Iconomi (ICN) Review: The Digital Asset Management Platform
Iconomi is something a bit different in the cryptocurrency and blockchain world.
While it focuses on financials as do many crypto projects, it is unique in that it allows users to create their own digital asset array (DAA). Perhaps even more importantly other users can then invest in these digital asset arrays.
Coinbase and other leading blockchain linked companies would have you think the first cryptocurrency index funds came from them, but the truth is that the very first index fund in cryptocurrencies came from Iconomi in the form of the Blockchain Index DAA.
The really great news for individual retail investors is that Iconomi hasn’t put any restrictions on who can invest in their DAA products. Unlike Coinbase, which allows only accredited investors access to its Index Fund.
The Iconomi team has made the decision to keep access to its funds open because they feel that this approach “is creating the missing link between the old and the new economy.” This new paradigm is one in which any individuals can benefit from investment practices that were once reserved for the ultra-wealthy, elite investors.
How Iconomi Works
In essence, Iconomi works much like a mutual fund company works for equities, with the main difference being the focus on blockchain assets.
They offer different investment vehicles based on a person’s risk appetite, and the offerings continue to grow since anyone can create their own DAA. These DAAs can be bought and sold easily, with no lock-outs and no waiting period for withdrawals.
Investing in DAAs isn’t all that difficult. First you’ll need to register an account on the Iconomi website. Once that’s done you can make a deposit in either Bitcoin or Ethereum and just recently support for deposits and withdrawals in Euros has been added.
Once you deposit, you’re ready to invest in any of the 29 different DAAs currently offered on the platform. Ethereum powered smart contracts are used to manage the investments on the platform, and nearly all funds are kept in a multi-sig cold storage solution to protect them from bad actors.
The intent of the team is to provide an easy way to invest in cryptocurrencies, as well as helping to limit risk in some cases, while looking to maximize profits in others. Any manager can create and curate their own DAA using the toolkit provided by the platform, and they then collect fees from those who choose to invest in their DAAs.
Digital Asset Arrays
Currently a number of the funds available are those created by funds that were hand-picked by Iconomi to test the platform. The big draw for managers is the more successful they are in creating profitable DAAs the more investors they are likely to attract.
The initial DAAs were created by cryptocurrency investment leaders such as Columbus Capital Ltd. and Solidum Capital, but have since expanded and now include 29 different DAAs to choose from. You can have a look at the list here and see how diverse the offering is. There are low risk, high risk and anything in between, with a huge number of cryptocurrencies mixed into the various DAAs.
Each also charges its own management fee, typically ranging from 1% up to 6%. Some of the DAAs have even been tokenized and can be withdrawn themselves to ERC-20 compliant wallets, and they may even be listed on exchanges.
Some of the top funds offered by Iconomi include:
Blockchain Index (BLX)
This was the very first DAA offered by Iconomi and it remains the flagship for the platform. The founders have said it was created to keep “a finger on the pulse of the blockchain economy” and it does this by investing in 29 different cryptocurrencies in a market cap weighted manner that adjusts for changes in trading volumes. It includes Bitcoin, Ethereum, Monero, EOS, DASH and 24 other digital assets.
Future Chain Index (FCI)
The creators of this top performing DAA have over 20 years in traditional financial market trading, and have brought that to bear on the new cryptocurrency arena. This DAA is tightly focused, including Bitcoin, Ethereum, Monero, 0x, Wanchain and just 8 other cryptocurrencies. It looks to continually pivot and provide the best return for investors.
KryptoSTAR Core (KCOR)
The fund, which has been another of the best performers on the Iconomi platform, attempts to maintain a core of top cryptocurrencies, while rebalancing to capture long-term growth in some smaller and more dynamic projects. While the digital assets included can vary, currently the DAA includes Bitcoin, Ethereum, Monero, Melon, TenX and six other cryptocurrencies.
The ICN Token
Iconomi naturally has its own token, which represents shares on the Iconomi platform.
Initially there had also been plans to use the token to issue dividends, but once it was discovered how many regulatory hurdles would need to be overcome due to the securities laws in the dozens of countries the Iconomi team decided instead to go with a buyback model. With this buyback model the Iconomi team uses company profits to buy back some portion of ICN at intervals and then burns those coin to create value for holders.
It may sound as if the token doesn’t have much utlity, and this was a concern of early investors as well. But, as the platform grows to include more DAAs the token will eventually be used in the creation of a DAA as well as for other actions on the platform such as rebalancing, changing fees, or raising the limit on funds. In fact, it is already being used in this manner, although the platform remains in beta.
The ICN token rallied strongly back in March 2018 after adding support for use of the token to pay platform fees. At that time the market cap rose to nearly $240 million, taking ICN into the top 100 coins by market cap. The price has since retreated, and as of early June 2018 the ICN token is listed as #136 on Coinmarketcap.com, with a market cap of just over $94 million.
It’s clear to see how the token fell alongside Bitcoin in May, so while it trades at just $0.95 in early June 2018 it should be able to rise back above $1 and possibly even $2 if the broader market recovers.
Where to Buy and Store Iconomi (ICN)
Iconomi was founded by Tim Zagar and Jani Valjavec, who previously served as CEO and founder respectively, for the Prague based Bitcoin payment gateway Cashila. Jani Valjavec is also a founding member of Columbus Capital Ltd., one of the original DAA creators.
Iconomi’s COO Matej Tomazin has had an extensive career, serving as both broker and portfolio manager, as well as CEO. And the CTO of Iconomi, Miha Vidmar, has over 15 years as a software engineer and developer.
The Iconomi team posted their 2018 roadmap late in 2017, and after meeting most goals in that prior year, they are well of their way to meet the 2018 goals as well. The roadmap includes improvements for users, new platform offerings, added DAA tools and more. Some notable additions include:
- Fiat integration for deposits/withdrawals (Euro added as of May 2018)
- Direct purchase of individual assets
- A debit card
- Support for DAA manager company accounts
- DAA tokenization optimization
- ICN payable fees (complete March 2018)
- Big Four audit
- Launch of private DAAs (invite only investments)
- API integration for data/trading
If the Iconomi team has their way, we’ll soon have an investment platform designed for the average man, and built on the blockchain technology that has been creating wealth for so many who would have been unable to access elite investment opportunities.
With the digital asset arrays that are so similar to mutual funds, they are also making crypto more understandable and accessible for the general public. The number of DAAs available has already more than doubled in 2018, and as more managers come to realize the power of the platform the number and variety of DAAs available could explode.
We’ve just seen the platform add the ability to deposit and withdraw in Euro, which is huge, and we expect that they will add support for the U.S. dollar soon as well. We are also hoping that they will win the ability to accept U.S. investors, but that will depend heavily on how regulatory pressures work out. We can bet that the major U.S. funds would love to manage some DAAs though if the platform begins to take off.
Iconomi has developed a platform that could actually revolutionize the cryptocurrency ecosystem by making it accessible to the general public. While providers such as Coinbase may have greater marketing power now, Iconomi has the ability to create any grouping of cryptocurrencies at all, and it can do so quickly, without worrying about corporate bureaucracy.
One word of warning however. The code for Iconomy is not open source, and has not been released for inspection. This has some cryptocurrency enthusiasts worried about the possibility of centralization.
Just something to keep in mind if a lack of transparency worries you.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.