This article was originally published on August 14th 2021

In the ever-diversifying world of cryptocurrency, Sifchain is one of the new kids on the block aiming to make a real impact. Describing itself as “the world’s first omni-chain decentralized exchange” (Sifchain, Sifchain – The World’s First Omni-Chain Decentralized Exchange, 2021), Sifchain is one of several new platforms aiming to improve transfers of data, tokens, and other assets between blockchains.

The founder and lead developer of Sifchain is Jazear Brooks, a computer science graduate from Yale who is the former lead architect of Thorchain, upon which Sifchain is modeled (AroundTheCoin, 2021). Combining his engineering and economics experience, Brooks was able to take the world of blockchains by storm, developing new crypto-economic models and trading strategies (AroundTheCoin, 2021). Brooks was also part of the team that developed Cosmos’ official Cosmos <> Ethereum bridge for the Interchain Foundation, and the Polkadot <> Ethereum bridge for Web 3, making him an expert in cross-chain transactions (ShinChainICO/IEOCommunity, 2021). Sifchain certainly seems in safe hands under Brooks’ leadership!

Background for Fundamental Analysis

Transferring assets or tokens is something that people want to do millions of times every day. In many cases, the best way of achieving this is through decentralized exchanges, which offer greater reliability, security, and availability than centralized exchanges. However, one of the biggest limitations of decentralized exchanges, in their current form, is their limiting nature, which does not allow investors to reach a large number of blockchain ecosystems. Decentralized exchanges can also be slow and charge big fees because the underlying blockchain is limited in its performance capabilities (Sifchain, Sifchain: The Omni-Chain Decentralized Cryptocurrency Exchange Lite Paper, 2021).

To overcome this, Sifchain was created. Sifchain was built with the Cosmos SDK, an open-source framework for building multi-asset public Proof-of-Stake (PoS) blockchains, like the Cosmos Hub (CosmosSDK, 2021), and is capable of processing many more transactions per second than Ethereum, a popular and largely successful platform, though clearly with some limitations that Sifchain hopes to improve upon (Sifchain, Sifchain: The Omni-Chain Decentralized Cryptocurrency Exchange Lite Paper, 2021). Since Sifchain is a Cosmos SDK blockchain, it uses the Tendermint consensus algorithm (Tendermint, 2021). By using Thorchain as the basis for the platform, and pegged tokens to support transfers between a large range of blockchains, Sifchain can support cross-chain transactions for some of the top blockchains, including Bitcoin and Polkadot (Sifchain, Sifchain: The Omni-Chain Decentralized Cryptocurrency Exchange Lite Paper, 2021).

What will set Sifchain apart from other inter-blockchain platforms is its proprietary Inter-Blockchain Communication Protocol (IBC). An upgrade to the blockchain is currently being made to incorporate the IBC, which will boost the accessibility and functionality of the Sifchain platform (@jk6276, LeoFinance, 2021). Once the IBC is activated, Sifchain will be able to add tokens from other IBC chains, including ATOM, CRO, AKT, and XPRT, which is something there is great support for within the community (@jk6276, LeoFinance, 2021). By enabling these transactions, which represent the majority of all cryptocurrency trading volume, Sifchain will be a highly valuable platform, which will also support an on-chain governance process, and develop new pegged tokens for new blockchains as required (Sifchain, Sifchain: The Omni-Chain Decentralized Cryptocurrency Exchange Lite Paper, 2021). All in all, Sifchain promises a lot. Let’s take a look at some of its project metrics to assess how reasonable the hype around this platform is.

Project Metrics

Technology

Sifchain is powered by Cosmos SDK, a dual-layer network for the cross-chain transmission of data, tokens, and other assets (AsiaCryptoToday, 2020). This existing technology is allowing the Sifchain team to provide a way to work across some of the biggest blockchains, including Bitcoin, Ethereum, and Polkadot, to enable the efficient transfer of value (AsiaCryptoToday, 2020).

Roadmap

In the first quarter of 2021, the token sale, BetaNet launch, and Voting & Governance stages were all completed (Sifchain, Sifchain – The World’s First Omni-Chain Decentralized Exchange, 2021). Through Q2 and Q3 of 2021, further steps will be taken, including completing Sifchain’s proprietary Inter-Blockchain Communication Protocol (IBC) which will set Sifchain apart from all other inter-blockchain platforms, Omni EVM Bridge, and Margin Trading (Sifchain, Sifchain – The World’s First Omni-Chain Decentralized Exchange, 2021).

Supply and Distribution of Tokens

Sifchain will obtain liquidity through coordinated deployments of capital from multiple cryptocurrencies through Decentralized Autonomous Organizations (DAOs). A hybrid order book, combining a mix of liquidity pools and full order book functionality will enable traders to place a range of trading functions that they are familiar with, including limit orders (AsiaCryptoToday, 2020). The Sifchain team expects to offer 10 million ROWAN in a global bucket distributed according to a Token Geyser model (Sif, 2021). First developed by the Ampleforth team, the Token Geyser is a smart contract on Ethereum that dispenses additional token rewards to liquidity providers on Decentralized Exchanges (Fiebiger, 2020). Once the IBC launches, delegators and validators will be rewarded for their capital with an APR between 7 and 20% thanks to Cosmos Hib’s inflationary block reward model (Sif, 2021).

Team

Sifchain’s team consists of operators, business developers, and marketers with experience as legal experts, financial advisors, and financial engineering experts. Their experience at a major Web 2.0 VC, a Tier 1 Silicon Valley law team, and a major cryptocurrency exchange. As a team, they have a lot of experience in cryptocurrency and have links to the US, EU, and Asian markets (Sifchain, Sifchain – The World’s First Omni-Chain Decentralized Exchange, 2021). Jazear Brooks, as mentioned previously, leads this highly experienced and capable team.

Strategic Investors

Sifchain has 14 publicised partners and investors, including NGC Ventures, one of the world’s largest investors in blockchain and distributed ledger technologies. NGC Ventures has been a key contributor to several leading blockchain projects (Ventures, 2021). Another strategic investor in Sifchain is TRG Capital, which describes itself as “a digital asset fund focused on investment opportunities that will spark the internet’s next paradigm shift” (TRGC, 2021). Their involvement in Sifchain certainly points to the revolutionary potential they believe this platform holds. Other investors and partners in Sifchain include Alameda Research, Bitscale Capital, Mechanism Capital, and AU21 Capital. Sifchain’s strategic investors and partners cover various global markets, emphasising Sifchain’s global reach.

Tokenomics

The native token of Sifchain is called Rowan, a non-refundable utility token exchanged solely between participants of Sifchain. Owning ROWAN does not give a person any rights except to enable them to use and interact within Sifchain (Sifchain, Sifchain: The Omni-Chain Decentralized Cryptocurrency Exchange Lite Paper, 2021). Eventually, all changes to the protocol will be voted on by ROWAN-holders. As such, it is ROWAN-holders who will drive the development of Sifchain, who will vote on the features of Sifchain, but not the operation and management of the Foundation.

eROWAN is the equivalent version of ROWAN on the Ethereum network, and users can transfer ROWAN and eROWAN between the Ethereum and Sifchain networks using Peggy, part of the Ethereum <> Cosmos bridge (Sifchain, FAQ, 2021). The Ethererum based eROWAN token will eventually be phased out by the native Cosmos-based ROWAN token.

Market Capitalization

Estimates as to the fully diluted market cap of Sifchain put Sifchain’s potential value at $175,245,941 (CoinMarketCap, 2021). Currently, the market cap stands at just above $31 million, with an estimated circulating supply of 83,187,101.94 ROWAN. This is likely to increase rapidly in the coming months, with approximately 10 million ROWAN in a global bucket to be distributed according to a Token Geyser model (Sif, 2021).

The Future of Sifchain

As of Friday 15th August 2021, ROWAN is valued at $0.188, having reached an all-time high at $1.41 in March 2021. After this ATH, the value of Sifchain’s token dropped rapidly due to the overall trend in the crypto market, and the price has remained fairly stable since June 2021 (CoinMarketCap, 2021). However, as the markets now recovering, ROWAN is expected to surpass its previous ATH based on the solid fundamentals behind Sifchain.

Sifchain’s proprietary Inter-Blockchain Communication Protocol (IBC), designed to protect the platform against front-running and chain-spamming attacks, was recently tested to see what success it would have with transfers between Sifchain’s internal testnet and Cosmos Hub’s testnet. These tests were completed with a 100% success rate (Sif, 2021).

Experts expect it will take a long time to get Sifchain working effectively because it is a highly complex and ambitious project (AsiaCryptoToday, 2020).

Sifchain markets itself as the future of DeFi (Decentralized Finance), providing enhanced security by replacing centralized financial services with autonomous organizations that allow individuals to essentially do everything a bank supports (e.g., borrow, lend, earn interest, and trade assets), but without the paperwork or a third party (Coinbase, 2021). There is a lot of excitement about Sifchain at the moment – industry experts recognise the talent and experience of the team creating it, and therefore the potential of the Sifchain platform to make radical changes to the crypto world and the wider world. While other platforms have endeavoured to propel DeFi forward, Sifchain may be the most advanced platform in this regard yet.

References

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AroundTheCoin. (2021, January 22). Episode 217: Jazear Brooks, Founder and Lead Developer of Sifchain. Retrieved from Around the Coin: https://aroundthecoin.com/podcast/episode-217-jazear-brooks-founder-and-lead-developer-of-sifchain/

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