Almost 30 percent of the equity in WEG Bank AG, a previously obscure German bank focused on the real estate industry, is now owned by companies in the cryptocurrency industry, CoinDesk has learned.
By purchasing 9.9 percent of the bank, blockchain startup Nimiq now joins TokenPay and the Litecoin Foundation as part owners of the Munich-area financial institution. (Under German law, foreign ownership stakes of 10 percent or greater require additional regulatory approval.)
TokenPay became the first crypto company to acquire the bank’s equity in 2018, with Litecoin Foundation director Charlie Lee joining the bank’s board in a related move. Then WEG Bank enlisted Nimiq to help develop infrastructure for external crypto-to-fiat conversions for banking clients.
Nimiq co-founder Elion Chin said in a statement:
“With Litecoin and Tokenpay as existing shareholders, new clients including [blockchain application platform] Lisk, and other key prospective partnerships, we believe WEG Bank is on the way to reinventing itself as a bank of the future.”
This cross-industry partnership could eventually offer fiat liquidity to decentralized exchange (DEX) users – if they pass the WEG Bank’s screening process.
These days, few DEXs can connect to institutional bank accounts for professional usage, unlike centralized exchange options. Meant to help facilitate the first DEX to WEG Bank AG transaction, the in-progress Nimiq system is scheduled for a limited launch by 2020. That said, WEG Bank AG will remain a traditional bank, never directly touching cryptocurrency.
“For the past 12 months, we have been looking at various ways to expand our core banking activities into the blockchain community,” WEG Bank AG CEO Matthias von Hauff said in a press statement about the effort in February. “With Nimiq, we have been able to develop not only a landmark payment interface which has the potential to revolutionize the way we deal with cryptocurrencies, but also an innovative and powerful partnership.”
For its part, Nimiq announced in a blog post that it would work with DEXs like Agora Trade to act as a “middleman to transfer funds between crypto markets and the traditional banking system,” charging a small percentage of transaction fees along the way. In return, the blog post says, Agora Trade will list Nimiq’s NIM tokens for cross-chain trades with ether and bitcoin without any exchange fees for NIM users.
Nimiq is also partnering with Binance-owned Trust Wallet, according to a recent blog post. The aim is to eventually give users across DEXs access to liquid euros for transactions made with bitcoin, ether or NIM through Nimiq’s upcoming “crypto-to-fiat bridge” called OASIS.
Nimiq Makes Fiat Currencies Blockchain-Compatible
When opportunity turns into groundbreaking innovation
Team Nimiq is thrilled to announce that we are developing a new and potentially disruptive Crypto-to-Fiat bridge in collaboration with the German WEG Bank AG and Swiss-Maltese non-custodial cryptocurrency exchange Agora.Trade. Today we would like to introduce a high-level description of what this solution means, how this next big step in Nimiq’s journey came about and what’s been happening behind the scenes.
This innovative approach focuses on making the Euro (USD, etc) directly behave as if it was a token on the blockchain, by providing a smart and unique way of connecting the traditional banking network with crypto exchanges. It could disrupt existing stablecoins, over-the-counter (OTC) and crypto payment processing markets by enabling an open, simple and fast way to exchange value between crypto and fiat systems. Challenging the crypto payment processors could have a profound impact on online merchants in the space and eliminate unnecessary middlemen.
Connecting the dots
In October 2018, Nimiq came in contact with Matthias von Hauff, the progressively thinking Founder and CEO of the WEG Bank AG. The fruitful initial conversations between Nimiq co-founder Elion Chin and Matthias von Hauff called for a more extensive get-together in person. The opportunity to brainstorm and bring Nimiq together with a traditional bank proprietor that is uniquely open to crypto made sense in every way. While the meeting was swiftly scheduled for November 2018 during Nimiq’s hackathon in Costa Rica, the growing relationship with Agora Trade triggered the idea to also invite its founding partners Reto Trinkler and Andrea Castiglione to expand the brainstorming into a roundtable triangle of boundless creative potential:
- Payment Protocol: Nimiq, the browser-first blockchain that leads with ease-of-use, represented by Philipp von Styp-Rekowsky, Pascal Berrang, Marvin Wissfeld, Elion Chin and counsel Mauricio Lara.
- Financial Institution: German WEG Bank AG and its ‘can do’ crypto-revolution-friendly owner Matthias von Hauff.
- Exchange: Non-custodial, browser-based exchange Agora Trade and its visionary founders Reto Trinkler and Andrea Castiglione.
Making magic happen
In just three days the group went from sharing their respective views regarding technological solutions and practical needs, to Philipp, Pascal and Marvin drafting a groundbreaking scheme blueprint for Crypto ⟷ Euro (USD, etc) transactions: an approach that establishes the Euro itself as the programmable counterparty to a non-custodial cross-chain transaction. In simple terms, it means that in a transaction to buy or sell Crypto, the counterparty could now be a Euro account holder,
- Without a single, centralized intermediary ever controlling the two assets that are being exchanged, and
- Without the private keys of the blockchain asset ever leaving the owners possession.
One of the beauties of the solution is, that it works without issuing or acting through a stablecoin, by enabling the Euro directly to behave as if it was a token on a blockchain.
Introducing Nimiq OASIS
Nimiq has set out to develop Nimiq OASIS (Open Asset Swap Interaction Scheme), the middle layer that powers Fiat / Crypto trades as described above. Following additional engineering meetings with Fiducia GAD IT AG, one of Germany’s largest financial institution API providers, Nimiq has recently finalized the specification of this layer. NIM ⟷ Euro trades will be triggered on the Agora Trade platform and supported by the WEG Bank AG. The general potential of Nimiq OASIS goes far, as following an introductory period, it will be non-exclusive and empower other banks, exchanges and blockchains to tie in and allow decentralization and adoption in ways that reflect the spirit of blockchain technology.
Matthias von Hauff, Founder and CEO of WEG Bank AG:
“For the past 12 months, we have been looking at various ways to expand our core banking activities into the blockchain community. With Nimiq, we have been able to develop not only a landmark payment interface which has the potential to revolutionize the way we deal with cryptocurrencies, but also an innovative and powerful partnership.”
Reto Trinkler, Co-Founder of Agora Trade, Forbes ’30 Under 30’ list maker:
“Overregulation and lack of innovation lead to the development of custodial exchanges and financial intermediaries such as stablecoins. By combining an easy-to-use payment token, a noncustodial exchange and an innovative fiat bank we go back to the heart of what blockchain is all about; Self-sovereignty and removing unnecessary middlemen.”
What is the disruptive potential?
A Crypto-to-Fiat bridge powered by Nimiq OASIS could significantly change the landscape of the following markets:
- Over-the-counter market: This is built on matching and executing large scale crypto-to-fiat transactions. The vision is to enable the solution to scale through strategic partnerships and bring vast amounts of liquidity. This could have deep ramifications for those drawn to more conventional OTC markets. Quite simply, these entities and individuals could sooner or later have a much quicker, easier and cheaper alternative to move value between the two ecosystems.
- Stablecoin market: The recent rise and popularity for alternative stablecoins to Tether has demonstrated the demand amongst crypto investors for a convenient way to hedge against the volatility of cryptocurrency markets. Nimiq OASIS provides these users with yet another alternative and could be set to eat into market share by allowing the seamless transfer of value between crypto and fiat.
- Online crypto payment processing: In short, this market acts as a middleman to transfer funds between crypto markets and the traditional banking system. By tying directly into decentralized exchanges, our solution eliminates the need for 3rd party custodial processors and has the potential to disrupt the business models of industry leaders. It can also make it easier and cheaper for platforms to accept crypto deposits and for merchants to adopt crypto payment methods.
How NIM and the Nimiq Ecosystem can benefit
While this significant contribution to the cryptocurrency universe is intended as open source, there are some direct benefits to the Nimiq project and community.
- Marketing: Nimiq licenses and brands this technology — leveraging the power of this scheme to work as a most elaborate form of native marketing.
- Fee Percentage: WEG Bank AG recognizes Nimiq’s critical contribution to their venture and grants the project a percentage of the fees they might collect. Nimiq intends to use this potential source of income to further promote the project and its adoption.
- Zero Fee Trade: Agora Trade is committed to listing NIM as first coin for cross-chain trades with ETH and BTC. In recognition of Nimiq’s contribution, Agora Trade will not charge fees for any NIM related exchange services, which creates a strong and unique incentive to use and trade NIM.
Nimiq, WEG Bank AG and Agora Trade have already started implementing these plans and are targeting going live with first non-custodial NIM|BTC|ETH to Euro trades by Q4 2019. A post with more technical details on Nimiq OASIS will follow.
The Nimiq team would like to take this opportunity to express our gratitude to our amazing community that shares the passion in our hearts. We are more committed than ever to revolutionizing money.
P.S. Check out Nimiq’s new website teaser at nimiq.com.
Nimiq in a Nutshell
A simple, secure and censorship-resistant cryptocurrency, native to the web.
Nimiq is blockchain technology inspired by Bitcoin but designed for the browser.
Unlike cryptocurrencies such as Bitcoin and Ethereum, Nimiq does not require a third-party node to send transactions directly from the browser. This advantage allows for a new level of accessibility and user experience without the need to compromise on decentralization or censorship-resistance. Empowered by these features, Nimiq provides a frictionless transfer and store of value directly applicable to the real world: The NIM cryptocurrency.
NIM is the heart of an ecosystem of applications built by the community and the team alike. The free-to-use browser wallet by Team Nimiq is an example of the simplicity made possible by the browser-first blockchain. Creating a Nimiq account on the website requires no download, no personal data and takes less than 2 minutes. Keys are stored in the user’s browser and are never sent to a server. A redesign (ETA April ’19) will improve account creation, making it faster to create a Nimiq account than a Google or Facebook account. The project donates some NIM to new users. Try it here.
The same level of easy accessibility is projected for buying and selling NIM as well. Nimiq has started working with a non-custodial exchange and a financial institution to facilitate trustless conversions of NIM to other cryptos, as well as NIM ⇆ Euro.
Nimiq’s protocol and application code is open source. It is a community-driven nonprofit project developed by a multinational and tech-focused team.
For Team Nimiq, impact is more than business. Two percent of the total NIM supply has been irrevocably assigned to Nimiq’s charitable foundation, vesting over 10 years. As the value of NIM grows, this foundation will be enabled to support good cause initiatives with high social or ecological impact.
A whitepaper for Nimiq 2.0 – the evolution of the current protocol – will soon be published. Nimiq 2.0’s novel consensus algorithm will achieve a performance close to the theoretical maximum of a single-chain protocol.
Barrier-free value exchange for everyone.
Enable the most accessible,
censorship-resistant payment solutions.
- Argon2d maximizes resistance to GPU cracking attacks. It accesses the memory array in a password dependent order, which reduces the possibility of time–memory trade-off (TMTO) attacks, but introduces possible side-channel attacks.
- Argon2i is optimized to resist side-channel attacks. It accesses the memory array in a password independent order.
- Argon2id is a hybrid version. It follows the Argon2i approach for the first pass over memory and the Argon2d approach for subsequent passes. The Internet draft recommends using Argon2id except when there are reasons to prefer one of the other two modes.
All three modes allow specification by three parameters that control:
- execution time
- memory required
- degree of parallelism