What Is Chainge Finance and Is $XCHNG a Good Investment

Published: 4th April, 2024 | Last Updated: 4th April, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

In this post, I will explain what Chainge Finance does and whether I think investing in its XCHNG token is a good investment or not. 

What is Chainge Finance? 

From a user perspective, Chainge is an app that allows you to trade any cryptocurrency cross-chain and avail of DeFi services to become your own digital bank. So unlike, say Uniswap, where you can only trade on the Ethereum blockchain Chainge allows you to instantly trade between assets on different chains without having to use bridges and wrapping. Moreover, because Chainge is a cross-chain liquidity aggregator it has the highest liquidity at $70bn dollars than any other exchange. This means that transaction fees (slippage) are extremely low. 

What sets Chainge apart

1. User interface

The first thing that strikes you about the Chainge app is that it is unlike any other crypto trading app you have used. The User Interface is very different from what a centralized exchange looks like and miles ahead of any decentralized exchange I have used. And I have used many. 

You know how people are always saying how crypto has not got its act together when it comes to the User Experience? Chainge is the first DeFi app I have come across that nails the UX.  

You can check it out by downloading the app on the iOS app store here or the Google Play Store here.

 

2. Product features

  • Trade more than 1,400 cryptocurrencies across 55 chains. This includes both EVM and non-EVM compatible chains
  • Futures DEX and Options DEX to trade crypto futures and options in a decentralized manner
  • Virtual Credit Card to spend your crypto directly as fiat (1% fee plus 18% APR for late paid bills)
  • Escrow services
  • A so-called “Magic button” in the center of the app allows you to read QR codes. This feature will likely be used to make payments in the future. Paying with the use of QR codes is already popular in many Asian countries, especially China and India. 

3. Wallet

Chainge offers a sleek self-custodial wallet app that is integrated into the exchange and other financial services it offers in its app. In addition, it offers a Desktop dApp to which you can hook up a wallet such as MetaMask. Whichever option you choose it means you have complete control of your crypto assets. A unique feature of the Chainge app is that it encrypts your seed phrase into a QR code which you protect with a password. This way you only need to worry about managing a password rather than anything else. 

 For those who are not familiar with setting up wallets and seed phrases, Chainge allows users to set up a wallet using their phone number or Twitter account.

3. Passive income

The Chainge wallet app allows you a couple of ways to earn income on your asset. 

  • The first is to join a liquidity pool. Chainge aggregates liquidity pools across DEXs for you to choose from. If that was too much jargon for you then I suggest you take my course where I explain fundamental crypto concepts such as yield farming.
  • Earn interest on idle digital assets

4. DAO

In April 2024 Chainge announced that it would be sharing 80% of profits with users who locked up (staked) the XCHNG token. When you stake XCHNG you get vXCHNG in return which you can use to vote on DAO decisions. For example, DAO members are currently voting about whether to accept a $1Mn investment from a Venture Capital fund and whether to release more XCHNG tokens on the market. 

Chainge Finance technology

Chainge is built on top of the Fusion blockchain. Two core pieces in the Fusion tech stack will help you understand Chainges’s potential.

1. DCRM 

Distributed Control Rights Management (DCRM) is a piece of technology that makes chains interoperable. 

Fusion’s DCRM technology was developed by Rosario Gennaro, Professor of Computer Science at CUNY, Steven Goldfeder, Ph.D., at Cornell University’s Computer Science department, Louis Goubin, Professor of Computer Science at the University of Versailles, and Pascal Paillier, Ph.D., CEO and Senior Security Expert at CryptoExperts. These same people also authored many publications on the cryptographic algorithms that Bitcoin uses. 

It is considered the best cross-chain technology. 

DCRM allows Chainge to custody wallets on the Fusion chain and then transfer them to the user. In essence, Chainge owns different assets across different chains in order to facilitate moving assets across chains.

DCRM is considered highly secure as it uses multiple signatures for transactions to go through. To date, it has not been hacked and it is used by other chains as a bridging technology. 

2. Time framing

Usually, when you stake an asset you lock it up. For example, say you buy a US treasury. Your funds are locked up until maturity or until you sell the treasury. Similarly, if you stake ETH your ETH is locked up for the duration that you are staking. However, Fusion allows dApps to build interesting products that don’t get locked up but still earn a yield. For example, if you time frame 1,000 USDC on Chainge you will receive the principal plus its yield instantly in the form of USDC futures denoted as TF-USDC. You can then use that TF-USDC as you please: you can sell it on the Futures DEX, use ti write options, and more. 

Update: The time framing feature was deprecated post acquisition and is no longer available in the new Chainge app. 

XCHNG Token

When Chainge Finance originally launched its native token was called CHNG. However, in December 2023, Chainge Finance was acquired by a VC fund at a valuation of $47Mn. In February 2024 CHNG tokens were switched for newly minted XCHNG tokens. The old CHNG tokens were burned. The total supply of XCHNG tokens is 1.2Bn with a circulating supply of 474Mn.

With the old token, Chainge used 25% of profits to buy back tokens and burn them. However, I was unable to uncover whether that is the case with XCHNG tokens as well. 

Token allocation

  • 61% went to existing CHNG users
  • 5% Ecosystem & Partnerships
  • 15%Team & Advisors
  • 5% Public Blockchain Collaboration
  • 14% reserved for future investment from institutional partners as well as CEX listings.

Is XCHNG a good investment?

To answer this I scored Chainge and its XCHNG token across 4 dimensions

  • Team: 95%
  • Product: 90%
  • Tokenomics: 95%
  • Momentum: 80%

Here are the results of my research. 

Team

1. Are the founders legit with related experience?     ✔️   

Dejun Qian (DJ Qian) is the CEO of Chainge Finance. He is the same guy who created VeChain and Qtum and the founder of Fusion. He has been in the blockchain space for more than 10 years and is well respected within the industry. The team is small at 17 people but I expect more will join now that Chainge was acquired. Najam Kidwai joins the leadership team with experience in investing in digital asset projects and Miek Lempress brings experience from Silvergate Bank, Coinbase, and A16Z.

You should be aware there are some in crypto community who consider DJ Qian to be a contentious character as they believe they were scammed when Fusion got hacked in 2020. This source says it was not an inside job.This article reports on the Fusion hack.

2. Have they built Web 3 projects before?    ✔️    

Yes

3. Did they do an exit?    ✔️    

Yes

4. Can you find legit profiles on LinkedIn?    ✔️    

Yes

5. Did they raise funds?    ✔️

Was acquired at a valuation of $47Mn in December ’23 by Coded Fi Ltd. 

6. How long have they been around?    ✔️    

It’s been around since at least 2021

7. Public appearances through Interviews/podcasts    ✔️    

DJ Qian makes appearances on podcasts but hasn’t really spoken since the acquisition

Overall team score:        95%

Product

1. Is it easy to understand what they do?     ❌

It’s easy to understand that it is a cross-chain aggregator to buy and trade crypto. It’s much harder to understand the DCRM technology and time-framing

2. What is it?    –    

An app that allows you to trade crypto across chains instantly and with low fees. 

3. Is there a demand for their product?     ✔️    

Yes, crypto natives who want to use a secure, non-custodial solution to trade across chains. I don’t think it’s for genZ who buy Dogecoin on Robinhood despite the UX being the best amongst DEXs.

4. Is there a use case?    ✔️    

Yes make the DeFi user experience sleek and easy: cross-chain, cheap, and easy to use

5. How big is the market?    ✔️    

DeFi market was $22Bn in 2023

6. Is it being used?     ✔️    

More than 100Mn TVL according to DeFi Lamma

7. Github activity    –    N/A

8. Has the product launched?    ✔️    

Yes though more features are expected in the future

9. Does it have a strategic moat?     ✔️    

No DCRM technology is being used by others as well. But I will give it some credit for the UX

10. Is it focused?    ✔️    

Yes

11. Is the website easy to understand for non-crypto visitors?    ❌    

No, you need a couple of days of intense research to understand what they are on about. The best resource is their old docs which are yet to be updated for the new app and XCHNG token: 

12. Do they have a proof of concept?    ✔️    

Yes app is live and being used

13. Is the UX good?     ✔️    

The app’s UX is intuitive and easy to use. 

14. Is it already being done?     –    

No

15. At what stage is the product?     –    

You can trade on the app and place assets in a liquidity pool but more features are expected such as limit orders, AI text to trading, Charts and analytics and more

16. How does it create value?     –    

Faster, cheaper transactions across chains in a decentralized app. 

17. How does the project generate revenue?    –    

They keep 20% of profits. I assume profits come from trading fees

Overall product score        90%

Tokenomics

1. Why is the coin valuable?    ✔️    

You can use XCHNG as gas across chains and for voting in the DAO

2. Did they do a pre-mine?    –    

10% CHNG was awarded to the community before the app launched. Then post acquisition they converted to XCHNG and the team and investors got allocations

3. Is supply fixed or inflationary?    –    

Fixed

4. Was it a fair launch    –    

Somewhat but it got confusing as allocations were redefined post-acquisition

5. Circulating/total supply    ❌    

39%

6. Token release schedule    ✔️    

Tokens are released into circulation only based on DAO voting

7. Are there incentives to reduce or lock supply?    ✔️    

No, but they will only release tokens into circulation based on community voting

8. How many tokens    ✔️    

XCHNG only

9. How much upside is left: market cap vs industry size    ✔️    

$100Mn vs many Bns

10. Is it listed on major exchanges    –    

No, it is only available on MEXC, Gate.io and SushiSwap

Overall tokenomics score        95%

Momentum        

1. Is it trending on social media?    ✔️  

Yes Lunarcrush shows there is momentum on social media

xchng on LunarCrush

2. Is the market cap low compared to similar projects?    ✔️    

One of the lowest at $100Mn

3. What is the crypto market like?     ✔️    

In the middle of a bull run

4. What is the sentiment for the sector this crypto focuses on    ❌    

It’s not AI, RWAs, or gaming

5. Are they marketing heavily?    – 

No

Overall momentum score        80%

Bottom line

I am bullish on XCHNG and have taken a position. I am impressed both by the mobile app and the technology behind it that allows you to self-custody your assets and become your own bank. The low market cap and high-caliber team are also positive. 

Please note that none of this is financial advice and make sure to do your own research or consult a professional when it comes to investing your funds. 

References

Up next

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In this post, I will walk you through what the Everest ID coin is and how it works. I will then share my research on whether I think this is a good investment or not. Continue reading.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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