Entersoft Security Blog

Interview with WandX

Posted by Angad Gill on Oct 24, 2017 2:48:07 AM

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In our interview for this month, we venture into one of the most trending topics these days  and try to understand a decentralized application built on the Ethereum blockchain - WandX. A brief chat with the CEO, Abhinav Ramesh to discuss cryptocurrency based assets, FinTech in India, ICO hacks and P2P trading. 

Can you explain Wandx and its innovation in layman terms?

So currently, you have lot of cryptocurrencies like Ethereum, Bitcoin and over a thousand others in existence. These are referred to as tokens. Many of these tokens are built on top of the Ethereum block chain, which in turn is built on top of Ethereum.

Now, just like in the real world you have stocks, and you can trade these stocks, in NSE or BSE; many token exchanges have come up, where you can trade in tokens. But, exchanges are centralized, which means that if you want to trade with someone else, the exchange will take the token from you, and from the other party, post which it swaps the two.

The entire concept of a blockchain is to keep it decentralized. Bitcoin, for example, is decentralized money, which means that the money is not distributed by a central party, it’s earned by a miner. So, an exchange acting as a centralized party, to distribute decentralized tokens, is essentially a decentralized exchange, enabling peer-to-peer trade. So imagine NSE or BSE acting like a P2P platform where you can find other people to trade with.

What we have built here, is one step on top of a decentralized exchange. NSE and BSE enable just stock trading. Whereas, a commodities and futures commission enables trade of derivatives, which is futures and options on these stocks or commodities or equity. Derivatives trade in the digital world is about at least 10 times that of equity trading - specifically, currencies built on top of Etheruem.

You create the derivative on the underlying asset. Similarly, we are enabling the creation of such derivatives on top of cryptocurrency assets, built on top of the Ethereum block chain.

Can you give us some examples of these derivatives? To make things more clear.

Original idea for real world derivatives was to balance hedge risk against price movement. Let’s say you have an apple farmer and an apple pie manufacturer. The apple farmer signs a deal with the apple pie manufacturer, saying that, six months down the line, I will sell 10,000 apples to you at Re. 1 per apple, irrespective of what the market price is. That is a standard forward or futures contract. That is a derivative, simply put. We enable derivatives on top of Ethereum blockchain.

Some examples of Ethereum based assets?

Augur - a platform acting as a prediction market gives you the means to bet on the outcome of an event. I can use the platform to bet on the outcome of a cricket match. It’s completely decentralized, which means that all the payouts are automated.

Another example is a company called Golem, which is a decentralized cloud storage platform. Conventionally, if you want to store your data on cloud, you go to AWS, iCloud etc. With Golem, you can store it on multiple devices all over the world. Instead of trusting one cloud services provider, you trust the entire network, which is more reliable than say, a single entity. If you have 1 GB of data, it is split into 100 MB chunks, which are further distributed across thousands of machines on the encrypted network, all over the world.

How does WandX come in?

Now each of these applications have a token, to be used only for that particular application. Like in Amazon, I can pay using only Amazon credits. Similarly, for Golem and Augur, I can pay using only Golem credits or Augur credits. We are enabling a P2P exchange of these credits, in addition to creating financial products on top of these credits, like derivatives.

Are there any contemporaries/other companies that you know of, who are doing anything similar?

The initial application which we have released right now, as a test, enables users to create a basket of tokens, and trade that entire basket with a single transaction.

There’s no one else doing what we are doing as of today. Ours will be among the first ICOs from India. Anyone using our platform has to use the Wand token, which acts as a loyalty point that will facilitate trade with other tokens. It will be one of the first token offers from India.

How difficult is it to educate people about this?

The best way to make one understand is to make the concept analogous to something in real world. In the real world you have stocks, parallel to which, here you have digital assets. We are enabling a derivatives platform for digital assets, similar to futures and options derivatives in real world.

How big is your team?

There are six people in the core team; advisory team has about seven people. We are setup in Singapore, the US and in Hong Kong.

I have been in the blockchain space for a year, cryptocurrency space for about 8 months. Many of the advisors are from banking and financial services in India. Our marketing partners have assisted numerous other companies with token offerings, outside of India.

How do you see crypto assets changing the way things are done in India? How are they affecting the way traditional assets are?

As soon as Bitcoin, Ethereum and other cryptocurrencies are regulated, I think the industry will explode.

Every enterprise or startup has two major difficulties - one is to raise funds, the other is to amass users. The entire point of creating another crypto asset, is to see if one can raise funds from potential users. Keeping that in mind, I see a lot of people starting to develop decentralized applications.

For example, you can create a decentralized Twitter network, in which, for every tweet/retweet you get a token, which can be monetized somewhere. In such applications, there’s tremendous potential.

What do you feel about the FinTech space in India, in general?

It’s huge now. There are so many big players in lending, specifically P2P lending. With cryptocurrency being regulated, there will be quite a few applications which will be lending through cryptocurrency, which will bypass the banks.

There are already 4-5 large bitcoin exchanges in India, who are creating their own wallets. So it’s easy to foresee payments through cryptocurrency becoming huge.

What are your thoughts about recent ICO hacks and how are you protecting yourself?

The hacks which were in the news happened on two fronts - on the website side and on the contracts side. I am confident about safety on the contracts side as we have followed specifically high standards. Our website too is extremely secure, owing to numerous security protocols.

Website hacks as observed, tend to be the simplest. So during an ICO, the organization gives you an Ethereum address, through which contributors can send their Ether in exchange for tokens.

Now, in one of the hacks, the hackers hacked into the website and changed the Ethereum address to a completely different one. Hence, people got duped into sending money to the wrong address. We are wary of such attacks and won’t be exposed to them because we are following all the necessary protocols for the website as well as the contracts. Our developers are extensively auditing our code, in addition to third-party audits.

Further reading: The ultimate, 3500-word, plain English guide to blockchain

Topics: FinTech Security, bitcoin, cryptocurrency, cryptoassets, P2P, ethereum, blockchain