The following is an objective review of the FUSION project. The review is based on the criteria that we think are important for an ICO project to succeed. We measure a successful ICO by short and long-term ROI estimation. The following is not financial advice.
Bitcoin and blockchain were invented back in 2008. The Bitcoin blockchain allows one to transfer the digital asset, Bitcoin, to another without an intermediary. The Ethereum blockchain, founded by Vitalik Bouterin back in 2014, allows the interaction between parties with different set of rules that cannot be changed and are transparent to all, with the involvement of digital assets on the Ethereum Blockchain. Since then, many different blockchains (private and public) have been created, serving different use cases.
The great potential of the blockchain is its ability to exchange and manage all kinds of assets without an intermediary, in no time, and with extremely low fees (Internet of Values). The process of digitizing real-world assets like bonds, land, content, identity and more has already begun. However, these assets are not on the same blockchain. They are on different blockchains – private and public.
Great potential is hidden in the Interoperability between blockchains. FUSION blockchain is aiming to serve as the infrastructure for the Internet of Value with an innovative approach. It will allow multiple token smart contracts, parallel computing, off chain data support, and multiple triggering mechanisms for the smart contract (Time, data and more).
FUSION’s ICO is ongoing with an innovative mechanism to allow as many participants as possible.
Let’s get going with our evaluation!
FUSION is a project led by the CEO of BitSe. BitSE was founded by Dejun Qian in 2013 and is an incubation blockchain company that founded QTUM and VeChain.
QTUM and VeChain are both blockchain foundations. Both were created by BitSE and became independent entities. Both projects have had ongoing product and business development since they were created. Both projects launched their native tokens via an ICO and at the time of writing ranked in the top 20 crypto projects by market-cap.
FUSION’s core team consists of 22 full time team members, 14 of them are on the technology side.
Dejun Qian – Visionary & Principal
CEO and Founder of BitSE, created Qtum and Vechain. Previously was a branch general manager at IBM. Holds a Bachelor of computer science, Fudan University.
Dr. Jiangang Wu – Foundation Development
Holds a PhD in financial mathematics and engineering, Shanghai University of Finance and Economics. He is a Research fellow at the China Europe International Business School, and a lecturer at the Management School of the Shanghai University.
Noam Cohen– Foundation Communication
Former VP of marketing and business development at Orbotech, over 15 years of experience in marketing for various Tech organizations. Holds a Bachelor’s in Electronic Engineering from the Technion (Haifa, Israel) and MBA from Insead.
Daniel serves as an advisor and board member to several companies. Previously, he was a Partner and the Global Head of Technology for investment management at Goldman Sachs.
For the past 9 years and currently, Michael has been the managing director of Barclays Investment Bank. Previously he worked for Lehman Brothers as an Equity Derivatives Trader. Holds a Master of Financial Engineering Science, Columbia Engineering.
To explore all team members, please visit FUSION.org
The Internet of Values (IoV)
Some attribute the invention of the blockchain to the beginning of the Internet of Value. The Internet of value refers to the possible exchange and management of digital assets securely and without an intermediary. Today we have the ability to exchange and manage assets by private entities like Banks (Money transactions, Loans), Governments (Land, car, apartment ownership), AirBnB (connecting free apartments with bed seekers), Uber (Connecting free drivers with transportation seekers) and so on. Banks for example have management systems to make sure there is no double spending or that someone actually holds the money they wish to transfer. These systems cost time, fees, and are vulnerable to hacks (one system to hack). The blockchain allows someone to transfer a digital asset to another without an intermediary. The miners/nodes validate that there is no double spending and that one has the money he intends to send. It significantly reduces costs, time, and is extremely secure.
Digitize real world assets
In order for the Internet of Values to exist, assets first need to be digitized and loaded on the blockchain, for example, bonds, energy assets, real estate, content (music, art, scientific inventions, etc.), identities, and more. This process has already begun and recently we heard that Dubai launched their government backed digital asset and are moving to become a blockchain powered government. This strategy could cut 25 Million man hours and realize 1.5 Billion USD of savings per year to the Emirates.
The three main issues for the existence of the IoV
To allow people to transfer and manage values via the IoV (Internet of Values), in the same way as we do with information on the IOI (Internet of information), there must be significant progress in three major issues: Interoperability, Scalability and Usability.
- Interoperability: the option for different blockchains, centralized organizations and data sources to communicate with each other. Not just for atomic functions, such as a simple value transaction, but the option to create advanced multi chain smart contracts.
- Scalability: Currently, the IoV is being used for a very limited range of scenarios. To become more main stream, the Internet of Values needs to be usable in a lot of different scenarios such as finance, manufacturing and government management.
- Usability: while the computing power, storage capacity, and synchronous speed of the Internet of Information has been able to support most demands of information management, the Internet of Values can barely support non-complicated projects. The Internet of Values has a lot of work to do in terms of standardization, “platformization”, functional modularity, application ecology, interoperability, and anti-quantum attacks etc.
Of the above three types of bottlenecks, interoperability is the most urgent. By enhancing interoperability, we can transfer value between different blockchains, program smart contracts with different tokens, and improve scalability more easily.
However, usability is a long-term basic task, while interoperability and scalability, which have greatly hindered the development of the Internet of Values, are in need of a short-term solution and have become the two most urgent bottlenecks to be solved.
The main vision of the FUSION project is to solve the interoperability issue by establishing a platform-level public chain which can connect all kinds of values, provide complete financial functions, communicate between diverse communities and tokens, and bridge centralized and decentralized organizations to bring the Internet of Values as early as possible.
In order to achieve this vision, one must build a public chain which allows different tokens to be mapped to it. This will allow these tokens in the same chain to be used to achieve multi-token smart contracts. It will increase the interoperability of the Internet of Values by allowing different tokens from different blockchains to communicate and it will also provide interfaces with centralized organizations and off-chain data sources to communicate with the decentralized world.
How could one chain hold tokens from various blockchains?
The main key in the FUSION chain is that the private keys of the different tokens are securely controlled in a distributed fashion by a public chain. In this way, the new blockchain manages the control rights of those tokens. This means that each token (doesn’t matter from which blockchain) can be represented on the FUSION blockchain. This innovative approach allows FUSION to implement an on-chain value transfer between various tokens and provides the ability to create multi-token smart contracts.
Distributed Control Rights Management (DCRM)
DCRM is the process that hands over the control of digital assets by individuals or centralized organizations to the decentralized nodes management. The distributed generation and distributed storage of a private key ensures that no single individual can access the complete private key, which means that no single node can obtain the control of the digital assets under the state of distributed control rights management.
We call the process of generating corresponding tokens used for bookkeeping on FUSION for a managed object cryptoasset mapping. Through mapping, one token can freely interact with other mapped assets.
The distribution control rights management consists of two basic operations, Lock-in and Lock-out. The Lock-in maps the token into the FUSION chain by a list of atomic transactions. The Lock-out function allows the token to be released from the mapping and disassembles it from the distributed control rights management.
- In order to start the Lock-in request the user initiates a Lock-in request to the FUSION network by using Lock-in’s program interface in the FUSION wallet.
- The request will trigger a Lock-in smart contract on the FUSION network which will generate a new private key in a distributed manner.
- As a part of the request initialization process the Lock-in smart contact will generate a public address on the originating blockchain of the token. To complete the transition of the control rights of the token to the hands of the distributed management, the user will transfer the token to the newly generated public key.
- After the transaction is confirmed (by the original blockchain and by the FUSION blockchain) the smart contract will update the user’s FUSION account.
- Same as in the Lock-in operation, the user initiates the Lock-out operation via the FUSION program interface. The Lock-out operation will eventually transfer the user’s token into an address on the original blockchain, where the user has their private key, outside of the FUSION network.
- The request will trigger the Lock-out smart contract which will transfer the tokens from the FUSION address to a different public address outside the FUSION network.
- The transaction will be validated by the FUSION nodes according to its distributed private key. This procedure of validating a transaction with a distributed private key is called Threshold signature.
The nodes that are involved in those operations are being rewarded by the FUSION network.
Crypto Financial Smart Contract
The Crypto-financial Smart Contract (CSC) is defined as the smart contract that is used to complete a financial operation between one of multiple digital assets that were mapped on the FUSION chain by a Lock-in operation.
CryptoFinancial Functions (multi role, multi token and separation of usufructs)
The DCRM (Distributed control right management) enables the interaction among different digital assets. Therefore, the CSC (Crypto-financial smart contract) has the capability to implement much more complex functions such as multi-role, multi-token and separation of usufructs.
Multi-role refers to the ability of a cryptofinancial smart contract to support multiple different account types and at the same time to define the relationships between multiple users and multiple smart contracts.
Multi-token means that after mapping different digital assets to FUSION via the Lock-in process, the relationship between multiple different digital assets can be defined simultaneously by a smart contract on FUSION.
Separation of usufructs means that the usufructs and ownerships of digital assets can be separated. The current smart contract can only transfer tokens as a whole from one party to another party and it is not possible for one party to obtain ownership of the digital asset while the other party acquires the usufruct of the digital asset, which means the ownership and the usufruct is inseparable in traditional smart contracts. In a cryptofinancial smart contract, it is easy to define more than two user accounts or contractual accounts in one contract, and in this way, it can separately define accounts of ownership and usage and realize financial transactions such as mortgage lending between different digital assets.
Multi Triggering Mechanism
The current implementation of smart contracts is based on the transfer of ownership of digital assets because the current smart contract is triggered by a value transfer to the contract.
The FUSION implementation extends the current smart contract trigger mechanism with two essential triggers: timing triggering and event triggering. The enhanced triggering mechanism is called the multi-triggering mechanism.
The multiple triggering mechanism has the following three trigger modes:
- Transaction trigger: The active triggering mode is consistent with the current smart contract triggering mode and can be supported by all types of smart contracts.
- Timing triggering: this mode means that the smart contract can be triggered by time conditions such as a time point or length of time.
- Event triggering mode means that a smart contract will be triggered when a certain event occurs. Those events can be imported from off-chain data sources via HTTP or socks based on the standard API’s provide by third-party data sources. For example, in automated trading and quantitative trading, capturing events is very important.
Hierarchical Hybrid Consensus Mechanism (HHCM)
The Hierarchical Hybrid Consensus Mechanism (HHCM) used by FUSION is for stratifying the computational work of generating blocks and adopting a suitable consensus mechanism in different layers. HHCM introduced the concept of grouping to achieve private keys’ generation, management and parallel computing. HHCM combines the advantages of PoW and PoS to balance safety, efficiency, scale and other aspects.
The Hierarchical Structure the HHCM
The HHCM is built of two layers:
The first layer consists of virtual groups of physical nodes. The nodes of each group will jointly process one of all the transactions assigned to the group and the work among the different groups will not overlap each other. In this layer each virtual group is responsible for a distinct part of the transactions. This allows for parallel computing which can significantly increase the amount of transactions that can be processed per second.
The second layer is the block generation layer. It packs the results submitted by the first layer to form a block record on the blockchain.
Hybrid Consensus Mechanism
The so-called hybrid consensus mechanism is reflected in the block creation process:
- The nodes in the virtual groups in the first layer are elected by a POS method. Those nodes are chosen from all the nodes in the FUSION network.
- Next, in each virtual group the nodes validate transactions and smart contract, using a POS approach.
- From each virtual group one node is selected to move to the second layer, this node is called the Group Node. In the second layer, the different Group Nodes are competing with each other to publish the next block on the FUSION blockchain. This is done using a POW consensus mechanism.
Use case for the Internet of Values and FUSION blockchain
FUSION smart contracts can be thought as a trust mechanism for a certain financial agreement between peers. The smart contract can be customized upon the agreement, but once launched, it cannot be changed.
The following is an example of how the FUSION smart contracts can be used to validate a mortgage agreement between a house buyer and a bank.
Current financial system
Without the use of the trust mechanism, the system that validates and executes the mortgage agreement includes:
- Bank: The buyer’s bank account will usually need to be managed in the bank that gave the mortgage. The Bank has an internal system to validate that the loaner pays his monthly payments on time.
- Land registry office: If the buyer misses a certain amount of payments, the bank can take custody of the house, by communicating with the land registry office.
For this example, we will assume that the real estate in the country are digital assets on the government private blockchain.
On FUSION, the house’s seller will initiate a house sale smart contract (C1) and put the house smart lock’s control right into the smart contract. The owner of the smart contract will have the right to control the house’s smart lock.
C1 prescribes that anyone who sends 100 BTC into the smart contract will be the new owner of C1 and acquire control of the house.
A buyer has negotiated with a mortgage provider. They will initiate a mortgage smart contract (C2), which prescribe that:
No. 1: if the buyer sends 30 BTC to C2.
No. 2: if the mortgage provider sends 70 BTC to C2.
Then C2 will send the 100 BCT to C1 and transfer the control right of C1 to C2.
C2 also prescribes that the buyer will have the password of the house’s smart lock as long as the buyer sends in 1 BTC at the end of every month for 120 months.
If the buyer sends in 1 BTC at the end of a month, C2 will use a transaction-trigger and time-trigger to send the password of the house to the buyer’s address. Otherwise, C2 will do nothing, which means the passwords will not be sent to the house buyer.
If the buyer fails to send the BTC to C2 for three months, then C2 will let the mortgage provider, as the owner, have full control rights of the house.
However, if the 1 BTC has been sent to C2, the mortgage provider will have no right to stop the sending of passwords.
After 120 BTC has sent to C2, C2 will let the buyer become the full owner of the control rights of the house.
To conclude: With the FUSION smart contract, the financial institute that provides the loan, does not need to trust the authorities or the borrower when it signs the mortgage agreement. If the borrower fails to pay back his loan, the financial institute will receive the custody of the house automatically (upon the agreement).
Use of token
FSN will be used to pay fees on the FUSION network. Smart contracts will consume FSN in order to work. FSN use correlates to the use of ETH in the Ethereum network.
The FSN ERC-20 token is to be distributed at the end of the public sale. When the main-net is live, there will be a token swap to the native FUSION blockchain token- FSN.
Total hard cap: 65,000 ETH
Token allocation: Finite number of tokens (81.92M FSN), 25% public sale, 10% selected private investors, 10% team (vested over time), 10% angel investors, 10% community growth, 30% pow&pos, 5% reserve.
Private sale (8.19M FSN): includes chosen strategic partners, the bonus given is not to be disclosed.
Public Sale (20.48M FSN): 1 ETH=400 FSN
5% bonus given in the first 24 hours, later no bonus given. The sale is open until Feb 11th 12:00 GMT. Until then, anyone can contribute any amount of ETH to the smart contract address. When the sale ends, one receives a portion of the original ETH contributed. The amount is proportional to the amount of ETH that exceeded the hard cap.
To date, code has been written for the major components of the blockchain. The Github inventory is yet to be published.
Main-net is to launch by mid 2018.
FUSION is a project that aims to serve as the infrastructure for the Internet of Values. The ability to trade and manage bonds, currencies, land properties, content, and identities in a secure manner without the need to trust a third party is needed. The market for the IoV is huge and the project that breaks the barriers between blockchains will surely flourish. The FSN token demand will increase along with the penetration of the FUSION blockchain to the market as it is used to fuel the network.
FUSION is trying to pull off an innovative project with improvements to the blockchain technology that has yet to be seen in other projects. In order to successfully launch FUSION main-net, the team has to be highly experienced. Dejun Qian is leading on the FUSION project. As the CEO of BitSE, he has led and been involved in the successful launch in recent years of two ambitious blockchain projects – QTUM and VeChain. It seems that the team has the right experience to successfully launch FUSION. Meanwhile, the FUSION project has plenty of selected supporters and advisors with rich experience from different area and industries, especially the financial industry.
About a quarter of the total contribution amount was raised via a private sale. A bonus of an undisclosed % was given to selected early contributors. Though these contributors will probably hold onto their tokens for the FUSION project to reach at least some of its great potential, it could lead to a lower bottom price compared to ICO price when it reaches exchanges.
Token is transferable before main-net launch
The token will be transferable immediately at the end of the sale (ERC-20) token. These tokens will be swapped 1:1 for FSNs when the FUSION main-net is live ((Zilliqa also launched an ERC-20 token before main-net launch). The real use of the FSN token will only begin with the launch of the main-net which is due in mid 2018.
CryptoPotato ICO Evaluation – result
Key for the evaluation: IF = Impact Factor WA = Weighted Average
Stage of the project: Proof of concept to major components of the blockchain, main-net to launch mid 2018. Score 8.5 IF 1 WA 1.72
Project potential: We think that the Blockchain potential is hidden in the Internet of Values. FUSION is aiming to serve as the infrastructure for the IoV Score 9.5 IF 3 WA 1.29
Community and Media: ~7,100 Telegram members, ~145 Facebook followers, ~1,700 Tweeter followers. Project launched to the public only two weeks ago (fast community growth). Score 8 IF 2 WA 0.73
Token use: FSN is used to fuel smart contracts on the FUSION blockchain (Same use as ETH for the ETH blockchain). Score 9.5 IF 3 WA 1.29
ICO: Cap – 65,000ETH, undisclosed % bonus given to selected early participants, innovative public sale mechanism. Score 8 IF 5 WA 1.7
Whitepaper: Highly technical white paper. Score 9 IF 1 WA 0.43
Backend and Technology: Innovative blockchain – multi-token smart contracts, parallel computing, multiple triggering mechanism, and off-chain data support. Score 9.5 IF 2 WA 0.72