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Iconomi – An Ethereum-Based Fund Management System

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Iconomi is an Ethereum based fund management system. The company behind the platform intends to create two funds, namely and index fund and a high performance fund. Iconomi will hand-pick cryptocurrencies and startup companies in the blockchain space and include them within their offering. Investors will then be able to invest their capital in these selected projects and receive dividends. The uniqueness of this model is that it has not been done before, as professional investors usually stick to fiat assets and traditional investment vehicles.

The main problem Iconomi is attempting to solve is that digital currency capital might lie dormant within the crypto-ecosystem, thereby not contributing to the growth of ecosystem itself. Instead, by taking custodianship of the digital currency capital and reinvesting it into crypto-based ventures, investors can have a higher return than if it were simply being kept in their wallet. In this sense, what Iconomi is doing is not entirely radical as a business model but should be perceived as incremental.

Investors can participate in Iconomi via the ICN tokens which are used to perform the actual investments. All in all there are 100mn ICN tokens that were created during the ICO period. Token holders will be the only ones who will be able to access the funds; although these tokens will be tradable. Investors are even issued a debit card so that they can trade their ICN tokens via a POS terminal.

The high performance fund, is more focused on early startups and ICOs. This follows the already established model used by successful cryptocurrency investors known as ‘flipping’. This model has been proven to work given sufficient patience. However, recent fears of projects being overbought put this type of activity at risk of not yielding as much as intended. The index fund, which is the coin managed fund, will list 14 cryptocurrencies. It will be actively managed by the Iconomi team which will target different cryptocurrencies. With market volatility still being a major concern in the crypto-ecosystem, having an actively managed fund, is a double-edged sword. Gains can be be if the administrators are always on the ball but the model is susceptible to sharp declines. This makes the high performance fund a more high-risk and high-reward option that should only be followed by the most avid of cryptocurrency holders.

Overall, what Iconomi is trying to achieve is important to the crypto-ecosystem; at least in principle as it as attempts to bring order to a fractured market. The main issue with it is that the ecosystem itself might not have sufficient capital to generate sufficient return many crypto-investors are used to. With many ICOs being overbought and too little capital actually moving within the ecosystem itself, due to a lack of end users, the platform offered by Iconomi might be ahead of its time. And maybe that is it just the point.

Yves Nicholson
Yves has been following the progress of digital currencies since mid-2014. Originally interested in the legal status of digital currencies he began to work with Merkle Tree under Adam Vaziri. He then went on to become a consultant for Diacle. Currently, he is the director of Digital Corporate Services, focusing on providing banking and incorporation assistance to blockchain based companies. His main interest in the areas of digital currency are smart contracts and smart governance applications.