Safex describes itself as the blockchain engine for eCommerce. Originally founded in 2015, Safex is an open-source software project which aims to bring mainstream eCommerce into the world of cryptocurrency. While being based on CryptoNote with similarities to Monero (XMR), there are several key features embedded within the Safex protocol which makes it way different.
There is not only one but two cryptocurrencies implemented - Safex Cash (SFX) and Safex Token (SFT). Furthermore, there are additional sophisticated transaction types beside regular send/receive functionalities which serve specific purposes for the intended use as an eCommerce protocol.
Safex Cash (SFX)
Safex Cash (SFX) is the proof-of-work mineable cryptocurrency integrated in the protocol defined by the following specific features:
- Implementation of ring signature technology to obfuscate balances and transaction histories from third parties.
- An S-shaped emission curve to ensure miners are fairly rewarded over a long period of time, followed by a low tail emission after the regular emission schedule.
- A proof-of-work mining algorithm called RandomSFX which gives an advantage to miners with regular CPUs.
With regard to these features it can be stated that the primary use of Safex Cash (SFX) is being a medium of exchange for goods and services. Transaction fees for any transaction type are being paid to miners in Safex Cash (SFX) only. The emission schedule as well as the mining algorithm aims to ensure a wide distribution of the currency over a long time as well as a high velocity of money.
Safex Token (SFT)
Safex Token (SFT) is the second cryptocurrency embedded in the Safex protocol. It can not be mined but has a limited and fully circulating supply. It serves as a utility token having the following functionalities:
- Ability to create accounts on the Safex blockchain by temporarily locking a specific amount of Safex Tokens (SFT).
- Ability to participate in the revenue share system by temporarily staking a specific amount of Safex Tokens (SFT).
In order to create an offer for a product or service on the Safex blockchain, a Safex account has to be created. The need of locking Safex Tokens (SFT) temporarily ensures that spam on the network is limited to a certain amount.
By staking Safex Tokens (SFT), holders can participate in the revenue share system and earn fractions of the volume that is traded over the protocol in Safex Cash (SFX). This cash flow is generated by a 5% fee that is subtracted from every purchase from buyer to seller and put into the Safex fee pool. Safex Token (SFT) stakers are eligible to regularly claim a respective fraction of said fee pool according to their staking balances.
Key functionalities of the Safex protocol
In order to really serve as a blockchain engine for eCommerce, there are more functionalities needed beside regular transfers of both embedded cryptocurrencies. These key functionalities are summarized shortly below:
Sending of Safex Cash (SFX) and Safex Token (SFT):
The most obvious and important functionality is a basic transfer of either Safex Cash (SFX) or Safex Tokens (SFT) to another address similar to Monero (XMR) or Bitcoin (BTC).
Creating and editing of merchant accounts:
In order to host offers on the Safex blockchain, a merchant account has to be created. It contains information such as name, description and an avatar URL.
Creating and editing of offers:
An offer hosted on the Safex blockchain can contain information such as name, description, URLs for pictures, quantity, price and an attached price peg. This information can be edited at any time later with another transaction.
Purchasing of offers:
The purchase of an offer results in a cash flow from customer to merchant, a cash flow from the customer to the fee pool, as well as the creation of a non-transferrable feedback token for the customer.
Creating feedbacks for purchases:
A customer can rate his purchase with a 0-3 star rating and an additional description. The need of the introduced feedback tokens guarantees that only purchases which have really been executed on-chain are being rated.
Creating and editing of price pegs:
A price peg can be programmed, introduced and regularly updated on the Safex blockchain. This is useful for merchants who want to sell their goods and services at specific values in fiat currencies. If the market price of Safex Cash (SFX) increases versus the desired fiat currency, the offer price will be adjusted down and vice versa.
Staking and unstaking Safex Tokens (SFT) to earn revenue share:
Safex Tokens (SFT) can be staked on the protocol. This means that they are locked temporarily and can not be used for other transactions during this time. It is worth to highlight that although locked, the tokens are always in control of the original owner and are not transferred to a third-party staking provider. A required minimum amount as well as a minimum staking duration are put in place in order to limit the overall transaction activity to a certain extent.
Utilizing the Safex blockchain
The Safex protocol serves as the base layer which adds and keeps track of transactions taking place on the network - basic sending of Safex Cash and Safex Token, account creations and edits, offer creations and edits, ratings, staking and unstaking of SFT, distribution of SFX revenue share - yet, it is not a fully functional marketplace entirely on its own.
The first application being built to utilize the Safex blockchain for eCommerce use is Safex Marketplace by TWM Inc. Primarily, the application serves as a wallet so that users can easily execute the different types of transactions mentioned before. Secondly, it also has implemented a message delivery function so that customers can share their address details with merchants during the purchasing process in order to receive products. A chat function enables customers to further interact with a merchant after a purchase has taken place. The World Marketplace (TWM) by TWM Inc. is a curated application with the goal to connect customers and merchants who want to try out this new technology and give them the best experience possible in a controlled environment.
The Safex blockchain is a protocol that can serve as a base layer for various different applications in the eCommerce sector. TWM Inc. is taking the lead by programming Safex Marketplace application which utilizes the key functionalities of the Safex blockchain and combines them with other features to make it a fully functional eCommerce platform. While the first version of this application has already been launched and sales activity taken place, this is only the start since the Safex protocol as well as Safex Marketplace is continuing to be developed further.