South Korea’s ICON to Back VELIC, Which Aims to Become the JP Morgan of the Digital Currency World

January 21, 2019
NEW YORK, NY / ACCESSWIRE / January 21, 2019 / ICON (ICX), as one of Korea's top blockchain projects and one of the largest blockchain networks in the world, was introduced as "Korea's Ethereum" in various presentations. The close relationship

NEW YORK, NY / ACCESSWIRE / January 21, 2019 / ICON (ICX), as one of Korea’s top blockchain projects and one of the largest blockchain networks in the world, was introduced as “Korea’s Ethereum” in various presentations. The close relationship between ICON and the Korean government has made it a national project that has been well-regarded by the Korean people for a long time.

As a comparison to the Chinese market, ICON is more like Korea’s Ontology, which focuses on technology development and has government ties. For more than a year, ICON has focused on blockchain technology services for government, financial institutions, and large companies, providing blockchain solutions for more than 30 traditional business units. As a bottom level public chain project supported by the Korean government, it is not feasible to issue a large number of small projects. Therefore, ICON has targeted the most active aspect of digital currency - transactions - and recently announced the backing of VELIC.

VELIC will be a comprehensive digital assets service provider. The company aims to bring an extensive ecosystem with services for digital assets. One of the main services VELIC will provide includes an exchange for digital assets. Aside from digital asset exchange/transactions, it also offers comprehensive financial services such as loans, ETFs, and fixed income investments, providing one-stop financial services for institutional investors and individuals in an attempt to become the JP Morgan of the digital currency industry.

We had the opportunity to interview Timothy Yang, VELIC’s Chief Strategy Officer, and invited him to describe VELIC and share his views on current markets and policies. Timothy received a JD from Harvard Law School and a Bachelor of Economics from Dartmouth College. He has eight years of legal experience in finance and financial derivatives industry.

Timothy Yang

Interviewer: Hello, Timothy. Before talking about VELIC, I wanted to discuss how your educational background and work experience helps with the current global nature of the market and specifically between the US and Korea. What are your thoughts on the current attributes of the Korean market? What’s the experience transitioning from New York to work in the digital asset and Korean industry?

Timothy Yang (TY): The Korean encrypted digital currency market is very active, and the activity of exchanges, project parties, and investors is among the highest in the world. But I can’t call it a completely developed market, because the legal framework for digital currency has not been fully developed. The current situation is interesting - practitioners and ordinary people alike are interested in this new industry, and have been excited to participate in it. However, introduction of policies and regulations has lagged, and policy makers cannot give anyone enough legal comfort, because the policy makers can’t tell participants what they can and can’t do. Of course, this is part of the charm of blockchain, but it is obvious that such uncertainty must eventually clear up for further development of the blockchain industry.

In this respect, the attitudes of various Asian governments differ. The Chinese government strictly prohibits digital currency in all aspects; Japan conditionally allows industry development (within a strict policy framework); Singapore is open and welcomes new financial technology, so many projects and foundations choose Singapore as their place of registration.

This situation has allowed me, with my legal background, to find a niche and opportunities. My background in the US financial derivatives industry has given me a lot of experience and inspiration. There are many similarities between the digital currency market and traditional financial markets. Many of my clients in the past were hedge funds or derivatives traders who used a large number of investment vehicles (contracts, futures, and other derivatives) to execute their trading strategies. If we can find opportunities to offer a variety of investment vehicles or products to digital currency investors (especially in securities-based token transactions), this will create huge business opportunities. VELIC is committed to providing a full financial services platform, from existing utility token trading to future securities token transactions, from ordinary investors to professional investors. We understand that securities-based tokens are currently facing many legal challenges, but this will also be our advantage.

Interviewer: You mentioned the impact of policy makers on the industry. Can you elaborate on this?

TY: According to my experience in the traditional financial industry in the United States, policy makers in various countries are facing different problems, and they often observe the decisions of policy makers in other countries before establishing their own. If some countries can take the lead in exploring or guiding digital cryptocurrency policies, other countries will respond. In the financial industry, such policy flows are usually enacted by the United States, and other countries follow according to their own situations. Therefore, my experience in the United States helps me a lot, and helps me recognize what policy makers from other regions (mainly South Korea) are thinking about, letting me identify problems and even allowing me to give advice. When I talk to Korean policy makers and politicians, they are very interested in what is happening in the US and Singapore.

Interviewer: Let’s move on to VELIC. Could you describe it for us?

TY: VELIC is a comprehensive financial ecosystem service platform. As a comparison, JP Morgan is a universal bank. They are engaged not just in commercial banking but also investment banking service as well as asset management, custody, financial advisory and so on. We hope that VELIC can become the JP Morgan of the digital currency industry in that we can provide a multitude of services to VELIC’s users on a single platform. Interestingly, many of the established financial institutions are interested in the digital asset business - they will be terrible competitors, but perhaps it shows that we are on the right path.

There’s a need for a comprehensive service platform for digital assets; although there are various types of service providers on the market that offer different types of products and services to digital currency investors, the synergies between products are often overlooked. On the VELIC platform, users can seamlessly use products and services with the same account, greatly improving the utility and user experience of financial digital asset management.

The services that VELIC provides are in the name - V stands for Vault, E stands for Exchange, L stands for Loan, I stands for Investment, and C stands for Crypto. All of our services are focused on digital assets. The diverse background of the VELIC team allows us comprehensive product design. In addition to technical support from ICON, our core team consists of experienced quantitative, financial consulting, derivatives, and trading system development engineers and professionals.

Interviewer: What do you think are the technical advantages or VELIC and how does it address core needs of users? How does VELIC compete?

TY: We believe that the pain points in the current market still exist in the two aspects of storage/custody and trading. One of the key ways VELIC differentiates from other exchange and service providers is security of private keys and custody. The custody service is the VELIC Vault, which we will review in detail.

First, let’s review a brief background on exchanges today for comparison. Most exchanges use a hot wallet and store the entire set of private keys in a database, then run a firewall to block hackers. However, a hacker can enter as long as they break through a single point, and with all the private keys lying in the database, the hacker can easily take away everything. And a single point of failure can easily happen, either because it is being attacked or because a server is down (as is common).

What this means is that for many buyers of Bitcoin today, the asset is kept on the exchange but customers don’t directly hold private keys. In a sense, users can’t know if they really hold Bitcoin. It might be just a number displayed on their exchange accounts. Fortunately, the assets you hold on an exchange presently serve basic trading needs for buying and selling on the exchange. But the main risk of an exchange is whether you really hold a certain digital asset, and is the primary concern of all digital crypto-asset investors and users. Japan’s well-known exchange, Mt. Gox, declared bankruptcy due to hacking and user runs, and should be the best-known case of asset failure in the industry. A user could not directly hold a private key on the exchange, so users’ digital currency assets could not be honored after the exchange shut down, and leading to heavy losses.

VELIC offers a different solution, which is to use the secret sharing protocol along with its own additional security layer. The basic secret sharing protocol has been around for years and has been validated and adopted by the industry. The principle is that the entire set of private keys is no longer in one place, and the fragmented clues of private keys are stored separately in different nodes, thus being protected as a whole.

For instance, when you solve a quadratic equation such as y=ax2 + bx + c, there are countless points on the curve, but we only need three of them to determine this function (the curve). We treat private keys like an equation. We don’t store the values of a, b, and c directly in different nodes, but store what amounts to the relevant points on the curve instead, which are like clues. Suppose that we have 4 different storage nodes. Each node stores a point of information, which means that even if one or two nodes are compromised, the hacker still can’t get the entire private key, and the private key is safe.

This is one example of our secret sharing protocol, which is decentralized, so there is no concern about a single point of failure. Each storage node keeps a partial clue to unlock the private key, but does not save any part of the actual private key. At the same time, we can add more storage nodes and increase the dimensions of our equations (and thereby increasing the threshold number of clues needed) to improve security and decentralization. Of course, VELIC also provides a higher level of security by using an additional layer of encryption, so even if multiple storage nodes are compromised, the private key cannot be obtained.

Many blockchain projects are afraid of 51% attacks, but due to VELIC’s encryption layer, even if there are enough storage nodes collude together, the private key cannot be regenerated. Not only that, we plan to use a blockchain network to record all information regarding the private key generation, splitting, storing and synthesis, as well as the actions of all storage nodes to monitor the entire private key-related activities so as to further eliminate potential compromises and/or collusion.

Interviewer:So what kind of roadmap is there for services other than Vault and Exchange?

TY:VELIC will be starting to implement the service platforms starting in Q1 2019. The strategy is to strengthen the company’s permanence through strategic investments and plan to commercialize a variety of services. This will occur at a global scale, as VELIC reaches out in Asia, North America and Europe.

VELIC will also utilize the value from the ICON partnership. The strategic partnership with ICON will help bolster VELIC’s services even further, by bringing global resources as well as technology. By utilizing ICON’s proprietary technology (Loopchain), VELIC will be able to scale up its financial services.

Our 1.0 version focuses on the current market pain points and will introduce loans and ETF-like investment products after a certain accumulation of users and transaction pairs, expected to be in the second or third quarter of 2019.

Interviewer: Through our interview, I believe that VELIC is a very ambitious project - it is good to put the safety of customers first. I hope that VELIC can gradually realize its vision according to its own plan and benefit many investors and also trader. Thank you Timothy, for participating in today’s interview.

For more information, follow VELIC on:

Whitepaper: bit.ly/2R4G1U6

Fact Sheet: bit.ly/2F1vRNF

Website: https://velic.io

Telegram: https://t.me/velicfinancial

Twitter: https://twitter.com/velicfinancial

Facebook: https://www.facebook.com/velicfinancial

Medium: https://medium.com/velicfinancial

Reddit: https://www.reddit.com/r/velicfinancial/

Bitcointalk ANN: https://bitcointalk.org/index.php?topic=5087822.0



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