The United Arab Emirates (UAE) is reportedly leading the MENA region’s Fintech sector with a projected valuation of around $2.5 billion by 2022 (which is still not significant compared to international standards).

Regional and multinational financial services providers have been launching digital platforms in order to improve customer experiences (UX), lower operational costs, and meet appropriate data regulations (and other guidelines). According to Clifford Chance, the MENA Fintech market is on track to reach a $2.5 billion valuation within the next two years.

Supported by the introduction of innovative Fintech projects (including the Emirates Blockchain Strategy 2021 and Dubai Blockchain Strategy), the UAE has been focused on adopting the latest technologies to expand its economy.

The Emirates Blockchain Strategy aims to move around half or 50% of all government interactions to blockchain or distributed ledger tech (DLT) platforms by 2021. Meanwhile, the Dubai Blockchain Strategy aims to make Dubai one of the first global cities to run many of its key business processes via blockchain (although Chinese cities like Shanghai and Shenzhen may have already taken the lead in this area, especially when it comes to launching a central bank digital currency or CBDC and the innovative Blockchain Service Network or BSN).

Beyond the UAE’s government-backed DLT projects, the UAE’s Fintech industry is now focused on investing in emerging digital platforms, especially those that focus on blockchain-based smart contract solutions.

Khurram Shroff, Chairman of Dubai-based IBC Group, recently confirmed that his firm would invest $10 million — or a stake of approximately 20,000 Ethereum (ETH) — in the planned launch of Ethereum 2.0, a major system-wide upgrade to Ethereum, the world’s largest blockchain platform for developing smart contract based decentralized applications (dApps).

The investment will reportedly be finalized through a partnership with Canada’s CanETH, an “institutional-grade” staking service for Ethereum holders. CanETH aims to support organizations that are interested in taking part in the Ethereum 2.0 launch and ongoing development efforts.

Khurram Shroff remarked:

“We are very excited by the ‘Proof of Stake’ concept proposed for the Ethereum 2.0 smart contracts and are locking up 20,000 eth which is a one way trip till phase 2, this lockup shows our confidence in ETH2 and dedication to the Beacon Chain. The greener ‘Proof of Work’ model being introduced in the version 2.0 makes it an even more attractive investment.”

It’s worth noting that proof of stake is not really the “greener” proof of work model because they both operate using fundamentally different algorithms. However, the current version of Ethereum, which uses proof of work, has not been able to scale effectively. Ethereum competitors like EOS and Cardano have been deployed using variations of the delegated proof of stake consensus mechanism which has been able to process more transactions but may lead to security problems.

Vitalik Buterin, one of the main founders of Ethereum, has said that Ethereum 2.0 could go live by December 1, 2020. But this would only be the “Genesis” launch, which will need around 16,384 transaction validators and will require a stake of 524,288 ether (or more than $260 million at current prices) to be locked into the contract. This is required before Ethereum 2.0 can be launched in a secure manner.

CanETH Pool is a Canadian staking service that has been co-founded by Dwain Pereira and Noman Qureshi.

CanETH aims to offer a simple way for average users to get more actively involved with the Ethereum 2.0 development.

Qureshi confirmed:

“Our goal is to make crypto more accessible to the public. To commence the staking process, Buterin’s ‘VB2’ address has sent 100 transactions totaling 3,200 units, currently worth around $1.4 million. Khurram Shroff’s ‘CanETH’ address is sending three tranches totaling 21,984 units for a total of 687 validators, currently valued at around $10 million.”

Dwain Pereira of CanETH Pool noted:

“The Proof of Work Blockchain model uses more electricity than some countries. These exorbitant energy costs are eventually paid using fiat currencies, which creates a downward pressure on value of the cryptocurrency. So the Proof of Stake model will be both energy efficient and more lucrative for stakers.”

Shroff added:

“Blockchain will transform virtually all transactions. We believe the decentralized ‘distributed consensus’ model of Ethereum 2.0 will unlock multiple avenues for growth and innovation. With environmental concerns associated with previous models of Blockchain addressed, their application will become far more widespread.”

While Ethereum 2.0 seems promising, it has experienced many technical challenges during the past few years. Ethereum co-founder Vitalik Buterin had revealed back in 2018 how he had made many mistakes while trying to develop scalability solutions for Ethereum. Buterin had gone into great detail regarding the complex nature of blockchain-based consensus algorithms.

Ethereum 2.0 is a highly ambitious project that will aim to gradually transition from proof of work to proof of stake based consensus, which has never been attempted on a DLT network as large as Ethereum.

(Excerpt) Read more Here | 2020-11-21 14:33:21
Image credit: source

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