A look at the worlds first decentralized Hedgefund
First off, when people ask, is this a ponzi/pyramid scheme, they are really asking:
“Are real money coming in to sustain the company and all of its investors or are the money solely provided by the investors and redistributed?”
To answer this question we got to answer the question of how Monkey Capital is planning to grow the money provided by investors, as well as how they plan to distribute the capital-gains amongst its shareholders. So, let’s get into it.
First of all, when you read the whitepaper (which you should do first), you will see a specific plan laid out for the initial investments Monkey Capital will be making upon successful funding. Hedge funds are no new concept, as they are very appealing to high net worth investors due to their access to great deals and a broad investment portfolio, managed by people specializing in identifying undervalued buy options and turning these into a nice profit. The only thing Monkey Capital is doing differently in this regard is opening up this market for everyone, effectively democratizing the access to deals previously reserved for the few.
Now you might say, well, that’s all great, but how do I know they are going to execute on these deals? Well, how do you know your bank isn’t using money for bad trades? The biggest reason is Trust. We build and break trust trough past achievements and current actions, so the question is really:
“Can you trust in the competencies of monkey capital and have they shown us any work which might convince us that they are actively building the investment portfolio?”
To date, even before ICO launch, the team have already:
- Bought a majority share in the profitable company DDF (Digital Developers Fund), which specializes in structured investments into digital assets such as crypto-currencies and domain names (ENS incl.). The company will be renamed to Monkey Ventures and be added to the value-network of Monkey Capital. DDF press release (https://www.digitaldevelopersfund.com/monkey-capital-and-digital-developers-fund-announce-strategic-investment-partnership/)
- Started registration under Rule506(c) of regulation D (Securities Act), to bring increased confidence to investors, having to operate under certain regulations.
- Launched successfully on the Waves platform where the network is located, as well as gotten accepted at coss.io – a profitably decentralized new approach to fiat/currency exchanges.
So, we have established that real work is going on to bring in new investments, hence delivering on the first critical factor of establishing future revenue streams for its shareholders. The question which remains is how revenue stream are distributed amongst the shareholders of the company. This is where the magic happens. Although monkey capital are not bringing any major advancements to the block-chain industry from a technical perspective, they are however bringing in major innovations when it comes to the creation of a profitable value-ecosystem which benefits and incentivizes investors accordingly. The value-system is created through the issuance of tokens via ICO’s, where every token could be viewed as the option to participate in the next great deal identified by Monkey Capital. As an investor in a particular ICO you might believe this to be a profitable move, but how much of the profits do you receive? To understand this you need to understand what we could call “the token family”.
Basically the token family consist of the underlying “embryo” token COE, which could be viewed as the currency of the entire value network, as well as the first ICO and also the first and only “parent” token MNY (Monkey Token). The Monkey Token (MNY) can have child-tokens, and these new tokens can have children of themselves. This in practice means that every new ICO/Investment/Portfolio, will be added to the value network as the most recent “child”.
So the MNY token is the only parent token. All other investments added later on will be child tokens, in practice meaning a new ICO and a new coin. These child tokens can have children of themselves, creating a hierarchy of investment incentive much like doing a – b – c etc. seed-rounds in traditional venture capital. So the earlier you take on the risk of getting behind the company and its investments, the greater your returns.
But what do I mean by you receiving more profits when joining the Monkey family early on? Let’s say you hold MNY and there are now 50 child tokens below. You will get a share of all their profits. Well, would that not incentivize people only to buy MNY? Yes, which would bring prices to a level where the new ICO is suddenly attractive, as they will have their own set of child tokens beneath them with their own revenue streams.
So, what is the role of COE in this? COE is the overarching Embryo token and also the value networks "currency". So imagine that one of the child tokens have a profit this term, 50% of that profit monkey capital will use to buy back COE from the open market, and 50% would be distributed back in the investment hierarchy as returns. In that regard creating a potentially limitless cycle of value creation without the need for investors to do anything else than backing the investments they believe in. By owning COE, MNY or any subsequent tokens you gain an ownership share in the profits generated for that asset and all subsequent investments as well, appreciating the fact that early investors take on more risk and therefore look for a larger upside.
So is this a Ponzi scheme? Well if Monkey Capital, which consists of a large set of public and accredited names, decides to throw all their hard work out the window, drop all partnerships and dismiss their large supportive community, all in the name of running away with some easy early seed round money, effectively leaving their career, innovative business, family and friends behind, well then I guess that’s where we come back to our initial point, trust. The truth is, you are not really guaranteed that your bank doesn’t crash, taking your money with it, as well as you are not guaranteed that Monkey Capital necessarily will succeed. But if you do your own research and come to the conclusion that this investment is within your personal risk/reward profile, and you believe in the business they are creating, well, then you may invest. One thing is for sure, if bitcoin and blockchain technology was about freeing and democratizing currency and cooperation, then I strongly believe in Monkey Capital being the right step in freeing value-flows from the few to the many. As they say, wealth is never destroyed, it is merely redistributed.
Let me know what you think and what you would like to hear more about.
Cryptoprophet