Question 1: Nurtan, when did you joined the blockchain industry. What did you do before DMEX?
I have studied the blockchain industry for many years, I am an enthusiastic fan of cryptocurrency, I believe it has a very promising future. I was especially attracted to its core value, ‘decentralization’.
With the blockchain’s integration with traditional finance and decentralized finance, from liquidity mining to staked loan, DeFi market is soaring, my entrepreneurial passion is also kindled.
After I graduated from the University of Michigan, after 23 years of experience in financial transformation and integration, I am good at identifying key information and capture data growth so as to promote strategic reformation in corporations. As the financial transformation specialist of Accenture, I brought over 7% improvement to capital expenditure and cash management. I also achieved a 45% reduction in financial costs. I have rich experience in capital management.
Personally I put a lot of emphasis on capital flow or cash flow. Whether you are a company or an individual, you must have free capital flow in order to achieve maximum profit.
Question 2: Why did you founded the DMEX project. What problems are you trying to solve with DMEX?
Let’s talk about the original design of DMEX. What is DMEX trying to solve? The answer is the challenge of asset liquidity. DMEX’s slogan is ‘mobilize your assets’. The entire DMEX project was designed, constructed, and executed with this core ideology.
Let’s first examine the 1.0 version of the mining power NFT. Mining power and mining machines are both fixed assets. Upon purchasing mining power, buyers have minimum asset liquidity. DMEX was trying to solve this problem by providing liquidity to mining power. Therefore, DMEX products were designed with three options. When users purchase mining power on the DMEX platform, the mining power will be mapped to NFT. Users can sit and wait for a daily mining income, or sell the NFT to obtain working capital, or pledge the mining power NFT as collateral to get a loan for reinvestment. These flexible options create more earning potentials for users’ assets. The value of finance lies in circulation. This is DMEX’s primary product design concept.
We can then direct our attention toward the 2.0 version of joint mining. This product is designed to maximize the advantage of liquidity. With the joint mining mechanism, the entry barrier of mining is reduced to almost zero. Anyone can participate in mining with an initial investment as small as 1 FIL or 1 HUSD to share the joint mining incomes. Let’s take an example so that we will have a better understanding of the principles of the joint mining product. Suppose there are ten people who each contribute $1,000 towards the purchase of a mining machine. The total investment from everyone is $10,000. The mining machine is generating a daily coin output of $100/day. The average daily income of each person is $10. However, at this time no one can withdraw any money because all the capital, i.e. $10,000 has been spent on the mining machine. A short while later, another ten people came over with an offer. The new group offers to provide $10,000 worth of liquidity. That is to say, with the new injection of $10,000, everyone’s money will be free to flow in and out of the mining pool as they please. So what’s the catch of liquidity? The newcomers are going to share half of the mining incomes. If the initial investors believe the deal is fair, they can accept the liquidity injection. Although the mining income is reduced by half, their asset liquidity is greatly improved. They will be able to deposit or withdraw their assets at any time they wish. What if another group of people comes in with more money? In that case, the mining pool will have more than enough liquidity and the mining income will be further reduced. In short, joint mining is characterized by high returns when liquidity is poor and low returns when liquidity is good. Now here comes another problem here, what if there is a bank-run situation? What if the investors cannot assess their funds? How does DMEX solve this problem? The answer is actually very simple. The original daily mining income is $100. With the $10000 liquidity injection, users are only receiving 50% of the mining incomes. The other 50% of the mining incomes will be redirected to compensate for the $10,000 initial cost to purchase the mining machine. After approximately 200 days, the initial cost of the mining machine will be fully paid for. By that time, everyone will be free to withdraw their investment principals. This is the basic principle and the economic model of joint mining.
Question 3: Why did you approached Will for this project? What is Will’s most significant contribution to the DMEX project?
I am determined to venture further into decentralized finance, hoping to change the statues quo of the mining market.
I want to introduce traditional finance’s tokenized asset to DeFi, build a decentralized mining power financial service platform. The platform’s underlying asset will be Bitcoin, ETH and Filecoin mining machine.
I called my Chinese friend Will at once, I shared my idea with him. Will suggested a valuable insight. Although Bitcoin mining machine is a reliable asset, it has a long pay back period. It would be better for us to start with Filecoin. We reached to a consensus.
Without further ado, I reached my classmate from the University of Michigan, Rufus. He was a senior engineer in Microsoft and Amazon. Rufus has founded and headed multiple large-scale project teams. He has considerable expertise in blockchain, cloud network development toolchain. Our technical team took two months to construct a complete technical framework. Our diligent effort has blossomed into DMEX.
I believe that if DMEX is to kick off with Filecoin, China will be the biggest market. Will has deep roots in the Chinese blockchain industry. He successfully designed multiple blockchain products. He has unique understanding and rich practical experience in DeFi. He is also well connected with the Chinese market.
Will gave me another two advices. Firstly, we could further convert the tokenized mining power to NFT. This way transaction will become even more convenient, as is trendy nowadays. Secondly, we can employ the DAO mechanism to achieve communal governance. I think Will’s ideas are fantastic. For us, tokenizing Filecoin mining power asset is like right people doing the right thing at the right time. We pooled our international resources together. With the addition of creative financial products such as collateral and loans, this project’s potential is limitless. I also believe that Will is a fantastic business partner, he is the best candidate for our Chief Product Officer.
I was pleasantly surprised when Will found our first investor within days. With support from several top mining pools, we are fully confident in DMEX.
Before long, the Chinese community went online.
Q4: Please share with us your view on the industry’s potential development in 2021. Do you think the DeFi sector will has another breakthrough this year?
Judging from the changes in the crypto market over the past few years, the industry has entered a rapid iterative and incremental development period. From the development progress of the underlying infrastructure, to the emergence of more quality new cryoto assets, to the rationalization of the global consensus, today the industry has far greater underlying value than in the past. The pandemic in 2020 provides an excellent opportunity for new technology to transform the traditional industry. I believe that by combing other new technologies such as artificial intelligence, big data, cloud mining, and the Internet of Things, blockchain will promptly mature and thrive.
2021 users will have deeper understandings about blockchain. Its core value will be recognized by more people.
Blochchain will have better integration with Internet of Things and artificial intelligence. Together they will further promote the rapid development of digitalization.
The development prospect of the interconnected “Internet of Value” will only become better and greater.
New blockchain infrastructures is gradually demonstrating its scale and importance. Digital engineering and infrastructure construction are highlighted.
Blockchain transactions will be further developed. The market will become more fair and transparent.
In general, 2021 will be a better year for blockchain development. As people start to understand blockchain, the demand for blockchain technology in various fields will continues to grow.
My view on DeFi can be summarized as below.
The rapid growth of DeFi in 2020 has had a profound impact on the entire cryptocurrency industry. For example, the popular exchange Uniswap is completely decentralized, all transactions are occurring on the chain, this effectively prevents the risk of data crashing often seen in centralized exchange. On the other hand, the collateral loan product mobilizes investors’ idle cryptocurrency assets, this promotes the circulation of cryptocurrency assets, optimizes the investor’s investment portfolio and increases investment returns.
In 2021, DeFi will make even better progress based on the achievements in 2020. The original DeFi agenda will receive an exciting upgrade while brand new directions will be explored and utilized. To be more specific, in terms of DEX development, users can expect better user experience, more product functions and clearer data display. In addition, there will be more upgrade and optimization in transaction speed and gas cost.
Obviously, DeFi is still in the early stages of development, we still need to improve the usability of the product. Improving user experience is not an easy task and DeFi is not yet ready to cater for the general population. However, with the good prospects of 2021, DeFi will surely enter into more new fields to attract more traffic. The great potential of this market can be deducted from the current DeFi boom and the continuous growth of DeFi capitals. This is a golden opportunity for DMEX to thrive in the DeFi field. This is the cornerstone that powers the strong advancement of DMEX.