A comparison between the LASIC principle of Lee and Teo (2015) and our LAS-VICT principle of cryptocurrency exchanges
| Dimension | Lee and Teo (2015) | Our crypto-exchange study |
|---|---|---|
| Low user-burden | It was initially “low profit margin”, which suggests that where there is widespread Internet access, where information and services are readily available for free, users not only search for the lowest prices but, in many cases, are even unwilling to pay for some services or products. The FinTech products/services should be kept at low costs so that the network effects can be built for monetisation | We transformed this into “Low User-burden”, which suggests that when costs are sometimes inevitable owing to external market conditions, it will be more realistic to consider the benefits altogether, which would offset the costs |
| High asset liquidity | It was initially “asset-light”, which suggests that asset-light FinTech businesses can be innovative and scalable without incurring high fixed costs on assets. This results in relatively low marginal costs, reinforcing the first principle of “low-profit margin.” | We transformed this into high asset-liquidity. In addition to the need to not incur large fixed costs, we argue that crypto-exchanges and possibly other FinTech businesses will need to maintain a high liquidity in terms of assets for addressing the capital needs for expansion |
| Scalability | FinTech businesses may start small, but they need to be scalable in order to reap the full benefits of network externalities | We inherit this from the LASIC principle with no significant changes |
| Variety | Not mentioned | We argue that a varied range of products and services should be offered to address users' needs and diversify the risks associated with cryptocurrencies |
| Innovativeness | Successful FinTech businesses need to be innovative, both in terms of products and operations | We inherit this from the LASIC principle with no significant changes |
| Compliance-sensitive | It was initially “compliance-easy”, which suggested that businesses that are not subject to high compliance regimes will be able to be innovative and have a lower capital requirement | We moved from solely deciding where to establish FinTech businesses to more proactively changing legislation and policies where FinTech businesses are located |
| Transparency | Not mentioned | We argue that transparency is essential for addressing users' needs and providing them with confidence due to the complex nature of cryptocurrency and its volatility |
| Dimension | Our crypto-exchange study | |
|---|---|---|
| Low user-burden | It was initially “low profit margin”, which suggests that where there is widespread Internet access, where information and services are readily available for free, users not only search for the lowest prices but, in many cases, are even unwilling to pay for some services or products. The FinTech products/services should be kept at low costs so that the network effects can be built for monetisation | We transformed this into “Low User-burden”, which suggests that when costs are sometimes inevitable owing to external market conditions, it will be more realistic to consider the benefits altogether, which would offset the costs |
| High asset liquidity | It was initially “asset-light”, which suggests that asset-light FinTech businesses can be innovative and scalable without incurring high fixed costs on assets. This results in relatively low marginal costs, reinforcing the first principle of “low-profit margin.” | We transformed this into high asset-liquidity. In addition to the need to not incur large fixed costs, we argue that crypto-exchanges and possibly other FinTech businesses will need to maintain a high liquidity in terms of assets for addressing the capital needs for expansion |
| Scalability | FinTech businesses may start small, but they need to be scalable in order to reap the full benefits of network externalities | We inherit this from the LASIC principle with no significant changes |
| Variety | Not mentioned | We argue that a varied range of products and services should be offered to address users' needs and diversify the risks associated with cryptocurrencies |
| Innovativeness | Successful FinTech businesses need to be innovative, both in terms of products and operations | We inherit this from the LASIC principle with no significant changes |
| Compliance-sensitive | It was initially “compliance-easy”, which suggested that businesses that are not subject to high compliance regimes will be able to be innovative and have a lower capital requirement | We moved from solely deciding where to establish FinTech businesses to more proactively changing legislation and policies where FinTech businesses are located |
| Transparency | Not mentioned | We argue that transparency is essential for addressing users' needs and providing them with confidence due to the complex nature of cryptocurrency and its volatility |
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