BIOKRIPT

Next Generation Cryptocurrency Exchange

INTRODUCTION

The whole crypto revolution started with desire for decentralization, however more than 99% of all cryptocurrency transactions still happen on centralized exchanges.

Current capitalization of the cryptocurrency market is around $1.35 trillion(May 16, 2022) and down from its peak of more than $3 trillion in November 2021. Wall Street analysts and market leaders are predicting steady growth of this market with some figures reaching up to 10 trillion in the next few years.

Islamic finance sector was $2.88 trillion in 2020(Global Economic Report) and is expected to increase to $3.69 trillion by 2024.

Centralized crypto-to-crypto exchange model is inefficient and open to market manipulation. A report by Blockchain Transparency indicates that 88% of the top 25 crypto exchanges are manipulating their trading volume by using a technique called wash trading in order to boost their rankings in CoinMarketCap.

The present model of cryptocurrency exchanges is also prone to hacks as this industry is rampant with scams and fraud. Some of the largest exchanges have a history of security breaches and lost funds. Inadequate security or infrastructure was the main reason for those hacks. As an example, the hacks of Coincheck and Coinrail, which happened in 2018 and cost users hundreds of millions of dollars, happened because of weak security practices where they kept a large amount of cryptocurrency in their hot wallet rather than offline. On top of that they did not have expertise to properly secure their exchange.

Hackers use various techniques from social engineering to more complex trojan deployments, using tools like AZORult and Pony Formgrabber. According to researchers, the cryptocurrency exchanges are such an easy target because of their disregard for information security and underestimating the capabilities of hackers. The main reason is failure to use two-factor-authentication as well as failure to use complex and unique passwords. Researcher had found that one in five users have a password that is shorter than 8 characters — a very weak security practice considering that a brute force attack can easily crack those passwords.

Another example of centralized exchange inefficiency is the disaster that happened with Canadian exchange Qaudriga. All of the funds, including the private keys of the wallets where the cryptocurrency was stored was controlled by Gerald Cotton, the founder of the exchange, and after he mysteriously died, all that crypto was gone with him. According to Ontario Securities Commission, the collapse of Quadriga had cost at least $169 million Canadian to 76,000 investors. With Biokript, that could never happen since you are holding your own private keys and have full control of your funds.

On April 21, 2021, Turkish cryptocurrency exchange Thodex abruptly halted trading and withdrawals, leaving 400,000 traders without access to their crypto. In the end, its CEO, Faruk Fatih Ozer fled Turkey and scammed his customer for $2 billion.

We had also witnessed the disaster that happened with Luna and UST. As Luna and UST kept crashing, investors tried to get their crypto in order to sell it, but they were prevented by the centralized platforms who held it. Those investors never truly had the control of their funds and they nearly lost everything. With Biokript, you control your own private keys and you are always in full control of your crypto. If you are not holding your keys, you are not holding your crypto.

Another problem with today’s cryptocurrency exchanges is poor customer support. There are problems with unanswered support tickets, login issues, long withdrawal times, and deposits not credited. There are many stories with funds locked for months while there is no one to help.

Because of the regulatory uncertainty, majority of the exchanges are not regulated by any government, and because of that many people are reluctant to interact with cryptocurrency exchanges.

Very few exchanges offer more than one Fiat currency. Because of that, users are not able to use one exchange for all their needs and they would need to use other exchanges to fulfill their needs.

Nearly half of the investors are reluctant to invest in crypto because of lack of educational resources. Provoke Insights, an independent market research firm found that education is the key obstacle to investors from buying cryptocurrencies. There is a vast amount of information, from scammers to respectable professionals, and sifting through all that could be a challenge.

Cryptocurrency investing is a complex field and a learning curve could be very steep. It is constantly changing and keeping up with those changes is a challenge for even seasoned crypto investors.

And lastly, the risk associated with crypto market is well known and it is one of the main reasons why many people stay away from it.

Decentralized exchanges or DEXs have their own set of problems. They don’t have a specific KYC or AML policy set up so these deficiencies create opportunities for bad actors to scam innocent investors. DEXs are well known for scam projects since anyone can deploy a malicious smart contract which could be a rug pull, honey pot, or a straight up scam. And since there is no central authority behind DEXs, scammed investors don’t have any recourse. Moreover, with new crypto regulations coming up in Europe and US, it will be very hard to operate a DEX.

BIOKRIPT SOLUTIONS

Our Shariah compliant business model will tackle all of the above stated problems. Biokript token will eliminate manipulating trading volume since Biokript holders will receive trading revenues and it will not be sustainable to do wash trading by basically giving free money to token holders. Moreover, since all of Biokript’s transactions are done on blockchain, everything Is open for audit and review.

We will also employ top notch security for our exchange where all our files will be encrypted with latest encryption technology. Our exchange will be non-custodial, which means users will completely control their funds and the incidents such as above stated Quadriga or Thodex can never happen. Users will have multiple two-factor authentication options and before the withdrawal, our system will also notify our users about that withdrawal so if anything is suspicious, the user can block that withdrawal before it happens. Our system will also automatically block withdrawals after changing account data because changing email address or phone number is the typical behavior of a hacker.

We will offer top notch customer service, including a video-call support for faster authentication.

And we will offer many fiat currencies including BAM, EUR, and USD, along with many payment options such as credit card, wire, and ACH transfers.

To be fully compliant with the current laws we will require all users using fiat to go through full KYC/AML.

We will also post relevant educational information so our traders and community can stay up to date about the crypto industry.

Because of Shariah compliance, we will offer investment opportunities with a minimal risk and eliminate risky trades such as futures and leverage trading.

Biokript exchange is built with security and customer support while at the same time giving the users full control of their funds. 2 Factor Authentication will be a requirement for all users in order to ensure safety of those accounts. To fully secure all accounts, 100% of users’ funds will be locked in a smart contract which is unhackable unlike centralized exchanges. User’s IP address will be whitelisted and if the account is accessed from a different IP address, the user will immediately get notified.

Biokript’s customer service will be available 24 hours a day, 7 days a week and users will be able to contact our representatives through phone calls or live chat system for immediate help.

Biokript’s goal is to create a community of people willing to educate themselves and are open to help others. We will do that through our social media connections and our affiliate program where you can invite friends to trade on our platform and receive 25% of their trading fee.

Biokript will initially offer 3 fiat currencies for deposits and withdrawals: USD, EURO, and BAM with many more coming in the near future. All of our cryptocurrencies will also be paired with those currencies.

Since we are fully compliant crypto exchange, all of our users will have to go through KYC/AML from the very start if they are trading with fiat currencies. We’ll implement this process right after the user registers his or her account.

BIOKRIPT TOKEN DISTRIBUTION

To fund the start-up of Biokript exchange investors will be offered Biokript tokens. In return, the holders of BKPT will get the opportunity to receive a percentage of trading fees, listing fees, and profit through price appreciation of Biokript token.

Profit split will be 50/50 between the company and the token holders and according to Islamic Mudarabah principle. All the profits will be distributed to investors based on the number of tokens they are holding.

As an example, if we had weekly trading revenues of $200,000 and if we had a total of 500,000,000 tokens in circulation, our algorithm would automatiacally divide 80,000 with 500,000,000 so for each Biokript token held in the investor’s wallet, investor would get $0.00016 worth of Biokript tokens.(The number is 80,000 and not 200,000, because 40% is distributed to investors as profit, 40% is kept for the company, 10% for the token burn, 5% for the reserve fund, and 5% for the security fund). So if you had 10,000 Biokript tokens in your wallet (worth about $50 at the initial price),investor would earn $1.60 every week — or about 3.2% return per week; 12.8%/month or 153.6%/year.

BIOKRIPT TOKEN

CONCLUSION

The basic principles of economics dictate that a product with a rising demand and a declining supply will go up overtime. Our unique business model will amplify that fact in the following way:

Our next generation trading platform along with our profit distribution will create a rising demand.
Our token burn, which is tied to price appreciation will create a declining supply.
Our Shariah-compliant trading platform will attract a huge number of traders from the Islamic world who are looking for Shariah-compliant investments.
All of those systems working together will create a price growth.

History bears witness that centralized cryptocurrency exchanges are inefficient and unsecure. Biggest crypto exchanges are still vulnerable to hackers, and they will continue to be their biggest target. Even if hackers are not the problem, the custody of billions of dollarsis entrusted in the hands of a few people and that itself could be a disaster.

If you think that Quadriga could not happen to Binance or Coinbase you are greatly mistaken. Coinbase already stated that in the case of bankruptcy, users’ funds are not secured. One plane crash, the war, or any other unforeseen disaster could kill everyone who holds the private keys of the exchange.

The future is in decentralization and giving the people the control over their own wealth is the way to go. Biokript will be the secure solution to self-custody of crypto while giving the traders the option to trade with the ease and efficiency of a centralized platform.