In this edition, we will explain how Eternal Wallet’s main function, the pool, acts as the heart of the entire ecosystem.
When users exchange currency within Eternal Wallet, this exchange is conducted by passing through a system called “The Pool”.
Initially, fiat currency will exist within the pool, and the pool will hold the same amount regardless of currency. When an exchange has been passed through the pool, the amount will increase or decrease accordingly.
⑥ 1) Fiat Currency within the pool
The fiat currency within the pool will initially come from the deposits made into bank accounts registered by Atom Solutions, in their respective countries.
When an incline/imbalance occurs with the exchanged currency, there will be currency amounts that increase, and as well as decrease, within the pool.
If the fiat currency within the pool increases, this means that someone deposited fiat currency into Eternal Wallet, and exchanged using that fiat currency. It does not mean the fiat currency appeared out of thin air.
On the opposite, if the fiat currency within the pool decreases, this means that someone exchanged using Eternal Wallet, resulting in a decrease of fiat currency. However, at this point, it is only an exchange, and the fiat currency still resides within the user’s Eternal Wallet. Even if the pool’s balance decreases, the fiat currency balance within the Eternal Wallet system will not decrease, and the fiat currency will not suddenly disappear. After this, if someone were to cash-out the exchanged currency from Eternal Wallet, the fiat currency balance within the Eternal Wallet system will finally decrease.
⑥ 2) Solving the issues of traditional overseas remittance companies
We have explained the issue of traditional overseas remittance companies, where the barrier for affordable overseas remittance is made when there is an imbalance between the countries conducting remittance. This imbalance eventually leads to the necessity of overseas remittance made by banking systems.
The issue has proved to have no solutions until now because it is impossible to compel users into making overseas remittances against their will.
Here at Atom Solutions, we have solved this problem by introducing the concept of lending out TTT.
⑦ Handling Fee when exchanging foreign currency
Conducting foreign currency exchange within Eternal Wallet will be applied using the rate of Telegraphic Transfer Middle (TTM), plus a 0.5% handling fee. Using this rate to exchange, and conduct remittance through Eternal Wallet, the world’s most affordable overseas remittance is achieved.
The handling fees paid and accrued when users conduct currency exchange becomes the capital for the lending feature.
⑧ Lending of The Transfer Token (TTT)
TTT holders can lend out their TTT to the pool.
The lenders will receive a partial amount of the fees incurred when other users conduct currency exchange using Eternal Wallet.
Users are able to reap the fees by lending out their TTT, giving an initiative to lending.
The user does not lend out to a specific individual but into the pool. This means that the TTT will not disappear or expire and the lent out TTT will always be returned.
The TTT lent out into the pool will differ accordingly to users’ home country or residence.
For example, when a user in the Philippines lends out TTT, they will be lending out into the PHP pool. The dividend rates will depend on how much the currency is subject to exchanging and how much handling fees were paid, so each country’s pool will deliver different dividend rates. Users who do not live or reside in a nation which is registered with the Eternal Wallet cannot lend out into the pool.
⑨ Opportunity for arbitrage due to the divergence in dividend rates
The dividend rates are differing depends on the country of residence, which is more beneficial for users from countries of high-return dividends.
Therefore, users who reside in high-return dividend rate countries would be encouraged to purchase TTT to participate in the lending, while users from low-return countries would not purchase TTT due to there being less merit to lend out TTT.
With this theory, the price of TTT in countries with high-return dividend rates will become larger than countries of low-return that results in creating a discrepancy in the price of TTT accordingly.
As a result of the price discrepancy for the same TTT, there is a profit earning opportunity via arbitrage trading.
For example, if TTT’s price was 100 in fiat currency A, and 110 in fiat currency B, a user from country A could purchase one TTT for 100 fiat currency A, then sell the TTT within the Eternal Wallet for fiat currency B. This results in a profit of 10. However, when conducting arbitrage, it is necessary to exchange back into the user’s own national currency, meaning that it will be a need to exchange the 110 fiat currency B back into fiat currency A. By exchanging from B to A, fiat currency B enters the pool, while fiat currency A is taken out of the pool.
⑩Volatility and equalization of dividend rates
Dividend rates will be higher with fiat currencies which have a lower pool balance. In the above arbitrage trading, eventually, a currency exchange was made from the lower-pool balance fiat currency B to the higher-pool balance fiat currency A.
With this currency exchange, the balance of the currency with the lower pool balance increases, while that of the balance of the currency of the higher pool balance decreases. Therefore, this means that the balance inequality between the two currencies is gradually erased.
With this, the necessity for smoothing out the divide in balance becomes unnecessary, and the issue of overseas remittance as pointed out in ⑥has been successfully solved.
⑪ Optimization of fiat currencies within the pool
User A, who desires to lend out TTT into the pool, will purchase TTTwithin Eternal Wallet with their national fiat currency.
That TTT is the one sold by User B. Therefore, the fiat currency used by User A to purchase the TTT goes to User B. This means that it is not possible to use the fiat currency User A spent as capital for the pool. The fiat currency within the pool will only increase during exchange purposes, or when our company deposits the funds of the issued amount of fiat currency into the bank.
⑫ Profits/losses made by the increase/decrease of fiat currency within the pool
When a certain currency’s balance within the pool decreases, this means another currency’s balance increased. Our company has lowered the risk of losses being incurred by the increase/decrease of fiat currency within the pool, by managing the total balance within the entire pool instead of each currency pool.
In the next edition, we will look into another vital component of Eternal Wallet, The Transfer Token (TTT).