Supply - Masternodes Currently locked in Masternodes Max possible amount locked into Masternodes Once the NEXT.chain Mainnet is fully deployed and live, the tokens will be swapped into NEXT coins at a rate of 1:1 x Source: Blockfyre Research | NEXT website
11. Tokenomics - Wallet Analysis NEXT ownership Circulating supply • 44.2M NEXT are distributed over 3260 addresses • As the token-to-coin swap is about to occur in the next weeks, the ultimate total supply is planned to be 30.3M • NEXT team holds over 92.3%, of which 14M will be burnt, the rest will get into circulation over a time period of 15 years • The circulating supply is around ~3.9 Million NEXT • The ownership of NEXT is well distributed for a lowcap token as only 58.9% are held by the top addresses Source: Blockfyre Research | Etherscan x Unsold Presale tokens (to be burnt) Marketing Development TOP 100 without IDEX Remaining 3160 addresses
12. NEXT - Price analysis x • There was barely any trading of NEXT until end of March 19 • NEXT has virtually zero correlation with ETH so far • The rise in trading volume made the daily volatility (measured over the last month) drastically decline from highs at 37% down to 10-15% Comments Source: Blockfyre Research | Coingecko USD price ETH price NEXT volatility ETH volatility
13. Growth potential & Roadmap Feb - Apr 19 May - June 19 July 19- 2020 • Testnet deployment to the community in February. • Thorough testing and optimization of the NEXT.chain • 23rd of April: Genesis block was mined • NEXT.wallet and NEXT.explorer ready • Migration to Mainnet • Token-to-coin swap • Masternode deployment • Token listings • Marketing • Smart contracts • FIAT gateways • Bridge for transferring current ERC20 projects onto the NEXT.chain • Atomic swaps. • IEOs and STOs • Tokenization of real-world assets, precious metals, works of art, FIAT and properties. mid-end June • WP 2.0 • updated Roadmap Description The growth potential for NEXT is definitely significant. If done right, new users can be attracted to the trading platform by offering a unique USP compared to other exchanges. Taking a look at the exponential growth Bitmax was showing rather quickly, it is quite safe to say that it was due to convenient user experience, listings that were unique to their exchange, as well as margin trading for BNB that not even Binance itself was offering. Given the high demand and hype digital asset exchanges bring along, it’s up to NEXT how far they are going to use this potential. Taking a look at their product and vision, we are quite confident to say that we believe the team is ambitious enough to exploit their growth potential to the fullest. x Source: Blockfyre Research | NEXT website
14. Team Description Chris Haveman Christiaan van Steenbergen Gleb Jout • NEXT’s website lists 12 (not all employees are presented on the site) team members • The team’s expertise consists of developers, lawyers, marketing specialists, designers, and community managers. • The mixture of experience the team is providing makes us confident that they are covering all necessary areas to realize their vision. • Board advisor & Business Strategy Operations • Graduated over 40 years ago, holding a degree in mathematical science from Leiden University as well as an MBA of Insead Business School. • Starting working already during his studies, he collected over 40 years of business experience in roles like CEO, CIO, BD, marketing and sales, building up an international network. • Founder, CEO & Lead developer • Graduated at the Technical University Eindhoven, holding a degree in Computer Science and Innovation Management. • Ten years of experience in software development, ten years in IT and Telecom Engineering and six years in the fintech and legal sector • Christiaan shows some severe business experience in various areas. • COO & CMO • Graduated Florida Atlantic University as Cum Laude with a degree in Accounting • Accrued over 5 years of management and BD experience throughout his time with VIDELIO HMS, FFD Miami, and PopMechanic. x Source: Blockfyre Research | NEXT website; LinkedIn
15. Conclusion General opinion on NEXT NEXT is definitely taking an interesting approach to improving the current cryptocurrency exchange landscape. The coming and going of trading platforms for digital assets per se already indicates the significant demand the cryptocurrency-space still displays for an appropriate solution. While user-friendly exchanges bring great centralization and monopolies with them, DEXs are still exhaustive to use and are still rather low-key. High upside potential While it may be exaggerated to compare NEXT with Binance’s BNB, it is still the only other exchange that currently has its own live blockchain developed. But also comparing it with the rest of the trading platforms that could be taken seriously within this space, there is still significant upside potential for NEXT. Short- & Long-term investment NEXT is taking an astoundingly ambitious approach of not just solving most of the issues current exchanges entail, it also aims to provide their users with a vast proposition and great incentives. Even more attractive it becomes with taking a look at the small market capitalization of around 1.7M USD, especially compared to its competitors. Risk & Concerns However, it remains to be seen if the team will be able to deliver the highly ambitious goals they have set themselves. While we are confident in the ability of the team to realize their vision, the success of digital asset trading platforms eventually relies on the adoption of enough users. x
16. Blockfyre Jonathan Habicht Simon Dedic Alexander Schätz Disclaimer We currently hold NEXT. We have been in contact with the team If you like this review, dont forget to share it! Follow Blockfyre jonathan@blockfyre.com simon@blockfyre.com alexander@blockfyre.com x