Updated: Sep 4
In retrospect, it was inevitable. The signs were there all the way back in December 2019 when we first discovered Ferrum. At a one million-dollar market cap they were sizeably smaller than they are today, but so were we! The market was cold and the names of freshly buried projects filled the obits. Yet one project was alive and well!
“Cryptocurrencies & Block-chain technology are at the forefront of the investing world”
At the very tip of the forefront, aptly named “the Vanguard”, which comprises of the investors, entrepreneurs and enthusiasts who are willing to lead the way in the discovery of new technology, developments, ideas and innovations.
We call ourselves, "The Gem Hunters”
We rarely get an opportunity to tell our story, because we have been so busy living that story! But we have to stop to acknowledge at some point the people and projects who have had such an impact on our story, that at some point it actually needs to be told! The following article is an account of a project and team we at The Gem Hunters have prided ourselves on supporting over the years. A project that has changed lives within our community, within all communities who had invested their time and money.
Every story has a beginning, and Ferrum’s starts some time in 2017. Nearly a decade after Satoshi Nakamoto’s whitepaper birthed what would become one of the most disruptive innovations in modern history, Ian Friend and Naiem Yeganeh began to notice problems emerging in the growing crypto space. They saw that increasing centralization on big exchanges and a lack of interoperability had created an environment that was a far cry from the decentralized and democratized financial system that the crypto revolution had promised. And they saw that existing solutions would be unable to solve this problem.
Entering the crypto world in 2017 also meant that Friend and Yaganeh were, in Friend’s own words, “late to the party”. But as outsiders, the pair had a unique perspective through which they were able to identify the core issues with the system and begin working on solutions. Naiem, a genius programmer who many have described as a “magician” with code, quickly began working on the first version of what would become Ferrum. The focus was to create a network that was fast, cheap and interoperable, all while maintaining simplicity for users and developers – by no means an easy task. Yet by the time Friend and Yaganeh met in-person for the first time, the Ferrum testnet was already able to process BTC to ETH transactions in milliseconds and at a negligible cost.
This achievement should not be understated. The Bitcoin network, the largest cryptocurrency by far, takes around 10 minutes to process a single transaction, and about an hour before it can be safely considered ‘confirmed’. Ethereum, the second largest, doesn’t fare much better: transactions can take anywhere from around 5 minutes to an hour to process, and have, at times, cost well over $100. For Ferrum to be able to process these transactions on its network nearly instantaneously and for near-zero fees is remarkable.
Adding to the problems of traditional blockchains is the fact that they require an incredible amount of energy to maintain. We’ve all probably heard about how bad Bitcoin is for the environment: this is because there are hundreds of thousands of ‘miners’ competing to validate transactions. It’s estimated that the amount of energy required to process just one transaction on the Bitcoin network could power a small house for nearly two months.
Part of Ferrum’s success has been their novel approach to this problem. Instead of using a blockchain, the Ferrum network instead uses a Distributed Acrylic Graph (DAG) model for its transaction ledger. No blocks means no miners, and no miners means no fees (and no astronomical electricity bills). This revolutionary idea is built on the principle that anyone who makes a transaction needs to validate others. If Sally wants to send James some $FRM, she makes the request, validates some other transactions, and waits for someone to do the same to hers. Because the fees are negligible, and because everyone in the network is a validator, this process is incredibly fast.
A ‘blockchain without blocks’ seems like a wild idea, and truly it is. Other major networks using a DAG model include IOTA and Nano, but outside of these players the technology is still relatively obscure. And this is why Ferrum takes more points for their ingenuity: where other blockchains are struggling to retrofit scaling solutions to deal with costs and speed, Ferrum’s embrace of the cutting-edge in decentralized technologies has allowed it to achieve what most other decentralised FinTech players have only dreamed of.
A True Gem
Finding crypto gems is not as simple as it seems. Those who have entered crypto recently (i.e. this 2020-21 bull run) probably see money flying around everywhere, with the only requirement to achieve a $10 million plus market cap being to copy some code and name your coin after your favourite food. At best many of these projects lack longevity, and once the hype is over and the bears return they’ll likely drop in value. But at worst, you might wake up one morning to find liquidity drained from exchanges, admins silent on Telegram and your investment gone.
A true gem will have a low market cap, but strong potential for growth. Finding them takes time and experience, and this is what The Gem Hunters brings to the board. Our recommendations are backed by detailed research into the fundamentals of a project: its market cap, the industry its targeting, the usecase, the team and its ability to deliver results.
When we first covered Ferrum in December 2019, we gave it a very strong recommendation. This was a project with a market cap under $1 million which had already launched a product with real users and was delivering on technology that many other projects with larger market caps were only promising. At the time of our coverage, Ferrum had: a functioning ERC20 – BEP2 bridge, linking the Ethereum and Binance chains; the MVP launch of the UniFyre wallet, which would allow P2P transactions and staking, all from an easy-to-use app; and Kudi Exchange, a payments gateway and fiat on-ramp in Nigeria that was growing its user base every single day. A low-fee P2P exchange that works on both the Ethereum and Binance chains would be enough to warrant some attention by itself, but a fully operational payments system, with real users, in a country with one of the highest rates of crypto adoption in the world? To us, Ferrum seemed incredibly undervalued.
On May 28, 2020, we took another look at Ferrum and upgraded our assessment to ‘Exceptional’. At this time the market cap had increased to around $2 million, but in our eyes it was still, perhaps, the investment of a lifetime. Our assessment of Ferrum was based on a number of key strengths, which are just as true today as they were then.
First, Ferrum’s DAG-based, interoperable network would allow payments in nearly any currency, both fiat and crypto, instantly and for a near-zero fee. This is an incredibly attractive proposal for FinTech companies looking for a network to build on, and with proof-of-concept projects like Kudi Exchange and the UniFyre wallet already live, Ferrum was a league ahead of many competitors promising the same thing.
The utility of the FRM token also made it attractive from a tokenomics perspective. A negligible amount of FRM needs to be attached to every transaction, and rather than going into a rewards pool or to miners, it is instead burnt (remember, there are no miners). This applies deflationary pressure on the token, which would in turn drive prices higher as its userbase grew. The FRM token could also be used for staking on the UniFyre wallet, which provided extra incentive for holders to remove tokens from circulation.
The UniFyre wallet was also factored into our recommendations, with revolutionary features that abled simple accessibility anywhere. For example, the wallet’s Link Drop technology would make it easy to send and request funds from anyone, removing the need to transact with long wallet addresses which could be miscopied or confused. Users would also be able to buy crypto with fiat directly from the app, providing even more utility as a low-cost fiat on-ramp.
Perhaps one of the most overlooked, yet absolutely crucial factors we considered was the team. Ferrum had been built by a group of well-respected innovators who had a track record of delivering on results. In Friend’s own words, they “recognized early on that revenue streams, working products, and real users are absolutely critical in order to succeed long-term”, and so Ferrum made a point of delivering key milestones and ensuring they had a solid base of users. Even today, there are coins with equal or greater market caps that do not have any actual users.
Since that first review on the 23rd of December, 2019, Ferrum has not only delivered on key points of its roadmap, but has also grown to deliver even more features for users and investors. For instance, Operation Iron Mountain is a major push to further increase Ferrum’s profile and standing prior to their listing “on a major exchange”. Us, the humble public, still need to guess what exchange this will be, but listings like this normally mean only one thing for price.
The success of the UniFyre wallet has also opened a new door for Ferrum and its users: staking-as-a-service. In simple terms, certain tokens held on the UniFyre wallet can be added to staking pools, allowing users to earn rewards without having to go through the complicated and often expensive process of creating their own staking node. With staking-as-a-service, even a small bag holder can make their investment work harder for them.
Ferrum has also recently launched Ferrum Advisory Services (FAS) and The Foundry, Ferrum’s own incubator and launchpad. For the team this new direction was “unsurprising”, considering the number of projects that approach them “for advice and support”. FAS has supported a number of high-profile launches recently, and FRM holders are given access to presale allocations relative to their holdings.
But the real reason why we’re still so excited about Ferrum is because they’re changing lives. From the unbanked in Africa, who are finally able to take control of their financial security, through to the little investors who bought FRM when we recommended and who have, since then, seen returns of over 8,000%: these are the stories that mean so much more than just money.
First Kudi, and banking the unbanked
Globally, 1.7 billion adults are unbanked. As of 2017, roughly half of these people live in just seven economies. Enhancing Financial Innovation and Access (EFInA) reported in 2018 that in Nigeria, out of the total 99.6 million adult Nigerians, 36.6 million were without a bank.
Having fair access to banking plays a critical role in reducing poverty and promoting economic growth, yet in Nigeria there was a nexus of confluent issues at the heart of a deficit that had left all traditional financial solutions dead in the water.
There is an air of distrust of banks among the Nigerian people, and understandably so. It was found that in 2018 alone, 38.93 billion Naria (100 million USD) was stolen from Nigerians through various dimensions of electronic bank fraud. Add to this a maze of stringent restrictions and entry requirements and you end up with a disenfranchised population who seem to typically place more faith in their traditional systems for value transfer and storage.
“Banks always come up with requirements that mean we can’t access loans, whereas these guys that do Ajo come to us and encourage us to save to have enough money to support our business. I will rather use the Ajo people than the banks.”
This is Emmanuel Sunday, a grocery store owner from Igbokoda Ilaje in the state of Ondo. The Ajo he refers to is a communal saving scheme wherein community chosen coordinators collect a fixed number of Naira from their respective groups every month. For example, in a group of twelve where each member agrees to contribute ₦100,000 monthly, the total ₦12,000,000 will rotate through to a different member each month. This method has allowed many Nigerians to purchase land or start and invest in businesses while avoiding associated holding risks and allowing them to bypass the headaches related to traditional banks. It was widespread sentiment like that of Mr. Sunday that Ferrum discovered through their research into the unbanked of Western Africa.
It was at the Proof of Work Pitch at Consensus 2018 where the founders of Ferrum first met with TLG Ventures, a team of Nigerian business professionals with deep, personal connections in the banking and regulatory sectors of Nigeria. After much discussion the two teams formed a partnership and founded Kudi Exchange (now known as First Kudi). Through First Kudi, they sought to leap-frog the plethora of issues associated with traditional banking in Nigeria and to redefine the way many Nigerians controlled their own wealth. For First Kudi, the path ahead was long and winding, but the destination was far too important to ignore. So they began building. Thankfully, there were some factors working in First Kudi’s favour. Due to an underdeveloped credit card system and a lack of means for fighting the inflation of the Naira, Nigeria was desperate for access to peer-to-peer financial instruments. Furthermore, there were no local competitors offering a fiat gateway exchange in Nigeria, in spite of Nigerians showing a keen interest in Bitcoin from as early as 2016.
At the time there were only a few companies that offered Nigerians cryptocurrency services, all of which were based outside of Nigeria and charged high fees and imposed large spreads. The average Nigerian crypto user, who was less interested in speculation and who used digital assets primarily for simple payments and remittances, as well as a lifeboat against inflation, clearly deserved better.
Enabled by the fast and interoperable technology behind Ferrum, First Kudi created a digital asset exchange where Nigerians could frictionlessly access fiat to digital asset pairs, and were able to store these digital assets in a digital wallet that could be fully operated with only a cell phone and an internet connection. First Kudi even allowed users to send Naira over WhatsApp or SMS, and provided a debit card connected to the First Kudi app that they could use anywhere debit cards were accepted in Nigeria. Furthermore, First Kudi was, and still is, the only digital currency exchange in Africa to offer US Dollar stable coins via the Gemini Dollar.
By utilizing the Ferrum Network Token (FRM) as the ‘gas’ for the exchange, First Kudi users were able to perform fast, inexpensive transactions while simultaneously being rewarded for doing so in FRM. This facilitated a cycle wherein all of these Ferrum Network participants benefited from the demand for and subsequent burning of the token.
With a solid product in hand, First Kudi set out to aggressively market itself to the people of Nigeria. Ferrum Network and TLG Ventures joined Ian Balina on his Crypto World Tour where they shared their stories and the story of First Kudi with thousands of attendees. From there First Kudi forged brand awareness through local celebrities, YouTubers, bloggers and was even featured on the BBC World News. This was coupled with boots-on-the-ground local meetups where customers were spoken with and signed up one-by-one.
”It’s much easier to go from distribution to product than from product to distribution.” - Anthony Pompliano.
First Kudi thrives to this day and has enabled Ferrum Network to accomplish adoption and usage in an atypical, upside-down fashion. They saw what a lot of other companies didn’t at the time. If you know what you’re doing, the product is the easy part; the distribution is what is hardest. First Kudi was a vessel through which Ferrum was utilized en masse, and laid the foundation for what would come next.
Success in Nigeria is proof that blockchain technology has the power to revolutionize fiscal security across the globe. Success with First Kudi has proven that Ferrum Network is here to stay – and that those who use it and hold onto it, are rewarded.
The empowerment of the Ferrum Network Community
The fight for economic liberation did not end in Nigeria. Confident in the stability of First Kudi, the Ferrum team continued working tirelessly for their users to create value within their products. Their Roadmap has been more like a technological superhighway on which, for every objective passed, some attractive new road sign rises from the horizon. The tires of many have been gilded gold on the drive through this digital El Dorado.
The financial destiny of many in the Ferrum Network Community has been redirected somewhere hopeful because of this work, and many are seeing their financial futures change before them. This is important not for people trying to buy their second Lamborghini, but for those among us who have struggled to put a roof over our head. Imagine this: it’s late at night and in one clumsy move you manage to accidentally send almost $2000 worth of your hard-earned FRM into the ether. And not the one developed by Vitalik Buterin, but the one from which not even light escapes: the contract address. You can’t believe what you’ve just done, and you start panicking. You scour the crypto forums for some vestige of hope and find nothing. In desperation you reach out to Ian Friend through Telegram. After some time, he responds.
“Look, I’ll look into it, but tokens sent to the contact address are never recoverable.” This is exactly what happened to StackThemSats back in late December 2019. For him, hope seemed lost. He had been saving FRM for some time, and this final amount would’ve taken him to a total of 250,000. This would elevate him to the ‘Gold’ tier in Ferrum’s subproject, The Foundry. At this tier he would be granted a sizeable allocation of presale investment in all the latest incubation projects. The Foundry effectively allows for crowdsourced venture-capital investments into a curated selection of new crypto projects entering the market. StackThemSats understood how valuable this access could be for him, and through this error he had squandered his chance.
At the age of 25 StackThemSats was forced to return home to care for his mother after the unexpected passing of his father. This was an incredibly difficult time for them both, and while need to care for his grief-stricken mother he found it impossible to find work in order to support them. Things came to a boiling point when his aunt, only two years later, died during the birth of her baby. This tragedy left StackThemSats and his mother to care for not only the newborn, but the eight-year-old son she also left behind. So he began studying cryptocurrencies and how to trade them. It was through this research that he first encountered Ferrum Network, and in his analysis of the team and the products they were offering, became convinced that he had perhaps uncovered a once-in-a-lifetime gem. So, in the midst of all the chaos around him, he put his head down and started accumulating FRM. This last 12,000 was all he needed to achieve his dream of joining the Gold tier, and he had just sent every single one of them hurtling into oblivion.
But then Friend replied. When we asked him, he had this to say about their interaction:
“He had accidentally sent his tokens to the Ferrum smart contract address. At the time he was understandably very upset. So I offered to send him 50% of what he lost as reimbursement, I felt like it was the right thing to do. He was very happy when I reimbursed him.”
StackThemSats now trades for a living and says he’s “fully content and happy with life”. He doesn’t need to work often due to The Foundry presale allocations that enable him to support his family. His original $13,000 investment into Ferrum Network is now worth $163,000. He says his mother still doesn’t really understand it all, but “she has seen the change it’s made in all of our lives and she’s really happy.” Even his young cousin knows that he trades crypto, and he was so excited when Bitcoin reached $50,000 recently that they celebrated together.
For people like StackThemSats, money is very clearly not everything. It’s an instrument through which you are able to build something in the future. Something rigid and safe for you and those around you. Ferrum Network understand that no matter where you are in the world, you deserve sovereignty over your own finances.
The road ahead
The future of Ferrum is extremely bright. With new partnerships and some huge successes backed by FAS and The Foundry, it is likely that early investors will remember fondly the days before a six-figure market cap launched them past the moon and into the unexplored regions of the universe. Ferrum is the very definition of what people mean by ‘gem’.
Projects like this are why The Gem Hunters do what we do. Stories like StackThemSat’s show the human side of crypto, and remind us that behind every wallet address is a person. Stories like his are not hard to find when we speak to our community about Ferrum: from being able to pay down debts to enabling someone to buy a house for their family, an investment in Ferrum has truly changed lives.
And it isn’t just investors who benefit from Ferrum. We can see the positive benefits of decentralization manifest in services offered by First Kudi, allowing the unbanked easy access to financial services and through them a route out of poverty. It is a return to the utopian ideals of the Bitcoin whitepaper, and to a vision of a democratised, decentralised financial system.