Coinvest ICO Review. Create your own crypto index fund.


Disclaimer:

  • This is not financial advice this is our opinion.
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  • This is not a buy, sell or hold recommendation.
  • Do your own research before you invest in anything including this project.
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Project:

Coinvest is creating a platform where any one can create an index of cryptocurrencies. This model is very much like the Motif platform.

What Motif is for stocks Coinvest is for cryptocurrencies. Coinvest having an ICO/TGE which will create COIN tokens. These ERC20 tokens are a utility token which will be used to pay for services on the platform and buy any of the index funds.

Team:

The CEO Damon Nam has worked as a director of Partner program in Microsoft. The tech director has worked in several large organisations such as Microsoft, at and T American airlines. Two advisors stand out Toy Scott which was chief technical office of Microsoft, Walt Disney and Peter Cahsmore which who is the founder of Mashable.



Tokenomics

  • ICO price of COIN: $700 per 1000 coins
  • Presale Cap: $3 million
  • Crowd Sale hard cap: $30 million
  • Presale Bonus: 25%
  • Total supply: 107 million
  • ICO Date: February 18th
  • Total tokens: 107,000,000

Opportunities for Coinvest

  • The cryptocurrency world is complex, risky and takes an enormous amount of time to follow. Coinvest will simplify investing in cryptocurrencies by providing a one stop shop to invest in a basket of cryptos. There are two types of investing, the first to invest in a group of cryptos some one else has created and the second is for an investor to create his own personalised index fund. In both cases the users do not need to install the individual wallets of each of the cryptos in their funds. This makes it easier to maintain.
  • The only practical real alternative today to hold a diversified basket of coins is an exchange. These exchanges have risks, Coinvest claims that their holding bot is more secure than an exchange.
  • Coinvest have hinted that there might be loyalty rewards for the token holders, but they also highlight that this token is not a security.
  • Any user can create a fund. The creator of these funds will earn 50% of the trading fees on these funds. It is unclear at this time if there will be any annual management fees.
  • The team has strong business experience.
  • An amount of the profits will go into coin buybacks of the COIN token and to replenish the reserve.
  • The Coinvest user base extends from the new crypto users, to institutional investors, hedge funds etc…
  • The whitepaper hints at much further development in the future, including margin trading.
  • Coinvest is a direct competitor to ICNOOMI, a platform which has done relatively well.

Risks for Coinvest

  • As we understand it. The index fund creators can allow others to follow their portfolio, in return the fund creator will earn a fee on the trading fees charged to the followers. This incentivises the fund creators to trade frequently rather than Hodl the right coins.
  • A trading fee of $4.99 will be charged on every order, this will not be viable for very small transactions (sub $1000)
  • Coinvest highlights there is no need for a KYC because the “bot” holds the tokens and not a legal entity. Who knows what regulators will throw at the crypto space in the future? It will not come as a surprise to many if in the future smart contracts will also need to perform KYC when holding funds on behalf of third parties. This could have a non negligible impact on the Coinvest business model.
  • In the cryptoverse holding your own private keys/seed is the mantra to live buy, when giving this away users are entering into an IOU transaction with a third party. This means that if the third parties goes away, is hacked or shutdown those IOUs are not worth anything. The Coinvest app will hold the private keys locally, but from what I understand this is not the case for the actual personal index funds.
  • There is the risk that cryptocurrency index funds will be offered by the typical big fund providers such as VanEck, Vanguard, Fidelity etc.; these competitors are tough to beat. Coin base could also offer such products which have an impact on any similar products.
  • The creators of the funds users are following could lose interest and not rebalance or update the funds, if they are not incentives enough by the Coinvest team. It is unclear what the fiduciary responsibilities of the fund creators are.

Questions we are still looking into.

  • How will the smart contract hold the tokens? Specifically can an Ethereum smart contract hold real Bitcoin, Stellar etc…? Or will these tokens be held through a reference token
  • Will the rebalancing of the funds for the subscribers to a fund be imposed or optional? How will Coinvest mitigate the risks of each option?
  • How will coins which deliver a dividend or a stake be managed?
  • What due diligence will be performed if any on the fund creators?

Conclusion

There are already some crypto funds on the market such as : Combi Coin and Crypto20 – these funds have a dedicated professional management team which monitors the funds and rebalance them according to a specific rule book this provides stability, predictability and trust. Iconomi is a crypto platform which has allowed a select number of fund managers to operate funds. Coinvest, is creating a platform to liberalise fund creation – platforms are powerful because they provide the necessary tools to the free market to find the best way to tackle a particular solution. Currently, the market can probably make use of both fund models and Coinvest will have the first mover advantage over future competitors if they implement the road map as specified and act in the best interests of the token holders.