Swim with the “Crypto Assets” with Melon (MLN)

Melon (MLN) is one of many cryptocurrencies designed to cash in on crypto assets. To clarify, crypto asset is a catch-all term for any equity or security trade through the blockchain.

Melon (MLN) is associated with Melonport AG; a private company, which is developing what it calls an “an asset management computer.” In detail, an asset management computer is a blockchain platform that will manage assets.

The basis of the platform is the Melon protocol which will facilitate transactions between investors and exchanges. Interestingly, the transactions will move through the Melon fund.

The Company behind Melon (MLN) plans to dissolve itself

I believe the most interesting aspect of Melon (MLN) is its governance.

Surprisingly, Melonport AG is scheduled to be dissolved in February 2019. To explain, the Melon team plans to hand management of Melon over to a group called the Melon Council.

The governance handoff is supposed to occur when version 1.0 of the Melon Protocol is available. In detail, the council is composed of the Melon Technical Council and Melon Exposed Business (MEB) representatives.

In particular, the Technical Council is composed of experts who are supposed to be highly-skilled and “conflict-of-interest” free. In addition, the MEB representatives will include fund managers, investment advisors, and other users of the Melon protocol.

However, Melon does not reveal how the council members will be chosen. Moreover, Melonport does not say how the council will be kept “conflict of interest-free.”

I am skeptical of Melon because fund managers will have a huge conflict of interest. To clarify, fund managers’ pay can be based upon the number of shares they sell.

Melon (MLN) is a Cryptocurrency for Funds

The major purpose of Melon (MLN) is to create blockchain-based investment funds similar to mutual funds, hedge funds, and exchange-traded funds.

Thus, a major goal at Melonport is to build a decentralized infrastructure for funds. Investment funds can be an extremely lucrative industry. The American mutual fund industry held assets worth $18.75 trillion in 9,356 funds in 2017, Statista estimates.

Additionally, Australia’s superannuation funds; or super funds, held $2.7 trillion in assets in June 2018. Moreover, Australians contributed $34.1 billion to super funds in the June 2018 quarter, The Association of Superannuation of Funds of Australia calculates. To explain, super funds are retirement funds every Australian has to contribute to.

Will the Melon (MLN) Crypto Assets Work?

Hence, there could be a huge market for Melon’s crypto assets technology. However, both Australian super funds and American mutual funds are highly regulated.

I do not think financial regulators will let fund managers use a technology created by a murky Swiss company. Notably, Melonport AG is based in Zug, Switzerland. Thus, officials will fear Melon as a money-laundering scheme.

On the other hand, there could be a huge market for Melon (MLN) in countries that lack retirement mechanisms like America’s Social Security. This includes nations like China and most Latin American countries.

Will Melon (MLN) be banned?

To explain, in most countries individuals are on their own for retirement. If they have no money saved people either work until they die or starve. Under those circumstances, something like Melon could provide retirement income for middle-class professionals or small business owners.

Beyond retirement, an obvious use for Melon will be protecting the assets of middle and upper-class people from seizure by authorities. For instance, a business owner in Argentina could use Melon (MLN) to send his savings to Switzerland.

Consequently, authorities in many countries will try to ban the Melon crypto assets. In particular, politicians and bureaucrats will fear its use for tax evasion.

I guess financial regulators will only allow Melon’s use if they could control the Melon Technical Council. Hence, regulators will have access to the technology which means no privacy.

How valuable is Melon (MLN)?

Melon has a lot of potential value despite the potential legal problems. For instance, Melon (MLN) had a Coin Price of $4.89 on 13 December 2018.

Additionally, Melon achieved a Market Capitalization of $3.805 million and a 24-Hour Market Volume of $9,129 on the same day. CoinMarketCap reported a Circulating Supply of 778,238 MLN and a Total Supply of 1.002 MLN on 12 December 2018.

Impressively, Melon claims to have raised 2.5 million Swiss Francs ($2.51 million USD) in a February 2017 initial cryptocurrency offering (ICO). Hence there is strong market interest in Melon and its products.

Melon (MLN) has nothing to do with BNY Mellon

Importantly, there is no no-known connection between Melon; or Melonport AG, and the American bank BNY Mellon (NYSE: BNK). Importantly, BNY spells Mellon differently with a second l.

To clarify, the name Mellon in BNY Mellon comes from the Mellon Financial Corporation. The corporation was a Pittsburgh bank founded by Thomas Mellon in 1869.

The Mellon Financial Corporation disappeared in 2007 when it merged with the Bank of New York. In particular, that merger created today’s BNY Mellon which is a major payment processor in the United States. In addition, BNY Mellon is reportedly exploring opportunities in the cryptocurrency markets.

Is Melon (MLN) a good Cryptocurrency?

The cryptocurrency market gives Melon (MLN) some value because it is traded at CoinSwitch. To explain CoinSwitch is a popular cryptocurrency exchange aggregator.

Trading at CoinSwitch demonstrates market demand because CoinSwitch only lists altcoins that are actually being traded. Hence, I like to check CoinSwitch when I investigate a cryptocurrency.

In addition, Melon (MLN) is an Ethereum-compatible cryptocurrency. Thus MLN can be converted into Ethereum Request for Comments or ERC tokens like ERC20 tokens. Moreover, MLN can be quickly converted into the third-most popular cryptocurrency Ethereum (ETH).

On the other hand, I could not find Melon (MLN) in Bancor’s liquidity Network. Bancor (BNT) is designed to provide liquidity and fast conversion of Ethereum and ERC tokens.

The Melon crypto assets will need fast conversion and liquidity to reach a mass market. Importantly, Bancor is now offering similar conversion and liquidity for EOS (EOS) based tokens.

Why Melon (MLN) needs EOS

I have to be skeptical of any altcoin for investments whose creators are not participating in efforts to ensure liquidity. In addition, failing to convert to EOS (EOS) means Melon (MLN) is not taking advantage of a cryptocurrency whose creators claim to have solved the blockchain scalability problem.

The speed and capacity of many blockhains are limited because of all the encryption. For instance, Ethereum reputedly handles less than 20 transactions a second. Thus, Ethereum applications and smart contracts could not handle all the transactions required by a popular mutual fund.

On the other hand, EOS investor and Wall Street bigwig Michael Novogratz claims EOS’s blockchain can transmit up to 5,000 transactions a second. However, Novogratz is not presenting proof to his claims.

I think Melon (MLN) is an interesting cryptocurrency because it seems to have some use in real-world financial transactions. However, I have serious doubts about Melon’s potential legality and utility. Thus it will be wise to limit speculation in MLN until the Melon Protocol is available and the utility of the crypto assets has been demonstrated.

 

About the author

Daniel Jennings


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