ICONOMI is the hottest new ICO - check out the ICO here - in town at the moment. However, it appears that there is a lot of speculation (as is usually the case with these crypto projects) but not enough analysis on whether the investment would be profitable or not. Here is my attempt to give some additional color to this problem.
How do investors make money?
Remember the debacle of The DAO? Do you know why it was so attractive to investors? Simple - the promise of regular dividends based on performance of the fund. Now it ended in a disaster, but lets learn the right lessons at least - there is investor appetite for instruments with a recurring income component.
ICONOMI takes off where The DAO left in terms of providing regular income streams to investors. One thing that you can do when you have income streams is to try and quantify things. This way, you can build valuation models. Now everyone's assumptions will be wildly different, but it is something. If I ask you to build a valuation model for Dogecoin, what will you do? It could be $0 or $100 million, you have no clue. There is no solid basis to base your answer on. ICONOMI is different.
Investor Returns
Here are the various components of investor returns. Not many additional details are outlined in the whitepaper so I think the team is still figuring out the details. But even without concrete numbers, this should be helpful to potential investors:
- ICONOMI.INDEX will collect regular ETF fees, as a percentage of the total assets, similar to what Vanguard does with their ETFs.
- ICONOMI.PERFORMANCE will collect regular fund fees, as a percentage of the total assets, similar to what funds like those of Blackstone in private equity would. This is a standard hedge fund/private equity pricing component.
- ICONOMI.PERFORMANCE will collect performance fees. This will likely be highly variable, as it depends on the ability of the people managing the fund. Going to be hard to estimate.
- ICONOMI fund platform will collect fees from other 'fund managers' who get to list their own funds/strategies on ICONOMI. This will be a revenue-sharing agreement. Not sure how much ICONOMI will get in this deal.
The above income sources will all be distributed among the ICONOMI token holders, which is ICN. Each ICN token that you hold gives you a proportional right to the profits generated by ICONOMI through its funds and fund management platform. Also, I expect the initial payments to be higher, because they have said that they will first use up all the money raised in ICO before passing the costs down to investors, i.e. until the ICO funds last, there will be no costs associated with this project for the investors in ICN and what you see is pure profits! So for example, let's say the ICONOMI.PERFORMANCE fund above earns $1 million, then every ICN token will receive 1 cent. No costs are deducted during this period.
So these are the major investor return sources for ICONOMI. Remember, there is always the good 'ol speculation as well!
Check out the ICONOMI ICO here