Crypto Wine Exchange

lambolife (40)in #cwex • 6 years ago (edited)

Crypto Wine Exchange is a decentralized fine wine market built on the EOS blockchain.

Imagine being able to trade wine at a global scale without the hassle and high fees imposed by cross-border regulations? Even if you are not a wine drinker, as long as you are in the crypto market CWEX is definitely worth atleast a look. I'll talk about the technicals in a moment but let me just give a very short background on wine.

Wine

Wine is made from the fermented juice of grapes, but wine grapes are different from table grapes. They're smaller, sweeter and have lots of seeds. Wine drinking can either be a social event or a personal indulgence.

It has a rich variety of tastes that have been enjoyed by people for countless generations. Wine production dates back thousands of years ago and is deeply embedded in our culture, history, and agriculture worldwide.

Wine has a similar property with some assets such as jewelry and land in the sense that its value grows with age. As much as jewelry gets more valuable over time due to its limited resource and scarcity, fine wine becomes better with age as chemical reactions involving a wine's sugars, acids and other compounds can change the scent, color, and taste of the wine. Therefore, the wine becomes more valuable.

Now back to the Crypto Wine Exchange

Their aim is to bridge the gap between the Fine Wine market and cryptocurrency technology. Essentially, what they are creating is a blockchain-based fine wine trading platform.

There are many wine exchange markets existing today such as Cavex and Liv-Ex but they are complicated and have high commission fees, among other disadvantages.

Buyers have limited buying options internationally. For instance, Cavex only allows trading of wine bottles stored in UK- bonded warehouses.

For the seller's side, trading wine globally has a complicated procedure and they lack intermediaries who can market their products effectively. Even if you sell your products you may have to pay additional fees if you don't know your way around cross-border regulation.

This proves the difficulty in establishing a great global wine market. If we look at this issue more closely, it boils down to heavy taxation and legal requirements imposed by governments. CWEX aims to work around or mitigate this. But how are they gonna do it? Well they are not alone.

Two companies are working hand-in-hand to make this a reality:

WEX Limited

Hong Kong in partnership with

DotChain GmbH

based in Switzerland.

WEX Limited is what I'd like to call the Technology side. They manage the decentralized exchange platform itself, specifically the trading system. They promise to charge a very low commission rate of 1%. Furthermore, they will provide a fully automated and free to use portfolio
management system for members to self-manage their fine wine collections and trade them on a consolidated marketplace.

DotChain is the business and legal side. They are mostly in charge of things that go on outside the exchange like insurance, legal issues and tax.
It is also their job to onboard partners and merchants and verify their authenticity. All wine sellers have to go through them. They will also be responsible in the issuance of blockchain-based ownership certifications, among other things.

So how do you use the platform?

It's relatively simple

First step is to Bid or offer
As a registered trader, you can place a bid or offer for a selected fine wine.

Step 2: Once your bid or offer is matched, you are notified of the successful trade.

Step 3: CWEX and DotChain secures the asset and creates insurance for it at the same time handle all the compliance requirements.

Step 4: Blockchain-based ownership certification is transferred to the buyer. You will receive the ownership certification on your account as a guarantee of the bottle´s authenticity and the investment value.

Step 5: As the certificate owner, you have three options – your ownership certification can be traded on the platform, held for price appreciation, or delivered to your location.

Now you might be thinking, wine tastes great but what does this have to do with the average investor? Afterall, majority of the people involved in the crypto space are investors not wine enthusiasts.

If you had been paying attention to the news, you might have found that the cryptocurrency world has a bad reputation for having traded asset backed by nothing, and to some degree, there is truth to this because for even the most popular ones like Bitcoin and Ethereum, the instrinsic value is the platform itself. In contrast, CWEX is backed by a real world asset.

In fact, wine is one of the fastest-growing assets; as the team quoted in their whitepaper: "Our decision to initiate this exchange is based on the fact that fine wine is one of the high-ranked collector´s items and an asset of investment and value preservation."

With its unique feature as an asset class, fine wine has traditionally been considered as a low-risk, stable investment. Over the past five years, wine investors have witnessed a 10 to 20% yearly return on their investment.

The global wine market was valued at almost 290 Billion dollars in 2016 and is largely dominated by European countries but the demand from Asian countries is growing fast, especially in China.

CWEX plans to use 12% of their ICO funds for community and growth. And this is important not just for the success of their exchange but for the wine industry as a whole. We need a global platform for communities to have an active discussion on this topic, and it should be as less fragmented as possible.

Different people have different tastes, which have evolved through many generations. Harry McWatters is a pioneer of the wine industry and to him, this is crucial.

So as you heard the future of fine wine is in the hands of consumers and wine communities. Now we have established that wine is a high value asset in and of itself, but coupled with crypto technology we can make a borderless global market of fine wine for all generations to enjoy.

Now let's discuss the drawbacks of this cryptocurrency. Personally, I wished they chose Ethereum to build their platform on as opposed to the EOS blockchain. As some of you might know, EOS is currently facing a lot of technical issues and they are not too keen on decentralization as stated by their founder, their focus is on and I quote “anti-censorship and robustness against being shut down.” which is good as that protects their system, but not from themselves. As proven before, they can reverse even confirmed transactions.

The CWEX platform also has the same concern of how decentralized their decentralized exchange really is, as they have an authority figure, DotChain GmbH. In a perfect world, the platform would be completely decentralized w/o the need for an intermediary to ensure product quality, but its not a perfect world so Dotchain has to do job. Is it good enough? Yes in my opinion because they are reducing the intermediary to just 1 as opposed to non-crypto markets where you have to go through banks, cross-border customs, among many other parties leech from your profits.

But what do you think? Does the crypto industry have room for a fine wine exchange market? Tell me I'd also love to know what you guys think.