Hello everyone.
I recently have been looking at TenX and I found this company very interesting. I have decided to summarize and share what I have learnt so far about TenX today.
WHAT IS TENX
TenX is a Singapore based payment company which an aim to facilitate the use of cryptocurrency in our daily lives. As indicated in their whitepaper, their vision is "to have assets on the blockchain that can be used by any individual user in the “real world”.
TENX WALLET AND TENX CARD
To achieve its goal, TenX offers end-users a TenX card (a debit card) with an accompanying mobile application - TenX wallet, which supports cryptocurrency such as Bitcoin, Ether (incl. ERC 20 Token) and Dash.
TenX currently has card issuing partnership with Mastercard and Visa. To spend your cryptocurrency you simply need to select the cryptocurrency in your TenX wallet and present your TenX card (issued by Mastercard/Visa) to the merchants. That means you can spend your cryptocurrency without the need to convert them to fiat money.
To quickly understand how TenX card and wallet works in real-life, I suggest you take a look at this short video below published by TenX on youtube:
REWARD SCHEME
One of the key product feature of TenX is that users can earn a 0.1% reward (in the form of PAY tokens) for every purchase they made using the TenX card. You can view it as similar to those loyalty programmes provided by credit card companies.
On top of that, as a holder of the PAY tokens, TenX would provide to the PAY token holders an incentive of 0.5% (in the form of Ether) based on the entire payment volume on the TenX payment platform.
TenX illustrated the above using a diagram in its whitepaper for easier understanding:
COMIT NETWORK
As you can see above, TenX use the COMIT Payment Channels to allow the user to settle incoming payment requests from the credit card networks in real-time. The COMIT Network (Cryptographically secure Off-chain Multi asset Instant Transaction network) is a complicated technology. You can regard it as an internet of blockchains that allow for instant asset transactions.
You can find out more about COMIT in their official website and whitepaper: COMIT website
HOW TENX MAKE MONEY
For any business, it is important to understand how they make money. For TenX, they make money by splitting the fee with credit card issuers and banks for every spending conducted by their users. In particular, a small fee would be charged by TenX, the credit card issuers, the acquiring and issuing banks for each transaction, which is illustrated below:
Source: TenX, Gatecoin
Simply put, based on the illustrative example above, for each USD100 spending, TenX would generate a revenue of USD2 and a profit of USD1.4, which is calculated after deducting 0.1% PAY Token and 0.5% Ether rewards (i.e. USD2 - USD100*0.6% = USD1.4).
The co-founder and CVO of TenX has also published a short video on youtube to explain the above business model.
TENX INVESTORS
TenX has completed an angel round and seed round on Feb 2016 and Mar 2017 respectively and raised over USD 1m. As indicated in their whitepaper, investors include Vitalik Buterin (Founder of Ethereum Foundation), Bo Shen ( Managing Partner at Fenbushi Capital) and David Lee (FinTech Professor at Singapore Management University).
After the ICO in June 2017, TenX has raised additional USD 80m. For more info on investors and amount of funding raised, you can check out: Crunchbase - TenX
TENX COMPETITORS
Major competitors of TenX include Monaco and TokenCard. As indicated in TenX whitepaper, the transaction fee of TenX is lower than its competitors (0%, 1% and 1.5% for TenX, Monaco and TokenCard respectively). As to the reward, for Monaco, their official website states that there is a 0.75% cashback on all purchase using the Monaco cards (which is higher than TenX but note that most of their cards require minimum purchase amount of MCO token), while not much details could be found in TokenCard's official website. If you wish to know more about these two companies, here is the link:
TENX VALUATION
Since early investors of TenX invested around USD 1m and holds around 10% of PAY tokens, the valuation at the time of seed round is around USD 10m. In the ICO, TenX raised around USD 80m by distributing around 51% of PAY tokens to the public, the valuation at the time of ICO is around USD 157m.
The PAY token price has surged after the ICO, and has risen to more than USD 4 in late August. At the time of writing, the price of PAY token is at USD 2.4 and the total market cap is approx. USD 255m. (Source: coinmarketcap)
FUTURE DEVELOPMENT
As to the future development, we can look at TenX's plan to adopt their ICO funding in the following four major areas as stated in their whitepaper.
25% on TenX Product
- offer services on mobile platforms in addition to Android, including iOS and WebApp.
- expand coverage via further issuing partnerships with issuers such as American Express and Unionpay.
- add and support more and more different cryptocurrencies and tokens.
25% on COMIT Development
- ramp up the development of the COMIT network, target to fully integrate it with the TenX Wallet by Q2 2018.
25% on Card Issuing and Banking Licence
- apply for a banking license and gradually integrate fiat currencies into the TenX Wallet.
25% on Comit Liquidity
- provide high liquidity and low spread for the COMIT network.
Also, TenX has a 36 Month Road Map, which lay out some key milestones including market expansion (penetration to Europe and North America in 2018 and South America and Africa in 2019), and a target users base of 10million and transaction volume of USD 20 billion in 2019.
If transaction volume reaches USD 20 billion, based on USD 1.4 profit for each USD 100 spending in the example illustrated above, TenX will make a profit of USD 280m. (Again, remember these figures are only for illustration purpose only, we don't know the actual profit margin ratio of TenX.)
Source: TenX's whitepaper
SUMMARY
IMO, TenX is a very interesting project. The TenX team has demonstrated that they have the ability to develop a working product that is simple, easy to use and understand, which is very important for large scale adoption.
One thing I like about TenX is that they will not create any new PAY tokens after the ICO, which means unlike many other cryptocurrency, the supply of the PAY tokens is fixed. In order for TenX to distribute reward (i.e. PAY tokens) to users, they have to buy them in the market, and this would provide a continuous price support to the PAY token.
Also, TenX has been able to receive great industry support, including the Paypal incubator program in Singapore, DBS Blockchain Hackathon and Citi Mobile Challenge. Besides, it is worth noting that Vitalik Buterin is the advising investor of TenX and recently TenX have also become a member of the Enterprise Ethereum Alliance (EEA).
The cryptocurrency market has a total market cap. of around USD 150b, as the blockchain technology and the cryptocurrency market continues to grow, it is expected that more people would demand to spend their cryptocurrency for different reasons and the future of TenX looks bright.
Having said that, due to the technical complexity involved, it is important to follow any issue result from the development and integration of TenX with the COMIT Network. Also, as TenX currently do not have any banking license, they have limited control and bargaining power over their fees and loyalty programmes, which directly affect its profitability. Finally, as existing competitors grow and new competitors will emerge, more time is needed to observe whether TenX can maintain its advantage and will become the dominate player in the future.
Anyway, it will be interesting to see how the market will develop and change the way we pay our coffee.
What do you think about TenX? Please feel free to share your view.
Thanks for reading!