ICON (ICX): Growing the Korean Blockchain Landscape

What Is the ICON Blockchain Project?

Founded in August 2017, ICON is the largest and most well-known public blockchain project from South Korea. ICON aims to build an interoperable blockchain network that bridges autonomous online communities and real-world enterprises. Small independent software development teams to some of the largest organizations including the Seoul Metropolitan Government, Danal Co. (KOSDAQ: 064260), and Pohang University of Science and Technology (POSTECH) have benefited from using ICON’s open-source technology. 

The ICON Network makes use of a BFT-DPoS (Byzantine Fault Tolerance Delegated Proof-of-Stake) consensus mechanism and leverages an economic-governance protocol called Delegated Proof-of-Contribution (DPoC). It boasts on-chain governance, scalability, and interoperability. Over 135 validators, known as the ICON Public Representatives (P-Reps), from more than 35 countries operate and maintain the ICON Network. Its native cryptocurrency ICX is used to enable smart contract functionality within the ICON ecosystem, as well as provide network consensus validation and protocol governance.

The ICON Project’s vision is to ensure the legitimacy of decentralized data sharing between citizens, governments, and private enterprises in a transparent manner. With the upcoming launch of ICON 2.0: Batang, an updated network built on Golang, the ICON Network will be able to further accelerate enterprise adoption and public blockchain innovation in Korea and beyond.

Enterprise Blockchain Adoption

The ICON Project is well-known for its focus and success with enterprise adoption. This initiative is primarily spearheaded by ICONLOOP, a leading blockchain technology company in South Korea and the primary contributor to the ICON Project. ICONLOOP leads MyID Alliance, Korea’s largest decentralized identity (DID) consortium, with more than 70 enterprise members including Samsung Electronics, Naver Cloud, and Bithumb Exchange. 

ICONLOOP leverages both its own proprietary and ICON’s open source blockchain technology for real-world applications in banking, healthcare, government, and more. ICONLOOP offers three enterprise applications that utilize the ICON Network: 

• Zzeung, an identity authentication and management service

• BROOF, a digital certification and management service; and 

• VisitMe, a visitor check-in and management service. 

In August 2020, South Korea’s Jeju Island selected Zzeung for private, secure COVID-19 contact tracing. The ICON Project is helping to ensure the health and safety of Jeju Island’s 15 million annual tourists while protecting personal identity and privacy. In the same month, Shinhan Bank, South Korea’s second-largest commercial bank with $375 billion in assets, selected Zzeung to launch the country’s first blockchain-based financial Know Your Customer (KYC) authentication service. Zzeung is the only mobile app approved by the Financial Services Commission to open new customer accounts remotely with full KYC compliance.

Other contributors to the ICON Project, including Danal Fintech, a subsidiary of Danal Co., have also recently joined the efforts on enterprise blockchain adoption. In November 2020, Danal Fintech announced its plans to integrate ICON’s native ICX coin into Paycoin, its global payments and remittance app. This will allow those customers to pay in ICX at any of Danal’s 60,000 merchant partners including popular fast-food restaurants KFC and Domino’s Pizza.

ICON Network’s Public Blockchain Innovation

Public Blockchain Innovation includes various decentralized, community-led initiatives. This can be summarized into three key segments: decentralized governance, decentralized applications (dApps), and interoperability.

According to Dapp.com data, more than 1,000 users engage with ICON governance on a daily basis as of December 2020. ICX holders vote for P-Reps to govern the ICON Network, which features robust on-chain governance systems. One of them is the Contribution Proposal System (CPS), a decentralized grant program that takes a portion of the block rewards to fund new community-led projects.

Interoperability is the final step in completing the mission of the ICON Project set forth in the original whitepaper. The ICON Network features Blockchain Transmission Protocol (BTP), a unique cross-chain interoperability solution that does not require any form of trust, consensus, or game theory to operate in a decentralized fashion; it is secured entirely through its technical architecture.

Cryptoeconomics of ICX Coin

Every interaction created by the above mentioned initiatives feeds into ICON’s token economic model, as all transaction fees on the ICON Network are burned. Therefore, the more activities created by these initiatives lead to more transaction fees, and more transaction fees lead to more scarcity of the ICX coin.

Furthermore, the ICX circulating supply continues to steadily decrease, leading to even more scarcity of the ICX coin. As of December 2020, over 61% of ICX circulating supply is staked in the network, up from 38% in December 2019.