In the Beginning…
SAFEX (or SEC [Safe Exchange Coin], as it was originally known) was originally launched on the Bitcoin blockchain (OMNI), and it is still there, as of this writing. For convenience, I’m using the term SAFEX throughout this post.
Unlike current ICOs, where developers retain a significant percentage of Tokens for themselves, the project creator, Dan Dabek, committed to retaining only 1% for developers, with the remaining 99% to be distributed via a crowdsale.
Upon completion of the crowdsale, the official numbers were as follows: of the 2,147,483,647 coins minted, 2,126,008,805 (98.999%) were sold, which raised the equivalent of $50,579.06 in a combination of Bitcoin and Maidsafe coins (where the Maidsafe protocol was originally intended to be the supporting platform upon which the marketplace would be built).
$1.00 would have bought you ~42,461 SAFEX. As a reference point, Bitcoin was in the $400-450 price range during the crowdsale.
The original project had the intent of creating a small application marketplace utilising the Maidsafe blockchain, and was based on “an amorphous contract system that will allow us all to trade freely, and easily to the point that it will be fun to transact knowing what the deal is strictly even before engaging it” (https://safe.exchange/t/officially-safe-exchange-crowdsale/38).
A Change of Direction…
Ongoing development of the Maidsafe protocol didn’t align with the requirements of Dan’s vision for his decentralised, anonymous marketplace, and the project subsequently lagged.
The sharp rise in Bitcoin prices during late-2016 and 2017 gave the SAFEX project new life, as funds suddenly became available to commence in-house development of SAFEX as a standalone project. Side note: An issue of the rise in Bitcoin prices was the associated cost to transfer SAFEX between Wallets.
The new project goals were outlined by Dan in a series of development updates over the course of 2017. These announcements included reference to the payment of dividends to token holders. Although the tokens also have utility functions, which includes voting rights, a major exchange made the decision to delist SAFEX, most likely due to the potential for SAFEX to be seen as a security token. Another exchange followed suit a short time later. That was in December 2017.
It should be noted that Dan has legal opinion which supports the notion the Safex Tokens are indeed Utility Tokens.
Exchange Info…
From December until earlier this month, the only exchange actively trading SAFEX was Trade Satoshi.
The NEXT.Exchange launch (in beta) earlier this month included SAFEX in their listings, and even has direct pairings for both USD and EUR.
Plaak Network/Exchange (currently in their last week of ICO) has also announced plans to integrate SAFEX into their platform. They, too, have indicated their intention to have fiat pairings.
Current Project Status…
The SAFEX project is currently situated as follows:
- Blue Paper (https://safex.io/SafexBluePaperJan3.pdf) was released earlier this year
- Safex Blockchain (originally termed Chille) to be launched in Q2 2018. (It should be noted that Dan originally announced that the blockchain would launch Q2 2017, and a series of delay announcements have followed. I don’t have a problem with the delays, as I’d much prefer a good product delayed, than a bad product launched to a rigid schedule, but I mention it simply to offer an unbiased record of what has unfolded).
- Dan has recently released a video of himself mining Safex Cash in beta testing.
- SAFEX to move from the Bitcoin Blockchain to the Safex Blockchain in a 1:1 burn/redemption in Q2 2018
- 0.5% Airdrop of Safex Cash to SAFEX Token Holders after transition to the new blockchain (to seed the marketplace)
- 0.5% Safex Cash allocation to the devs.
- Safex Cash to be mined via PoW - Cryptonight Algorithm
- Safex Cash to be divisible to 4 decimal places
- The Safex Cash emission curve, designed by Ivana Todorovic, is a revolutionary S-shape, based on the Diffusion of Innovations Model and is intended to follow the rate of marketplace adoption.
Half of the Safex Cash will be mined in first 7 years, while the other half will be emitted in the following 13 years (20 years total = 1,000,000,000 Safex Cash). - Launch of the Safex Marketplace in Q2 2018
- Dan and the team have taken up residence in new office space in Belgrade, Serbia
- Rapid expansion of dev team is underway for Balkaneum, the company launched by Dan to bring the SAFEX project to completion. All management positions have been filled and team positions are actively being filled for all aspects of the project.
Highlights to Note…
Transition to Safex Blockchain & Safex Cash Airdrop
Unlike many token burn/redemption & airdrop processes, where it occurs on a certain block, or by a certain date, there will be no deadline for SAFEX token holder participation. Once the transition to the new blockchain is finally underway, token holders will, at any time thereafter, be able to swap their tokens from the Bitcoin blockchain to the Safex blockchain.
The Safex Cash airdrop will coincide with the Token Swap. As indicated above, 0.5% of the Safex Cash will be airdropped to token holders. This equates to 0.0023 Safex Cash per SAFEX Token. (eg. Swap 100,000 SAFEX Tokens to the new blockchain and you also receive 230 Safex Cash).
The complete redemption of all SAFEX Tokens onto the new blockchain will result in ~10,737,418 Safex Cash distributed to token holders and an equivalent amount distributed within the dev team.
This 21.4 million Safex Cash will be the starting point for Safex marketplace liquidity.
The Marketplace
Marketplaces, in any market sector, evolve with adoption. Amazon evolved, eBay evolved, Alibaba evolved. It is the natural progression from a startup endeavour to a strong and vibrant economic powerhouse. The devs have given this due consideration when putting together the various supporting elements that will underpin the Safex Marketplace.
Several highlights of the blue paper relate to the underlying principles of the marketplace, and are well worth reading in full. In essence, the marketplace will function as both a public and a private marketplace. Any encrypted marketplace transactions are completely anonymous and untraceable.
While I’m not a supporter of dark-web activities, there is no doubt that the anonymity provided by the Safex Marketplace will be attractive to that market segment.
Developers and preexisting online merchants looking for a crypto-based marketplace backend for their website or mobile apps should be able to easily integrate it into the system. This could include, but is not limited to, good and services of all kinds.
If the 5% commission fee is lower than the competing marketplace providers, the Safex Marketplace will be an attractive alternative, or simply an addition to, a merchant’s customer base.
Safex Cash Emission Curve
It cannot be understated just how important the chosen emission curve is to the overall success of the marketplace. The Diffusion of Innovations Model used by the team is designed to stabilise (ie reduce volatility) the Safex Cash price during the initial seven years of marketplace growth. The Safex Cash emission curve has been designed to match the forecast marketplace adoption.
A thorough explanation of the Diffusion of Innovations Model and why it was chosen for the Safex Cash emission curve can be found at https://safexnews.net/diffusion-of-innovation-and-safex/.
Financial Considerations…
As indicated above, the 5% marketplace commission fee will be distributed to SAFEX token holders as a dividend. However, only SAFEX Token Holders who Lock-In their tokens will be eligible to receive their share of the fees. The fewer tokens that are locked in, the greater the return per token.
As an example, if you owned 100,000 tokens and the marketplace did the equivalent of US$1 billion in turnover for a set period of time, the dividends received, on a per token basis, would change, depending upon how many tokens were locked in.
If every single token was locked in (ie. no tokens being traded on exchanges or simply sitting idle in wallets), then the dividends for the above example would equate to US$2,328.
- If 10% were not locked in: US$2,587
- If 20% were not locked in: US$2,910
- If 30% were not locked in: US$3,326
- If 40% were not locked in: US$3,881
- If 50% were not locked in: US$4,657
That is the approximated returns per 100,000 SAFEX Tokens per US$1 Billion turnover for any given period of time, whether it be per year, per quarter, per month, etc. The timeframe makes no difference to the numbers, other than to see that an increase in marketplace turnover will provide those returns on an increasing frequency.
On 16 Feb 2018, Medium.com username - Kiyoshi Hirohito published an article, entitled “In-depth Overview of the Valuation of Cryptocurrencies: Case Study — The Safex Token” (https://medium.com/@KiyoshiHirohito/in-depth-overview-of-the-valuation-of-cryptocurrencies-case-study-the-safex-token-24429281bc0b).
Hirohito exams the placing of a true fiscal value on cryptocurrencies and of the concept of dividend-paying tokens. He then goes on to analyse SAFEX (once it reaches project implementation) from the perspective of a regular revenue-generating economic e-business.
If you’re at all interested in passive income generating tokens such as SAFEX, then reading the above Medium article is a must.
So, where do I see SAFEX going in the future? Well, when Dan eventually brings the marketplace and new blockchain to fruition as per the Blue Paper, then I truly believe it will change the landscape of online trading for decades to come.
For merchants currently using other e-commerce platforms with much higher commission fees, the 5% rate on the Safex Marketplace will be an attractive alternative. The ability to remain anonymous and keep your purchase history private will be a refreshing change from the targeted advertising, customised prices, etc that other well-known e-commerce sites currently employ.
Final Thoughts…
I’ve seen several complaints that Dan hasn’t released the White paper or published any code on GitHub. Personally, I’m glad he hasn’t given away too much free information. Given the current climate of hard forking, it would be stupidly easy for a group of well-financed devs to create a competing project. I’m very happy for Dan to keep his cards close to his chest until everything is ready for a full launch, and then he can hit the Go button.
In general, if Dan and the team succeed in bringing this project to fruition, I have no doubt he will be spoken of with reverence in the decades to come. Something like, ‘Oh, you know that Dan Dabek. He’s the Elon Musk of the crypto world.” It is a visionary project that could very well tip the current e-commerce system on its head.
I only got into crypto in December 2017, so much of the information presented here has been gleaned “after the fact” from various sources, most notably the Safe Exchange Forum website and the SAFEX Discord channel. I imagine there are many on this forum who only recently got into crypto, and may not yet have come across the SAFEX project. I prepared this post for those people and anyone who may have heard about it previously, but it dropped of their radar, for whatever reason..
Full Disclosure: I own SAFEX Tokens. However, I am not trying to hype the project in an effort to increase token price with a view to selling. Given the passive income generating economic model of the Safex Marketplace, I don’t have plans to ever sell my SAFEX.
I am not a financial analyst. The above information should not be construed as financial advice and is not intended as financial advice. Always do your own research before investing in anything. The price of SAFEX tokens may be volatile, and purchasing cryptocurrencies can be a high risk activity.
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