The Futereum Foundation, a not-for-profit organisation set up to develop Blockchain-based financial solutions on the Ethereum Virtual Machine, is gearing up to list its first token on exchanges at the start of February. A number of recently-introduced cryptocurrency funds are looking closely at the product and they are holding discussions with Futereum now about forthcoming product releases later this year, according to foundation president James Hurst.
“I think there is such a large amount of interest in FUTR simply because, in essence and at heart, it is ETH,” Hurst told The Currency Journal this week.
Crypto funds are a new addition to the digital asset scene, and have come out of the recent boom in tradable Blockchain-based assets. With established crypto funds topping 3000% annual returns in 2017, there has been no shortage of newcomers setting up shop in the space. Just the past week, Japan’s Fisco announced it was launching a $265 million crypto fund, while BlockTower, a fund comprising a former ex-Goldman Sachs banker, was yesterday reported by Bloomberg to have obtained $140 million in funding from family offices and high net worth investors in a private fundraise.
Separately, Crescent Crypto Asset Management, a hedge fund established by 3 ex-Goldman Sachs bankers, has said it is raising funds for a similar venture and Mike Novogratz, a former partner of Galaxy, has announced he is setting up a crypto investment bank to service the industry’s fledgling asset management scene.
Hurst said that the foundation has presented FUTR to some of these names, but that the funds looking closely at buying the product are not among them as far as he is aware right now. Still, FUTR is part of a “wider spectrum of more financially-sophisticated non-securitized cryptofinance product offerings that many of these sorts of players are desperate to take advantage of to generate cryptoalpha returns,” he added.
Futereum May Be The FUTR
FUTR is an innovative smart contract that operates two different algorithms that enable ETH holders to potentially get back up to 7 times their ETH invested. Private individuals have already started to “mine” FUTR by sending ETH to the token’s smart contract address and three cryptocurrency funds are in the process of taking bigger stakes in FUTR, according to the foundation.
The way it works is this: a FUTR miner sends ETH to the FUTR smart contract address listed on the foundation website. Immediately, the miner receives FUTR in the same wallet address from that which they sent the ETH. Although not traditional Proof-of-Work or Proof-of-Stake mining, the foundation uses the term to describe the way in which FUTR is received by the holder because it is an ongoing process that is divided into different Levels of difficulty. In the first Level, which is currently being mined, a miner is given 114 FUTR in return for 1 ETH; in the second Level, they receive just 89 ETH, and so on down by a fraction of around 0.69 each time until the tenth level where they receive 2 FUTR per 1 ETH.
This “Proof-of-Ether” (PoE) mining approach culminates in a swap of FUTR with ETH at the end of the 10 Level-period (in either 12 months time or 36 months time depending on how quickly the Levels are completed). When the FUTR are exchanged for the ETH, however, only a linear algorithm is applied, so that the FUTR holders get back the percentage share of ETH equivalent to the percentage share of FUTR that they own. This process results in better-than-ordinary returns on ETH for three types of investor – the early stage FUTR miners who receive disproportionate numbers of FUTR in return for their ETH; the buyer of FUTR on exchanges where it is traded that purchases when FUTR goes down a lot in value; and finally, the miner of FUTR who purchases ETH when it drops in value and uses the ETH to mine FUTR.
The product is especially innovative because of its use of the escrow-function of the smart contract in order to create a value-enhanced ETH forward swap trade. The Futereum Foundation says that it also intends for FUTR to be a utility token in its own right, and will whitelist FUTR miners’ addresses for forthcoming product releases in which FUTR and other crypto can be used to effect similar transactions as those involved in the FUTR smart contract swap. Currently, the foundation plans to launch two more Futereum products – the second will be launched about mid-year and the third will come at the end of 2018.
FUTR is what foundation chairman James Hurst describes as a “value-enhanced expansion of the Ethereum network”.
“Because the mining is ongoing, and the smart contract is set never to self-destruct or end, the algorithm returns FUTR miners huge amounts of money over various timelines, depending on where they mined,” Hurst said in an interview with The Currency Journal last week.
FUTR Gearing Up For Exchange Listing In February
In addition to the private funds, the foundation is in late-stage talks with a couple of major cryptocurrency exchanges about listing FUTR. It intends to list FUTR on three exchanges in 2018, with the first listing scheduled for February 2.
FUTR will trade alongside a number of other crypto pairs, but not against ETH. This, claims Hurst, will result in a constant arbitration of FUTR-ETH value, whereby the exchange listing price can never quite match the same price as the one at which it is mined in ETH due to the alternate crypto pair that lies between the value of exchange-traded FUTR tokens and ETH.
“It’ll be interesting to see where FUTR is headed in terms of value once it is listed on exchange – will it trade at a premium to mining cost, or at a discount?” said Hurst. “These are all questions we have to wait and see the answer to as something like this has never before been introduced to the market.”