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The United Arab Emirates (UAE) is reportedly leading the MENA region’s Fintech sector with an expected valuation of around $ 2.5 billion by 2022 (which is still not significant by international standards).
Regional and multinational financial service providers have launched digital platforms in order to improve the customer experience (UX), reduce operational costs and meet appropriate data regulations (and other guidelines). According to Clifford Chance, the MENA Fintech market is on track to reach a valuation of $ 2.5 billion 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 focused on adopting the latest technologies to expand its economy.
The Emirates Blockchain Strategy aims to shift approximately half or 50% of all government interactions to blockchain or DLT (Distributed Ledger Tech) platforms by 2021. Meanwhile, the Dubai Blockchain Strategy aims to make Dubai one of the first global cities to manage 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).
In addition to the UAE government-backed DLT projects, the UAE Fintech industry is now focused on investing in emerging digital platforms, especially those that focus on blockchain-based smart contract solutions.
Khurram Shroff, president of the Dubai-based IBC Group, recently confirmed that his company will 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 largest blockchain platform in the world for the development of decentralized applications (dApps) based on smart contracts.
The investment will reportedly be finalized through a partnership with Canada’s CanETH, an “institutional level” staking service for Ethereum holders. CanETH aims to support organizations interested in taking part in the Ethereum 2.0 launch and ongoing development efforts.
Khurram Shroff noted:
“We are very excited about the proposed ‘Proof of Stake’ concept for Ethereum 2.0 smart contracts and we are blocking 20,000 eth which is a one way trip to phase 2, this block shows our confidence in ETH2 and dedication to the Beacon Chain. . The greener “Proof of Work” model introduced in version 2.0 makes it an even more attractive investment. “
It’s worth noting that proof of the stakes isn’t actually the greenest proof-of-work model because they both operate using fundamentally different algorithms. However, the current version of Ethereum, which uses proof-of-work, hasn’t been able to scale effectively. Ethereum competitors such as 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 can lead to security issues.
Vitalik Buterin, one of the main founders of Ethereum, said that Ethereum 2.0 could be launched by December 1, 2020. But this would only be the launch of “Genesis”, which will require approximately 16,384 transaction validators and will require a quota of 524,288 ether (or more than $ 260 million at current prices) to be bound in the contract. This is required before Ethereum 2.0 can be launched safely.
CanETH Pool is a Canadian staking service that was co-founded by Dwain Pereira and Noman Qureshi.
CanETH aims to offer an easy way for average users to be more actively involved in the development of Ethereum 2.0.
Qureshi confirmed:
“Our goal is to make crypto more accessible to the public. To begin the staking process, Buterin’s” VB2 “address sent 100 transactions totaling 3,200 units, with a current value of approximately $ 1.4 million. . Khurram Shroff’s “CanETH” address is sending three tranches totaling 21,984 units for a total of 687 validators, currently worth approximately $ 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 ultimately paid for using fiat currencies, which creates downward pressure on the value of the cryptocurrency. So the Proof of Stake model will be both energy efficient and more profitable for stakers. “
Shroff added:
“Blockchain will transform virtually all transactions. We believe Ethereum 2.0’s decentralized “distributed consensus” model will unlock multiple avenues for growth and innovation. With the environmental concerns associated with previous Blockchain models addressed, their application will become much more widespread. “
While Ethereum 2.0 looks promising, it has faced many technical challenges in recent years. Ethereum co-founder Vitalik Buterin revealed in 2018 how he made many mistakes while trying to develop scalability solutions for Ethereum. Buterin went into detail regarding the complex nature of blockchain-based consensus algorithms.
Ethereum 2.0 is a highly ambitious project that will aim to gradually move from proof of work to proof of stake-based consensus, something that has never been attempted on a DLT network as large as Ethereum.
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