Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.
The Ndau (XND) is a stateless Buoyant digital currency with a built-in design to act as a store of value, is less known as it is not conducive to pump and dump. It was launched 2 yrs ago out of the Cayman Islands.
It is more actively traded on BitMart exchange with a presence in New York, China, Hong Kong, and Seoul. According to Cointelligence, BitMart is included in the top 20 exchanges by volume.
Programmable money, like Bitcoin, are available in the market even though the verdict is still out there as to which of the existing cryptocurrencies (if any) qualifies for a digital means of payment, or a digital store of value, or a digital unit of account. Bitcoin is clearly a living proof of an autonomous organization, with no CEO, no CFO, and no board. It went live with a fixed supply and a fixed predetermined monetary policy. The developer and user community has had several disagreements about the direction that the network should take which has resulted in forking the Bitcoin source code.
The fact remains (with its pros and cons) that the fixed supply of 21million Bitcoins cannot be tampered with. The programmed monetary policy allows for new bitcoins to be created only through mining at a fixed rate. This rate is fixed but it decreases as new bitcoins come into circulation and we approach the 21 million supply ceiling. There are proponents and critics to this kind of rigid monetary policy as it has not been tested in economic downturns, in which a flexible monetary policy can have benefits. It definitely sits on the other end of the spectrum from the Quantitative Easing (QE) that Central banks in the Western world have been engaging in after the 2008 Global financial crisis and the 2020 COVID19 induced economic crisis. Devaluation of currencies is a big thorn that is yet another reason that we have been soul searching technological solutions for better stores of value. Data from the Official Data organization and several other sources shows that the purchasing power of the almighty US dollar has been dropping precipitously.
Soul searching for programmable money that is enabled by blockchain technology that can mitigate this frightful drop in purchasing power of even the No.1 reserve currency, is only natural. Can we create a rather autonomous store of value with a tamper-proof and effective monetary policy? The market has not yet decided whether Bitcoin which is stateless and not backed by any real asset, is our Digital Gold alternative. During the recent downturn, Bitcoin and Physical Gold, similar to several traditional financial assets, have not behaved as expected.
One example of a better potential Digital Gold alternative, is the blockchain-enabled solution of a stateless Buoyant digital currency, the Ndau. The Ndau (XND) was launched in September of 2018. Its design is to act as a long term store of value and therefore rewards token holders the longer they hold it. Ndau token holders earn Economic Alignment Incentives (EAI) ranging from 4% to 15% based on the number of months of their holdings.
The total supply of Ndau tokens is fixed to 30million and there is a programmed market intervention to maintain price stability every time the price moves more than 5%. The supply of Ndau is increased only when demand increases based on a predetermined price curve.
Ndau is the intellectual child of the Ndau Collective. An anonymous group of early Bitcoin enthusiasts more than 20 leading experts from world-class institutions including MIT, Columbia University, Carnegie Mellon, New York University, University of Chicago, and Goldman Sachs and who specialize in disciplines ranging from economics and monetary policy to cryptography and computer science.
Dictionary definition = able to keep afloat or rise to the top of a liquid or gas.
In virtual currency terms, it means a currency whose value rises and whose downside volatility is mitigated.
Ndau – The name comes from en-dow (endowment).
The proceeds from the sale of Ndau tokens are kept in an endowment and invested in other asset classes. The purpose of the endowment is to serve as a source of liquidity to support ndau’s price. The investment decisions are taken by the Blockchain Policy Council (BPC), a group of nine digital delegates continuously elected by ndau holders. The tokens are native the Ndau blockchain which uses a proof of stake consensus mechanism.
The corporate entities behind Ndau are Oneiro, which is backed by COSIMO Ventures. Oneiro received a seed round of $3mil initially and in October 2019, another $5million. At launch, Oneiro sold $15million worth of Ndau Tokens (which means a bit less than 1million tokens). The recent economic downturn seems to have found Ndau at a fragile point on its journey of adoption and therefore was not able to live up to its design.
At issuance, Oneiro placed Ndau tokens at a price of $17.26 during a private sale. The price remained stable for a long time (about one year) and then started rising. By early 2020, it had actually risen close to $22 (27% increase). By mid-February 2020, it seems that the price stabilizing mechanism of the endowment couldn’t cope with the tsunami of liquidation that hit all assets indiscriminately.
This indicates that the endowment was too small to cope with the severe changes in demand. According to their website the total tokens in circulation had grown to 4.3million and the price had dropped to $6.97.
Stay tuned and monitor the development of Ndau. We need at least a one-year history in such market conditions to be able to make any meaningful conclusions.
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[…] Tuesday Efi Pylarinou @efipm our Swiss-based Fintech Adviser, founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019 wrote A Buoyant Digital coin at a tender age – Ndau […]
[…] May ndau be characterised because the “subsequent era Bitcoin”? Many crypto leaders and fanatics imagine it may very well be resulting from its distinctive tamper-proof and efficient adaptive financial coverage rules. It has the liberty to rise with rising demand whereas mitigating draw back volatility. See reference: Every day Fintech in March of 2020. https://dailyfintech.com/2020/03/31/a-buoyant-digital-coin-at-a-tender-age-ndau/ […]
[…] Might ndau be characterised because the “subsequent era Bitcoin”? Many crypto leaders and fanatics consider it could possibly be attributable to its distinctive tamper-proof and efficient adaptive financial coverage ideas. It has the liberty to rise with growing demand whereas mitigating draw back volatility. See reference: Day by day Fintech in March of 2020. https://dailyfintech.com/2020/03/31/a-buoyant-digital-coin-at-a-tender-age-ndau/ […]
This was such an informative piece. Thank you so much! I’m currently signed up with a Wealth Management company called Kuvera/igenius and they are marketing heavily for this token. I’ve done extensive research in it since then and the concepts sound incredible for long term holding/investing. However, I have a few questions and concerns.
Many times, projects can have fantastic concepts but when put into a stress test, the true colors show and it seems like thats exactly what happened during the March crash of 2020 when everyone liquidated and the price dropped.
How did the price stabilization not work? And what have they done to solve that problem for future?
Thanks again for this piece, and would love to know if you’ve found any more updates on this.