Frequently Asked Questions

What is Abacas?

  1. Abacas is a universal decentralized exchange (DEX) to allow the trade, exchange or transfer of “Any Asset Anywhere Anytime” [4A].
  2. It is a platform and a community fueled by Asset-Backed CoinS (“ABCS”) , built on top of the ERC20 token framework using the Abacas protocol that manages price discovery, order management and trade matching.
  3. The AbacasXchange is a compliant “bid-offer system” much like any other exchange, with the benefit of direct access for all clients.

Whether you wish to buy, sell, list or exchange an asset, the AbacasXchange is perfect for you.

What problems is Abacas solving?

Abacas simplifies the complex world of trading one item for another in a flexible and secure decentralized platform.

  1. Incompatibility – Fractionalization allows any quantity of one asset to be traded for another without the need for an intermediary currency. Clients simply use our native token, ABC’S to pay for the trade.
  2. Asset Security – The “Fulfilled by” model establishes credentials and standards mitigating the risk of counterfeiting, spoofing, or identity fraud.
  3. Asset Control – Subject to the type of asset, a client has autonomy to manage the listed asset:
    1. self-custody – the purveyor manages asset custody
    2. third party custody with selected suppliers – the purveyor outsources to his chosen custodian
    3. third party custody with Abacas partners – the purveyor outsources to “Fulfilled by Abacas” custodians
  4. Accessibility  pre-Abacas, a client was not able to own, for example, a fractional piece of art or fractional securities, much less trade the asset securely in a liquid marketplace. This is possible with Abacas.
  5. Liquidity
    1. Direct and Indirect Trading improve liquidity through “gateway assets”
    2. an infinite supply of assets invites new trading relationships, improving liquidity
    3. the ABCS token enhances liquidity by acting as an asset, a gateway asset and a currency
  6. Conflicts of Interest – traditional exchanges and cryptocurrency exchanges are full of conflicts of interests. The AbacasXchange has only two interests – the investor and his security.
  7. Lack of Transparency – traditional exchanges and cryptocurrency exchanges create order types that specifically disadvantage their client. The AbacasXchange has no part in these tactics.

Why does Abacas need Blockchain?

Blockchain creates an immutable record of transactions clearly defining ownership. It is also used as a tool for audit to provide transparency to the users and for reconciliation of the assets in custody. Exchange settlement times [change of ownership] greatly improve when assets are committed to a ledger.

What are Asset Backed CoinS (ABCS)?

ABC’S are the native payment token for use on the AbacasXchange. It is made up of “abbits” (0.000000001 of an ABCS).

What is Fulfilled by Abacas?

“Fulfilled by Abacas” is a service in which the asset purveyor places the asset in the AbacasXchange Trust with our approved custodians to enhance transparency and accountability. The Trust Instrument and Custodian protect the client’s right of repatriation of the asset represented by the holding. This represents the strongest asset protection model in the financial services industry.

As an exchange, Abacas never controls the ownership of the assets committed to the exchange nor the tokenized assets held by the client. Near perfected ownership.

Why can't another currency or cryptocurrency be used as a native payment token? For example, USD or ETH.

Imagine a typical transaction in which a client wishes to trade from a mosaic on XEM to an ERC20 token via the exchange. That single transaction may require 8 or 10 “partner chain” validations eg PoA (Proof of Asset), AML/KYC, Value Transfers, custodial validations, regulatory validations subject to asset class – each of these chains and suppliers may have a different pricing models based on their service or asset which means that a client would need to hold many 100s of currencies at any time. This is highly inefficient and impractical. The ABCS readily conveys between all of the chains mitigating the cost and nuisance of the micropayments as it relates to the activity in the AbacasXchange.

How does the transaction process work?

The transaction itself happens as it would on any exchange – order management, price discovery, trade matching and confirmation.

For the investor – the client examines the metadata of the asset in which he is considering investment and, based upon the risk profile, decides if this is the asset for him/her. Abacas provides no investment opinion or advice.

The asset to be purchased is exchanged simultaneously for an asset in the buyer’s wallet or account. This means that clearing and settling an internal trade takes seconds not days.

With ABCS, two or more clients can exchange assets of any type in direct transactions; for example, a client can purchase “equity” directly using “gold” in a single transaction. Pre-Abacas, this process would take up to three transactions and up to two fund transfers, each incurring a fee.

Where applicable, Abacas uses its partners to ensure that a relevant client transaction meets the regulatory and compliance requirements for the transaction to be consummated eg. AML/KYC, MiFID, PoA.

How is Abacas an improvement to the current environment?

The AbacasXchange & Community offers many improvements.

The Community Platform

Anticipated to be open-source, the Community assists in communicating and policing behaviour of its members through feedback and member forums.

The community platform allows assets to be easily packaged and repackaged into portfolios for distribution to your clients.

The Exchange

The first direct asset-for-asset exchange, eliminates or reduces unnecessary and extraneous fees.

The exchange is universal, permitting any valid asset to be listed by any asset purveyor, subject to meeting regulatory, compliance, ethical and protocol standards.

Operationally

Abacas uses “gateway assets” and a USPTO-approved multiparty trade matching algorithm to enhance liquidity; the databases are distributed securely on a DLT, the system is cloud-based and internal trade settlement is seconds rather than days.

All internally settled transactions occur at the midpoint of the prevailing foreign exchange price, saving clients a lot of money.

What solutions does Abacas offer asset purveyors?

Abacas provides solutions in risk mitigation, operational efficiency, cost reduction and new product development. Abacas supports direct asset listings, third-party agency listings and the “Fulfilled by” model for professionals such as asset managers, advisors and third party distributors. The platform allows assets to be easily packaged and repackaged into portfolios for distribution to your clients.

Is Abacas creating a fiat currency?

Abacas is creating the exchange layer where “abbits” are the “gas” to fuel the asset transfer between owners. If the underlying asset is fiat eg. @USD, the token that backs it will naturally be fiat; if the asset is tangible such as physical gold eg. @GOLD, the token will in turn be tangible. This may vary with the type of custody the asset purveyor selects.

Generally, the “Fulfilled by” model mitigates many of the operational risks by confirming credentials when the trade is consummated. The listed asset inherits all the characteristics of the asset that it backs, the purveyor that lists it and the custodian that holds it.

How is the value of Asset Backed CoinS (ABCS) determined?

The value of ABCS is determined by the community of users. The AbacasXchange posts that value ongoing.

How does Abacas create a digital asset from a physical asset?

Abacas accomplishes this using client-driven selections that link the asset metadata to the asset it represents. Purveyors construct digital assets using metadata to represent the asset. The more comprehensive the metadata, the better to establish asset provenance and quality. Buyers purchase based upon the metadata presented and their risk profile. This metadata allows the buyer to establish the underlying risk of the asset in a uniform manner – caveat emptor. The community supports the buyer by supplementing the metadata with the trading history of the asset and the purveyor.

For example, listing “Fulfilled by Abacas” bullion held “in trust” vs listing a new fiat cryptocurrency represent two entirely different risk profiles to the consumer. In the Abacas community, these are identified by flagging the asset metadata for the buyer to examine and research. Key considerations when considering an asset purchase include asset provenance & proof of existence, asset control & management, asset location & security, and the rights of ownership – the right of economic benefit, the right of transfer, and the right of use. Client and community feedback has also proven to be a good tool for mitigating fraud.

How will I know that my token is backed by an asset?

All assets that are traded in the AbacasXchange are tokenized. If the asset cannot be tokenized or fails to meet our token standards, it cannot receive a “Fulfilled by designation and cannot be traded in the AbacasXchange.

Abacas operates a “squared book” in which each asset is backed one-to-one by the tokenized asset.  Asset pools are audited, reconciled and publicly displayed in good time in the AbacasXchange website.

Abacas uses blockchain technology to create a tamper-proof ledger that guarantees your exact holdings.

What is the difference between Abacas and others claiming to provide asset-backed products?

Others who claim asset-backing often expose the client to counterparty risk with the asset or coin purveyor, collateral risk with non-approved and substandard custodians or operational risk with inadequate procedural controls.

Abacas never controls the underlying asset [trust and/or custody controlled] or the tokenized asset [client-controlled] and our approved custodians manages all assets in custody.

Abacas™ is creating a marketplace for universal fungibility – a bridge between the real world and the digital payments world.

Abacas levels the “playing field” for all investors and is transparent to illustrate and prove this.

What are the benefits and risks of trading digitally with Abacas versus traditional methods?

Abacas enables access to a larger source of liquidity with lower transaction fees and improved delivery times.

Abacas is a powerful solutions for asset purveyors, advisors, asset managers, investors and consumers in four key areas – risk mitigation, ease of use, cost reduction and liquidity.

Since the exchange is universal, a client should research the asset comprehensively before investing in the tokenized asset. While Abacas does everything in its power to mitigate fraud, it is the responsibility of the client to manage their risk profile.

By purchasing “Fulfilled by Abacas” assets a client can mitigate fraud.

Who has control of the underlying asset with Abacas?

Assets are controlled in the manner chosen by the asset purveyor. Abacas is universal and supports a variety of safe-keeping and custody models, depending upon the needs of our client. For example, a firm may wish to provide safe-keeping for their client when they issue a tokenized asset. In other cases, a firm may wish to place their assets in third party custody for the purposes of asset administration.

How does Abacas value the tokenized assets? Does it track the underlying asset closely?

Abacas is solely an exchange. Abacas never independently values any asset.  However, when a tokenized asset is hard-wired to an asset, the value of the tokenized asset generally tracks the value of the asset. Price discovery is ongoing using real time data feeds (RTDFs). Abacas follows all price discovery protocols and regulations as it pertains to any listed securities, including Reg NMS.

If you can have a token for a basket of assets how does Abacas value it?

Abacas is solely an exchange. Abacas never independently values any asset.  However, when a tokenized basket is hard-wired to a basket, the value of the tokenized basket generally tracks the value of the asset. Price discovery is ongoing using real time data feeds (RTDFs). Abacas follows all price discovery protocols and regulations as it pertains to any listed securities, including Reg NMS.

How many units of trade are included in a tokenized asset?

This is totally in the control of the client, however Abacas will make recommendations in the Abacas setup wizard to promote ease of use, fungibility and convertibility. For example, one token may represent 100 shares of a security.

Does Abacas permit High Frequency Trading?

The Abacas direct asset-for-asset transaction model is simultaneously a liquidity “maker” (provider) and a liquidity “taker” (remover). As an universal exchange, Abacas does not expressly forbid High Frequency Trading HFT, but the potential benefits to HFT firms may be muted.  The AbacasXchange rules remove the order flow manipulation. The AbacasXchange is specifically designed for “real money” trades but can support a community of market makers.

How does Abacas fit with the current financial world?

The financial markets are riddled with fragmentation, manipulation, minimal liquidity and high frequency trading.  Abacas is a timely addition to the financial markets since it represents an entirely new fulfillment model that reduces risk, improves liquidity, enhances availability, and mitigates cost.

Is Abacas a regulated entity?

Abacas is fully regulated within the jurisdictions of incorporation and operation.  In tandem with this, the Abacas team faithfully administers its responsibilities in respect of good governance, self-regulation, best practices and regulatory compliance.

What has Abacas done thus far to ensure it is compliant with regulators?

Abacas transparently approached key regulatory bodies well in advance of initiating our software build to share our business model and our development roadmap and to assess the compliance and regulatory requirements. Further to this, Abacas has formally engaged a compliance consultancy to legitimize our model. To date, Abacas has received two tacit approvals of the model from key regulators; two tacit approvals from self-regulatory bodies; and an endorsement from the Asset Management community. Abacas’ operating entity will be governed by the local regulator and the company will continue to work with regulators throughout the build.

Why now for Abacas?

Any Asset Anywhere Anytime – Abacas levels the playing field, improves liquidity and reduces transactional friction for the client; and, Abacas provides a new style marketplace and community for asset purveyors, intermediaries, traders and investors.

Explain the technology behind Abacas and Asset-Backed CoinS (ABCS)?

Abacas operates two exchanges – a macro exchange for value transfer and a micro exchange to manage the payments processing among and between “chains” involved in the transaction.

Using Microsoft’s Azure Cloud, the Abacas™ Exchange is a highly secure cloud service using the latest web technologies to provide real-time access to Trading, Positions and Account Activity via desktop browsers, PDAs and smart phones. Leveraging the application fabric of the Azure Cloud, Abacas scales dynamically by geographic region to high trading volume in times of market stress and volatility.

Asset provenance metadata, AML/KYC data and post-transaction settlement data are distributed across DLT clusters by Abacas or its partners to provide a distributed, decentralized and highly available data set to satisfy compliance, security and trade matching requirements to consummate transactions. Real time data feeds (RTDFs) are integrated into the exchange to enhance price discovery.

Who developed Abacas?

The core exchange logic and the ABCS token are being developed by the AbacasXchange.  The AbacasXchange community will be funded by the Abacas [AbacasXchange] foundation and will be constructed open source to our standards by our community partners. For further information about the team behind Abacas™ visit www.abacasexchane.com

When will the AbacasXchange be operational?

The AbacasXchange will launch in Q1/2 2019. If you are an asset purveyor, a market maker, an advisor, or an investor and would like to be one of the first to have access to the product, please contact us at www.abacasexchange.com

How can I reach out to Abacas?

For further information please contact

Mark VanRoon, Founder & Head of Product Development   mark.vanroon@abacasexchange.com

Stoyan.Vlahovski, Community Manager   stoyan.vlahovski@abacasexchange.com

Tel: + 44 (0) 2032 860499

Twitter: @abacasXchange

Telegram: https://t.me/ABACASXCHANGE_ABCS

Telegram News: https://t.me/abacasxchange

LinkedIn: AbacasXchange

Facebook: AbacasXchange

 

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