The crypto-industry is an extremely tough place to survive and prosper on a long-term basis. The case of cryptocurrency exchanges is especially pertinent in this respect. In fact, the average life expectancy of cryptocurrency exchanges is only about 15 months in 2019. This fact was again highlighted by another crypto-related venture calling it quits.
In a recent Twitter thread, fairx, a crypto-venture whose objective was to set up a “licensed national bank,” announced that it was failing. Fairx said,
“Ultimately, our business model was simple: introduce a new, licensed, fully regulated national bank, modeled as a financial market utility, that would work with individuals and banks to create a dematerialized bank deposit, denominated in USD. The bank was Frank Financial.”
The organization’s Twitter handle also said that stablecoins were a flawed concept because the bank deposits attached to the stablecoins were not legally owned by the token holder and instead, were owned by the stablecoin issuer. Fairx further stated that it had developed various systems to facilitate issuances with other protocols such as Ethereum, Stellar and R3’s Corda. However, after receiving constructive and positive feedback from regulators, the idea was put to bed. However, the entire reason for the organization’s collapse was its funding.
After receiving its first funds to initiate its binary stage, the organization quickly realized that it required more capital in order to drive forward. It did not happen however, as many investors backed out and the crypto-investment community also raised their hands after the idea of “centralization” of the bank did not bode well with their plans.
Fairx thus, decided to call it a day after it realized that further development was impossible without consistent funding.
The tweet thread concluded on a personal note. It read,
“On a technical level, also taking a step back from the crypto ecosystem in general. I think it’s appropriate to wait and see how things start to shape up and identify opportunities to make a great product, that solves actual problems, that creates a sustainable return.”