ICO ENDED: Xaurum raised $851,342 in its sale, mostly in ETH.
Xaurum is holding an open sale from July 18th to July 30th.
Xaurum functions as a digital currency with a gold-backed price floor, a few built-in brakes on volatility, and mechanisms that guard against deflation. Anyone can ‘melt’ their Xaurum and receive an amount of gold in the mail at a rate that fluctuates based on market conditions – the gold redemption value is called the coinage ratio and at time of writing is 2.26g per Xaurum. Loomis International stores the actual gold, and The Auresco Institute, a nonprofit registered in Slovenia, manages the purchase and melting of gold associated with Xaurum.
Xaurum calls this event an RICO: Rebirth ICO. The event will resemble an ICO, although technically, the minting process through which new coins are created will now be open to anyone. Minting is normally reserved for those holding 1000 Xaurum and serving as a Masternode. There are no preset prices for Xaurum: instead the price of minting will follow its regular formula, discussed below.
The proceeds of this sale will allow the team to make some important changes to the protocol. It will move off the Blackcoin blockchain and to Ethereum smart contracts. It will purchase additional gold using a new agreement with the NADIR gold refinery, based in the Middle East. The currency will be divisible into 8000 parts, and its ticker will change from XAU to XAUR.
Details of the Sale
|How are funds collected?||Once the RICO begins, interested investors will be able to make an account at rico.xaurum.org will receive the ICO addresses used for BTC, ETH, LISK, and XAU and codes for bank transfers for USD, EUR, GPB, and RUB. Those participating with fiat currencies will need to comply with KYC/AML laws.|
|Coin Distribution||At time of writing, there are 7,487 Xaurum in existence. There is no established distribution during this RICO – whoever wants to buy new Xaurum can do so.|
|Rate||During this RICO, anyone can mint new Xaurum at a formula-given price. The exact formulae involved are given in this table, but broadly, it works out to about an average between the market price of Xaurum and its price floor in gold. At time of writing, the cost of minting is $266, with a Xaurum market price of $411 and an underlying gold value of $97. The rate will follow the formula during the RICO, though it can never go below the last price used for minting.|
|Project Valuation||This doesn’t lend itself to a valuation. On July 14th, underlying value of all Xaurum was approximately $890,000, and the market cap of the cryptocurrency is $3 million. Current data can be found here.|
BTC, ETH, LSK, XAU, USD, EUR, GBP, RUB
How do the coins or tokens work?
|How are they used?||Xaurum is designed to function like a digital currency, with some features that resemble modern fiat currencies. It’s backed by gold. The process of creating new coins guards against both runaway inflation and deflation.
The blockchain itself is secured through a proof-of-stake model.
|What is the market for these coins?||Xaurum does not appear to be designed as an investment asset. If people wanted gold, they could just buy it themselves, and the redemption value of Xaurum should not approach the market value of gold. Rather, it’s a functional decentralized currency with some features of modern managed money systems.|
|How are they produced?||Every Xaurum that enters circulation is backed by a certain amount of gold that is at least as high as the current Xaurum ratio.
Xaurum enter circulation either through mining or minting. In mining, people contribute hashpower to a multipool that mines other currencies; proceeds are used to add to the gold stock and miners are paid proportionally in Xaurum.
The process of minting is a little more complicated. People can purchase new Xaurum with fiat currencies through ‘Mints,’ which are set up through Masternodes (nodes with at least 1000 Xaurum). The price of minting Xaurum can vary based on several factors, including the trade price of Xaurum, the current coinage ratio, and the market price of gold. The formula incentivizes minting when the trade price is high, allowing the Aresco Institute to purchase new gold and increase the coinage ratio, raising the price floor. At minimum, it cannot be lower than the last price used for minting, meaning it will always increase.
The method of coinage is designed to decentralize Xaurum creation (and profits) because having more Xaurum doesn’t give an advantage in minting costs. Once a node acquires 1000 Xaurum and establishes a mint, there is no marginal benefit to acquiring new Xaurum. It’s worth noting that there can only be one Masternode for every 1000 Xaurum in circulation; currently, that limit is seven.
|Smith+Crown can confirm the Xaurum team is responsive to email and answered many of our questions. The design of the currency is complex, and we encourage the interested reader to review the source material to understand the proof-of-stake protocol, the formula for determining coinage, and the security around the physical gold bars.|
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