Self-described as a P2P cryptocurrency for the financial sector, the Foin’s goal is to have its FOIN token and platform serve as links between investors and financial services. Launched in April 2018, the project drew both interest and controversy.
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The Foin cryptocurrency started out as the project which its mother company Financial.org pushed as a response to what its creators describe as increasingly “dystopian” tendencies with the blockchain and crypto community. As stated, Foin stands in opposition to the financial future in which the end users are separated from the global financial industry by means of the blockchain technology. To counter this, Foin proposes its model of blockchain implementation with the following benefits:
- Foin hopes to strengthen the link between global financial institutions and the adopters of its cryptocurrency. This is to be achieved by giving the Foin coin holders the access to diverse financial services and instruments which are made available as part of its ecosystem. This will allow them to become bona fide investors.
- Eventually, Foin will fully implement a smart contract platform dedicated to financial trading, investment management and transaction processing. Its trump card will be the implementation of the programmable artificial intelligence (AI) technology which will help the users profit from the higher return on investment (RoI).
- The system will also offer access to the Claim-Code which is a software-based payment solution focused on privacy and security. Claim-Code is supposed to operate in the manner resembling an automated escrow system.
- As a final piece of the puzzle, the Foin token is expected to reward its holders by increasing its value in parallel with the platform’s deployment. Foin hopes to offer the best of both of world with its hybrid implementation of both Proof of Work (PoW) and Proof of Stake consensus mechanisms.
What Makes Up the Foin Ecosystem?
Foin promises to achieve these goals once its entire ecosystem is fully operational. This ecosystem is envisioned as the sum of several components:
- Foins blockchain platform
- Foin token
- Providers of financial services
- AI-powered modules on the blockchain
Foins (short for Financial.Org blockchaIN System) is a distributed ledger platform used for managing financial transactions and trading. It is built around the community of members of the Financial.org platform which is behind the Foin project. This company operates as a provider of lifelong financial education to the members of its community. Instead of offering services of financial mediation, the company focuses on providing investment strategies, long-term financial planning and promoting education about the application of blockchain in the financial world.
Since Financial.org does not operate as a financial intermediary, it is not bound by any national and international regulations tackling this market. Instead, all transactions and investments relating to the funds and securities are handled on its Foins platform and the users who join it are promised the benefit of unrestricted access to global financial services without government oversight or regulatory restrictions.
Foin Wants to Eliminate the Volatility Factor
While Foins describes itself as the blockchain platform similar to Ethereum, Bitcoin and Ripple, it also wants to set itself apart from the competitors by the way it approaches investments on the blockchain.
Foins wants to do away with what its developers describe as the speculative practices in the cryptocurrency world. Investing in the Foin token is described as a long-term project which fosters working with providers of financial services on the Foins network. The goal is to create the system which glues separate investment funnels into a complex but unified system, removed as far as possible from the model used by payment networks which operate as completely separate entities. Foin presents itself as the answer to the demands of modern-day investors who, arguably, face two major uncertainties regarding the blockchain investment potential:
a) The desire to be shielded from the volatility of competing cryptocurrencies.
b) Being averse to the risk of falling prey to scam initial coin offerings (ICOs) and blockchain proponents that promise overnight riches.
To be able to deliver on its promise of financial long-term stability, the value of the Foin token has been strategically programmed over the course of ten years, spanning the period from April 1, 2018, until March 31, 2028.
In parallel with the growth of the financial instruments and products offered on the Foin platform, its token will become the main currency for working with these products. The volatility is supposed to be reined in by setting aside 50 million FOIN for the use by the community, with the same amount being earmarked for the use with the Foins blockchain, that is for its expansion, maintenance and oversight.
Blockchain AI for Higher RoI
Foin creators believe that blockchain technology can actually offer improved RoI and minimum risks, provided that it is paired with competent AI tech. Since Foin tokens can be utilized by the users who want to become full-blown investors on the Foin network, the Foin team wants to make the investment option as predictable as possible.
This will be done by the implementation of an AI layer in form of individual modules connecting the token owners and the providers of financial services on the Foin blockchain. Once fully implemented, the AI is supposed to manage trading with various financial products such as fiat currencies, cryptocurrencies, assets, S&P 500 stocks and others. In this manner, the AI will assume the role of a personal investment advisor for each token holder.
Foin network aims to offer access to a broad scope of fintech companies and financial service providers by including both the established businesses and startups. The team aims to attract them by empowering its blockchain and focusing on protecting its liquidity.
What Are the Foin’s AI Modules
AI modules on the Foins blockchain have to perform several functions relating to the personalization of financial services and security of the network. Based on their functions, the AI modules can be divided into three main groups:
- Fraud Prevention Module. This module is in charge of protecting the safety of the user’s funds which are made part of the proposed investment plan, throughout its implementation. The AI will perform regular checkups of all deposits and withdrawals taking place on the Foin network. After the investment channel is analyzed, the Foin ecosystem will put safeguards in place to protect the user from the fraudsters and dishonest financial service providers.
- Risk Evaluation Module. This module mainly evaluates risks and manages compliance. AI will collect and analyze various public and private data made available by all on-chain financial service providers and assign appropriate scores based on risk parameters related to a concrete investment channel.
- Portfolio Recommendation Module. This module serves as the meeting point for fraud prevention and risk evaluation modules as the data gathered by these two are collated here. Actually, this is the AI module which performs the analysis of the prospective investor himself by collecting the data from various sources. The parameters which are included in its analysis are diverse, including the data on the investor’s place of residence, age, gender, marital status, educational profile, income grade, household size, projected monthly expenditures, info on the status of savings and debt and others. If available, this module’s AI will also access the user’s social media profile to make the user profiling more detailed.
Once the data are gathered, they are cross-referenced and matched with the information gathered by the risk evaluation module on a particular financial service provider. Based on machine learning technology and AI-based assessment, the Foin system will be able to calculate and offer the most suitable financial portfolio for a prospective investor, no matter if it is a business or an individual user.
How Can Foin Protect Its Liquidity
Foin is envisioned and launched as a hybrid cryptocurrency. The Proof of Work mechanism is applied for the coin distribution in the earliest stage of its coin distribution, followed by switching to the Proof of Stake model in order to offer better security. For the users, the only relevant system here is the Proof of Stake, as it is the core mechanism used to settle transactions on the Foin’s blockchain.
Foin prides itself on the use of the unmodified PoS model, meaning that the stakes of individual users are calculated as their shares in the total coin supply. This consensus algorithm is also seen as an integral mechanism which will increase the token’s value and RoI in the projected amount of 1.168 % per year, with the best case scenarios expected to deliver 11-12% RoI in the long run.
As part of its coin minting procedure, the Foin network is supposed to generate a new block every 90 seconds on average, with a reward of 3 FOIN per created block. The projected inflation rates are 1.16% on annual basis. Keeping tight control over the amount of created coins is expected to protect the stability of the Foin network and individual token holders.
At its initial distribution stage, the total amount of mined Foin tokens was capped at 90 million. The Foin team plans for a 5% - 6% increase in the number of coins the users can actively stake. For example, those who decide to stake 100,000 FOIN in January 2019 are expected to have about 105,000-106,000 in the same month next year.
In addition to being treated as the aggregator of higher RoI, the Foin’s PoS consensus model was also chosen because it uses less electricity, prevents the formation of mining cartels and precludes the use of specialized mining hardware.
As of November 2018, Foin tokens are actively traded on cryptocurrency exchanges such as CryptoBridge and STEX.
What is Claim-Code Payment System
Claim-Code is the Foin’s own software solution for payment. It was named after the code which needs to be delivered to the intended recipients prior to giving them access to the funds which are being sent. As this solution is planned for gradual deployment, it will arguably move away from the current centralized model to a more decentralized one in time. With the Claim-Code system, the Foin hopes to offer its users an additional privacy shield, with the Foin platform acting as the third party which protects the privacy of individual transactions.
A sender can visit the Claim-Code portal and initiate a new transaction. This involves providing data on the amount, address and expiration date for a specific transaction, while the system creates a specific code for it. The associated fees are paid by the sender, provided that he provides the exact amount the recipient is supposed to receive. In case the amount to be sent is unspecified the fees will be deducted from the total amount of coins sent as part of the transaction.
The use of the Claim-Code system is supposed to offer the following benefits:
- No funds will be lost by being sent to invalid addresses
- No funds will be lost by being sent to addresses which the recipient doesn’t have the private key to
- No funds will be lost on the account of man-in-the-middle frauds
- A transaction can be canceled before being claimed by the recipient
- Coins can be sent without knowing the destination address
Foin History & Controversy
Mr. Arnaud Georges started the FOINS Global Concepts & Solutions back in 2016. With his 16 years of experience in the financial world, he is described as being guided by the vision to improve the state of financial literacy across the globe.
Financial.org, the company behind the Foin, made headlines in June 2018, after it was reported that the company closed the investors’ dollar accounts and converted the balances to the Foin cryptocurrency.
In this case, it was reported that the investors were unable to withdraw the Foin currency and activate their accounts unless they make additional investments. Some investors claimed that they received no warning of this conversion whatsoever. The media also reported that financial watchdog organizations in the UK, Indonesia, Laos, the Philippines, Thailand and the UAE have joined Malaysia and Singapore in including the Financial.org on their alert lists ever since.
The company responded to the announcement of legal actions to be taken against it by claiming that the “unhappy” investors simply misunderstood the Foin investment timeframe and related investment risks. In November 2018, the company also announced that the cash withdrawal implementation and the planned Foin wallet migration will be completed by mid-2019.