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mothercrypto-blog · 7 years ago

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Astronaut Capital invests in FIC Network (eFIC)

Overview

FIC network is a US-based company which is seeking to create a decentralized securities network that includes an array of different assets including bonds, loans and asset-backed securities.

FIC Network aims to improve upon traditional systems in the fixed income market by integrating blockchain, therefore hoping to reduce costs, operational friction and commercial risk while increasing transparency.

The main goals of the company can be broken down into the following:

• Allow companies to obtain loans, issue bonds and raise funding in fiat and crypto

• Allow lenders to securitize and sell loan portfolios

• Allow investors to invest in fixed income financial products

• Allow service providers such as auditors, lawyers and ratings agencies to carry out their tasks

Commercial & Technical Strategy

FIC Network is deploying a combination of on-chain and off-chain processes in their technical strategy.

The lenders originate the loan off-chain and thereafter list it on FIC Network. Investors are able to invest in the loans listed on FIC Network in fiat or crypto.

One of the key features of FIC Network is the development of Expected Cash Flow (ECF) financial asset, which allows investors to slice up the cash flow of the asset in multiple ways — by interest, principal and maturity. The ECFs are tokenized on the FIC network.

FIC Network has also detailed the lifecycle (refer above) of the multiple participants in the investment and lending process.

From a commercial perspective, FIC Network is focusing heavily on institutional players such as asset managers, investment banks, hedge funds, credit funds, insurance companies, family offices and corporations. Several institutions are already testing the platform.

Roadmap

The roadmap provided indicates deployment of Testnet in Q2 2018 and the launch of the FIC Network for loan trading (initial fixed income product) by end of 2018.

Relatively longer-term roadmap indicates cryptocurrency implementation and listing of other fixed income products and financial instruments.

Token Sale

FIC Network will be issuing 316,500,000 tokens under the ticker eFIC, which will be converted to FIC at a later date. The breakdown of the sale is as follows:

ICO participants: 50% of the funds are offered over various stages: Private, Presale and Public sale. Approximately 25% of the total sale is allocated to private sale and the remaining for presale and public sale, if required.

Reserves: 30% will be utilized for corporate needs (25% each year vesting over 4 years).

Company / Team: 20% will be utilized for team (25% each year from year 0–3 vesting over 3 years)

Token Use

FIC tokens have a two-fold role:

• Staking: eFIC tokens can be staked to carry out certain actions such as the creation of new financial instruments and the listing of new loans

• Fees: FIC tokens are used to pay fees and these tokens are spent and gone forever

As adoption of the network increases it is anticipated that supply will get tighter while the token value of eFIC appreciates.

Use of Proceeds

The use of proceeds indicates that the majority of the funds will be used for setting up the team (39%) and development (35%). The remaining is split across marketing/business development, legal and other services.

Team

The website and marketing material indicates that there are seven core team members split across operations, technology and product.

Arturs Ivanov: Arturs is the CEO of Factury Inc. (parent company of FIC network). His past experience has involved working with various industries including investment funds and the government. Arturs worked on problems and remedies in the predatory lending sector for his undergraduate thesis.

Alvar Soosaar: Alvar is a co-founder and COO of Factury Inc. Alvar has over 20 years of experience as an investor and most notably has managed a portfolio of $7.8 Billion of fixed income securities handling origination, structuring, monitoring of loans.

Aigars Staks: Aigars is a co-founder and FIC Network Architecture advisor. His background is in handling large scale IT projects and spent his early career in PwC and Microsoft

Advisors

There are five advisors in total listed in the whitepaper. Notable names include:

Jed McCaleb: CTO and co-founder of Stellar.org. Well known in cryptocurrency circles and been involved with Ripple and Stellar projects

George Popescu: Advisor to three ICOs, multiple start-ups and an entrepreneur. He is also the Editor-in-Chief of Lending Times, a media company in the P2P and online lending space

View the full report https://astronaut.docsend.com/view/fyysbiw

Previous investors

There are three notable VC firms and start-up accelerators backing FIC network:

Boost VC: leading accelerator for blockchain/crypto. Investments include Blockcypher, Etherscan, Coinbase and Polychain Capital

Bialla Venture Partners: early-stage VC firm along with an executive search firm specializing in the financial services space

Startupbootcamp Fintech NYC: leading Fintech accelerator

Strengths

The global credit and bond markets exceed equities volume and size substantially.

Current practices of credit/debt origination, sale and settlement are extremely fragmented in the traditional markets. In some instance, settlement for company bonds is still processed manually. FIC Network could create a very streamlined, efficient and cost-effective process to disrupt the market.

FIC Network is backed by several accelerators, VC’s and credible advisors. We anticipate the company will be well supported from an institutional perspective.

Deal structure of the offer is compelling. The hard-cap puts a ~$30m market capitalization on the company (depending on bonus inclusion).

The team has sufficient experience from both a commercial and technical perspective. The company has been in operation since 2014.

There are several institutions already experimenting with the platform.

Full testnet is expected Q1 2018 and already available for viewing.

Weaknesses

We anticipate some of the business development activities to be slow due to ever-changing licensing and regulation requirements. FIC Network will likely need to be registered in every jurisdiction it operates in which is generally a slow process.

Marketing and business development allocation is ~$2m if the hard-cap is reached. We expect that this might be quite low given the length of sales cycle.

With 13 out of 21 staff positions yet to be filled (including CTO, VP Engineering and VP Product), it may be difficult for FIC Network to stay on track of its ambitious roadmap.

Opportunities

The existing systems/infrastructure have a huge potential for improvement in terms of price, risk and transparency. FIC Network seems well positioned to capture at least a portion of this large market opportunity.

Multinational bank UBS estimate that clearing and settlement costs anywhere between $65b-$85b per annum. Banking and financial institutions have also been seeking ways to improve the process through blockchain.

Threats

The entire cryptocurrency ecosystem faces regulatory risk. However, due to the nature of the space that FIC Network is choosing to operate in (i.e. traditional and crypto-assets), the regulatory risk is further heightened.

FIC Network is choosing to compete in a space where the incumbents are well capitalized. If the incumbents choose to venture into this space, then FIC network will potentially face commercial risks

We identify several other companies/tokens that are seeking to pursue similar opportunities (albeit some in different verticals:

Ripple (XRP)

Polymath (POLY)

Blockex (DAXT)

Conclusion

Astronaut is attracted to FIC Network and believes that it is working towards disrupting one of the largest opportunities in the financial ecosystem.

For the reasons listed below, Astronaut is taking exposure to FIC Network:

The deal-structure is compelling with a small hard-cap and tight allocation

Market opportunity is significant, even if FIC Network are only able to secure a small number of major jurisdictions

The company have been in operation since 2014, showing a large amount of commitment and prior success in gaining the support of several accelerators and venture capital firms

While we don’t usually place a substantial amount of importance on company advisors, we believe that FIC network are supported by some leading personnel

While we are attracted to FIC Network and its ambitions, we do acknowledge the regulatory hurdles it may face. Given the nature of the ever-changing legal landscape, we would anticipate that some jurisdictions will be much harder to gain licensing than others. We highlight this as a potential risk prohibiting growth.

In light of the preceding, the Astronaut Investment Committee (IC) have agreed to take conservative exposure for the medium-term with the possibility of further investment during the presale and public sale phase of the ICO.

#astronaut #FIC #bitcoin #cryptocurrency

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mothercrypto-blog · 7 years ago

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FIC Network: A Cryptocurrency Fixed Income Market

The Crypto world never sleeps. Users are always on the lookout for the best platform to trade. The public has never been able to put their money directly into a technology that has so much potential but is still developing. Ultimately, crypto community is facing a series of big problems and each must be solved before the technology can be taken seriously.

FIC Network is a blockchain-based platform that will enable users to list, buy, and sell any type of crypto- or fiat-denominated fixed income financial instrument in a simple, inexpensive, transparent and secure way. FIC Network aims to accelerate global economic growth by enabling financial institutions, businesses, and individuals to lend and borrow crypto and fiat assets, and securitize crypto and fiat debt. By implementing blockchain, FIC Network expects to offer benefits to current fixed income investors over traditional fixed income securities markets, and all transactions made on FIC Network will be immutable, and users get to enjoy lower costs from the removal of intermediaries in their market. Users will also benefit from the speed of transaction settlement, as exchanges can be done in seconds as opposed to days or even weeks.

The primary new feature that FIC Network aims to bring to the fixed income securities market is the introduction of Expected Cash Flows (ECF) as tradeable repayment options. ECFs allow investors to slice the cash flows of the loans any way they want (by maturity, interest or principal portion, etc.). Therefore, they can select specific repayments across several loans to diversify risk or fine-tune their cash flow requirements to specific payout periods.

Download the latest version App today eDepository Alpha. Demo version v0.2.1 and immediately earn 30% BONUS on your first trade!

#FIC #cryptocurrency #bitcoin #income

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mothercrypto-blog · 7 years ago

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FIC Network (ICO): Fixed Income on the Blockchain

FIC Network is a decentralized fixed income securities network that enables the listing, exchange, and securitization of fixed income financial instruments. The platform is defined by an asset-agnostic, multi-currency distributed ledger and is designed to cultivate adoption by financial institutions. At a high level, FIC Network’s mission is to enable participants to source, buy and sell financial products in a simple, inexpensive, transparent and secure way. Should the platform develop as envisioned, it could ultimately broadly impact markets’ financial stability and resiliency.

After concluding an oversubscribed private sale that raised more than 3,500 ETH, FIC Network is now in the midst of its presale, with a public sale targeted for April 16. Employing a reasonable and conservative approach to questions of regulation, the FIC Network plans to file its raise with the SEC under a Regulation D exemption. Prospective investors may find it refreshing to discover a project that’s taken the effort to cross their t’s and dot their i’s from the beginning, especially a project operating at the intersection of the blockchain space’s regulatory uncertainty and opacity, and an industry known for its complex web of federal and state law.

Project Description

FIC Network is building a blockchain-based ecosystem that will facilitate the trading of institutional-grade fixed income products. The technology will ultimately allow users to list, buy, and sell any type of fixed income security, including: loans, bonds, collateralized loan obligations (CLOs), syndicated loans, asset-backed securities (ABS), credit default swaps (CDS), and futures. The platform will also support the cryptoasset equivalents of these aforementioned products, should user demand be sufficient.

While the platform may be opened to individuals in future iterations, FIC Network is initially focused on a core set of institutional users, namely asset managers, banks, family offices, fixed income funds, hedge funds, insurance companies, and investment banks. In addition, the platform will support corporate users who are looking to raise debt capital without the help of traditional corporate and investment banking partners. Finally, the project will also provide read-only access to auditors, law firms, rating agencies, valuation firms, and regulators, as these entities may benefit from direct platform access.

Product Description

FIC Network has taken a cue from early innovations in the U.S. bond market in its attempt to optimally structure the network’s underlying trading framework. Inspired by STRIPS, a fixed income security whose interest and principal portions have been separated, or “stripped” to allow for individual sale in secondary markets, FIC Network vies to redefine the mechanics typically utilized when diversifying exposure across a portfolio of borrowers. Traditionally, investors aggregate loan assets from many different borrowers (or obligors) into a single legal vehicle before parsing out ownership of the structure among investors. This pooling or securitization reduces investors’ exposure to any single borrower.

To clarify how such pooling reduces investors’ exposure, consider a pool of 20 loans of $5 each, a simple case where the asset pool is not divided into tranches tailored for varying levels of risk aversion, as is common with mortgage-backed securities. As a fixed income investor, one could purchase 10% of the portfolio, receiving 10% of the interest and principal paid by each of the underlying loan obligations. Conversely, were a borrower to default, the investor would lose 10% of the principal (and interest) expected from the defaulting $5 loan – a loss of at least 50 cents. This process, known as fractionalization, affords investors the benefit of diversification; without it, one unlucky investor would lose half of the principal she is owed, a loss that would drastically impact overall returns. While this system has significant benefits, as illustrated above, it has limitations: investors cannot customize their exposure. In order to facilitate granular customization across dimensions of time and obligor quality, FIC Network introduced a new concept, aptly named Expected Cash Flows (ECFs).

Despite some important differences that make ECFs particularly suitable for individual trading, ECFs are closely related to the incoming cash flows from a loan over time. Loan payments are typically defined by a date, an interest component, and a principal component, and all three may change after origination (in cases of restructuring, prepayment, late payment, etc.) A payment of this kind is therefore highly mutable and hard to predict. ECFs, on the other hand, are defined by a set location in the overall payment sequence and neither the amount nor the location ever change. While the questions of fulfillment and payment date remain, ECFs are simple, standardized and can be commingled irrespective of differences in the underlying financial instruments.

In addition, decoupling obligor payments from their standardized, tradable counterparts (a feature FIC Network calls “flexible granularity”) provides originators with flexibility and may also enhance privacy and liquidity. Since ECFs don’t need to correspond to actual payments, the originator can control the number, size and timing of ECFs. If ECFs matched the payment schedule precisely, the originator would inadvertently telegraph information about his or her business processes to competitors. With flexible granularity, however, this is countered as detailed loan information is only available on a permissioned basis. This ability to decouple payments and ECFs also allows an originator to break down a large, potentially illiquid payment into several smaller ECFs that may be easier for the market to digest. For these reasons, ECFs appear to be well-suited as both the basic building blocks of portfolio construction and as units of trade in global markets.

There are two primary ways to trade ECFs: 1) using the built-in exchange; and 2) using a bundled, inventory trading approach. The platform’s built-in exchange system is straightforward and is best suited for secondary market trading, offering enhanced liquidity and price discovery at the cost of relatively large required deposits and a risk of not selling all ECFs simultaneously. The bundled approach is most appropriate for trades in the primary market or large trades in the secondary market and involves creating an inventory account to house the group of ECFs that will be traded as a unit. Using this approach, the seller fields incoming bids from potential buyers, using a timed locking feature to efficiently and securely close the transaction with the selected bidder. Using this method, traders can efficiently sell large batches of ECFs at constant technical costs and in an all-or-nothing manner. Yet the method may be less attractive from the perspectives of liquidity and price discovery as many buyers may prefer to layer on exposures incrementally, implying a potential for reduced demand for large batch orders.

For sophisticated investment managers looking to immunize their portfolios against sensitivity to movement in underlying interest rates, the ability to purchase or sell cash flows with such specificity, e.g., a single cash flow or a set of cash flows that occur once a year in a particular month, represents a novel approach to fixed income portfolio construction. This low-cost, low-friction method of trading and portfolio construction could eventually become industry standard should enough participants join the platform, fostering a marketplace with critical mass and diversity.

In addition to plans to periodically audit the network and KYC performed at the time of onboarding by Factury Inc., the company behind the platform itself, FIC Network has also introduced a somewhat novel approach to quantify and track credit risk and originator quality. While the project founders would no doubt stress the importance that investors perform their own credit analyses, the platform tracks a ratio called the Borrower’s Expected Repayment Rate (BERR) to allow for the comparison of obligors across different types of assets and time horizons. The ratio is calculated as the sum of expected principal, interest, and fee income, divided by initial principal. When quoted on a percentage basis, the calculation could be anywhere from 0% to 200% or greater, with higher values corresponding to more favorable anticipated returns. After the loan matures or the obligor defaults, the ratio is recalculated using the actual principal, interest, and fees collected. These two figures are then compared and aggregated across all transactions for a given originator, thus establishing a quantitative measure of an originator’s ability to predict obligor repayments. This measure of an originator’s prediction accuracy will be tracked via FIC Network’s immutable ledger and should encourage originators to be as accurate as possible when publishing BERR figures.

What is the Significance of Blockchain Tech?

FIC Network technically uses its own distributed ledger (or blockchain), although the ledger is substantially based on the Stellar Consensus Protocol (SCP). FIC Network’s selection of SCP as its protocol muse comes as no surprise as Stellar represents a genuine innovation in the consensus mechanism space (and is modeled as a Federated Byzantine Agreement). Standard Byzantine Agreement solutions are centralized; however, SCP utilizes the mechanism in a distributed manner. While the use of distributed consensus is not an innovation per se, most cryptocurrency protocols in production rely on all nodes trusting other nodes that solve hash puzzles (Proof of Work) or that hold currency (Proof of Stake). In SCP, each node is free to select a set of nodes that it trusts and define conditions under which it agrees with statements the nodes make. In other words, a given node doesn’t need to listen to the entire network; rather, it defines a “quorum slice” – a subset of nodes within the network that it trusts. When enough nodes in this quorum slice agree on a statement, the node itself will agree. In aggregate, this system creates an interlocking set of agreement dependencies that allow the network to reach consensus very quickly.

FIC Network has not modified the fundamental Stellar protocol, and has instead defined certain special features that allow the objects to effectively represent financial instruments and network participants (i.e., loans, bonds, users, etc.). FIC Network’s implementation of the SCP also adds a semantic layer on top by defining the term “verified entity,” which could be a Gateway, a Regulator, or Factury Inc. Factury participates on the network as a participant holding consensus slices with all verified entities. The rest of the distributed network participants are required to have a pre-defined, minimal set of other nodes and verified entities in their quorum slices. In theory, this generates a fully interconnected network with flexible trust, low latency and largely decentralized control.

The Stellar network relies on entities called Anchors to facilitate asset exchange operations. Anchors can issue assets on the network – an Anchor might accept BTC credits and provide BTC in exchange, and vice-versa. Individual network users can elect to trust specific Anchors by creating a Trustline that links their own account to an Anchor. The FIC Network utilizes a very similar approach, instead referring to Anchors as Gateways. Similar to the Stellar network’s procedure, Gateways are the only type of user that can issue currency tokens on the FIC Network and register them in the shared ledger. A user may only transact with a Gateway after the user indicates trust by establishing a Trustline to the Gateway.

In conjunction with the distributed ledger, this network of Trustlines facilitates rapid settlement between buyers and sellers, even in instances involving multiple intermediate Gateways (when several layers of currency conversion may be required). Once a trade has been initiated and accepted by parties involved via the SCP verification process, the trade automatically clears and is written to the ledger. This allows applications on the FIC Network to focus on transmitting relevant information on a permissioned, P2P basis, while relying on the FIC ledger for verifying and settling trades. While this process does not necessarily require mining or staking, FIC Network has included a staking requirement overlay in its reimagined, SCP-based ecosystem.

Token Economy and Investment Thesis

Use of the FIC Network is subject to a reasonably elaborate system of FIC-denominated deposits and fees based on specific user actions. For example, originators will need to stake 123 tokens for as long as their account is in use – at the ICO price of 10 cents per token, that translates into $12.30. Similarly, originators must deposit 10 FIC tokens for each ECF created on the platform; deposit (or stake) amounts are returned when the action is completed, i.e., when the ECF is sold. While fees are also assessed for all major actions executed on the platform, the amounts appear to be low in most cases (absent an astronomical price increase in FIC): 0.00001 tokens per ECF sold, 0.00004 to bid on a loan, etc.

An evaluation of likely token price drivers helps assuage concerns that simultaneously pricing services in tokens while restricting platform access to those staking tokens will produce increased volatility: as there will be approximately one signer, one metadata file, and many ECFs for any given financial instrument – and many more financial instruments than user accounts – the aggregate deposit amount will be closely tied to the number of ECFs currently owned on the platform. As more FIC Network tokens become locked as deposits in a scenario where network usage increases significantly, FIC prices could rise, increasing the fiat price of individual fees. These increased FIC prices may in turn encourage users to create loans with fewer, and thus larger, ECFs in an effort to minimize fees. The effect would be to slow aggregate growth in ECFs on the network. On balance however, any resulting decline in the rate of newly-created ECFs would likely be dampened by the increase in both platform users and ECFs that would have been necessary to increase the token price in the first place. While it is challenging to predict the precise interplay between these opposing forces relative to token prices, it is reasonable to assume that the network benefits from a mechanism that should reduce the occurrence of wild swings in token price, particularly once the platform has obtained a broad constituency of originators and investors.

Not unlike Winding Tree, an open-source, decentralized, wholesale-level inventory distribution platform for the travel industry, FIC Network is implementing a monetization strategy obviating the business’ reliance on platform access fees. Our discussion with FIC Network’s CEO revealed that fees won’t go to the company behind the platform, and will instead be immediately burned. To counteract the reduced token supply, the network will mint new tokens annually in an amount that will precisely offset fees generated, distributing the newly minted FIC to existing holders (both individual users and node operators) on a pro rata basis, as approved by the user network. While this would prohibit FIC Network from profiting from the payment of fees directly, the company’s long-term view calls for generating revenue via monetizing specialized applications that help institutional users build portfolios, evaluate obligors, and otherwise benefit from the platform. Furthermore, the proposed compensation format seemingly aligns user, company, and token holder incentives reasonably well, since team allocations from the token sale of 20% vest over a 3-year period and any additional company compensation is only possible in the case of a thriving FIC Network ecosystem where the sale of specialized applications proves profitable.

Timeline and Project Status

FIC Network launched its Testnet and Alpha version of the platform in Q3 2017. Anticipated by Q4 2018, the first iteration in production on Mainnet is expected to support mortgage trading. The first iteration allows originators and investors to trade whole mortgages, without the ability to purchase individual ECFs. While the team doesn’t have a detailed, publicly available roadmap for future platform deliverables for regulatory reasons, Smith + Crown understands that FIC Network plans to launch the network and app by Q4 2018, with hopes to launch individual ECF and corporate bond trading at some point during 2019.

Organization Status

Having initially conceived the concept for a blockchain-based secondary loan market in February 2016, Factury Inc. received investment from Startupbootcamp in March 2016 and was asked to join the firm’s New York City-based fintech accelerator. Later that year, Factury received investment from Boost VC’s Silicon Valley accelerator, subsequently securing seed funding from Bialla Venture Partners in February 2017.

Backed by multiple prominent fintech VCs, FIC Network clearly has caught the venture community’s eye. Investment from Boost VC in particular, a highly-regarded accelerator in the blockchain space that has invested in landmark projects such as IPFS, Etherscan, Tezos, and Coinbase as early as 2012, suggest that Boost envisions significant institutional demand for the platform.

FIC Network is also partnering with Ismail Malik, an ICO strategist and the chairman of Blockchain Lab in London. Acting as a specialized crypto development project partner for existing digital ledger technology projects, the Lab has focused on researching secure, embedded smart contract-trusted execution environments on the Ethereum, Bitcoin and Corda blockchains. Although perhaps slightly less impactful, FIC Network is also partnering with Civic to streamline its identification and KYC process, further demonstrating the project’s comfort collaborating with external parties.

Of the long list of projects seeking to create some form of financial exchange, a majority have clearly focused on the relatively lucrative ERC-20 token trading space (see below chart illustrating the magnitude of exchange ICOs over time). While some projects (Jibrel Network, Wanchain, Polymath and BlockEx, to name a few) have sought to tackle the challenge of bringing traditional assets on chain, it appears that the industry is still in the first inning of development, with substantial work remaining in guaranteeing regulatory compliance and finalizing technical buildout. Other projects, such as ETH Lend and Lendingblock, have also taken a foray into the world of fixed income, but they appear to be focused exclusively on instruments with cryptoasset underlyings, and are therefore targeting crypto investors only rather than traditional Wall Street fixed income traders.

When asked, FIC Network indicated that it considers Polymath and BlockEx as primary competitors. For purposes of comparison, BlockEx’s wide-ranging ambitions include acquiring regulatory approval, the ability to vet all projects prior to hosting ICOs on the platform, and ultimately to develop a highly liquid platform supporting the trading of fixed income instruments such as bonds and mortgages. Polymath, however, appears focused on the trading of securities tokens backed by equity, venture capital, and real estate. The co-existence of these three players is not in jeopardy for the time being, as one can reasonably conclude given FIC Network’s clear near-term focus on initiating an institutional-grade fixed income marketplace.

Team Description

FIC Network’s team appears to be adequately robust to execute the project’s fundamental objectives. The project is led by CEO Arturs Ivanovs, a marketing executive and project manager turned blockchain enthusiast with a background in law, economics and fintech regulation. Joining him at the helm is Co-founder and COO Alvar Soosaar, a seasoned venture capital and fixed income investor. Alvar has nearly a decade of experience on the fixed income side, having previously managed a $7.8 billion portfolio of fixed income securities where he handled origination, structuring, monitoring and workout efforts.

The project has hired several veteran developers with experience ranging from blockchain tech, to enterprise network architecture, to theoretical quantum nanoelectronics. Two developers have even received accolades from the International Mathematical Olympiads, and all team members have experience either founding or working for startup companies.

FIC Network will release a preliminary ERC-20 token on the Ethereum blockchain, called eFIC. At such time that the production-level FIC blockchain is launched (likely later in 2018), token holders will be able to convert eFIC tokens to FICN tokens (and all eFIC tokens will be destroyed). FIC Network plans to issue 200 billion FICN tokens; eFIC token holders will receive FICN tokens in proportion to their respective eFIC holdings.

Of the 316.5 million tokens created, 50% will be distributed to the public, 20% will be retained by the team, and 30% will be placed in reserve. The reserve will be deployed primarily to encourage platform adoption, likely in the form of discounts given to key institutional target market prospects such as large banks and asset managers. (Tokens allocated to team members are subject to a 3-year vesting period).

While some may be daunted by the challenge of penetrating the well-established institutional fixed income market, others may see a need to reduce reliance on centralized intermediaries and create infrastructure for the next generation of cryptoasset-based fixed income instruments. As an effective first-mover in the space – given the project’s laser-like focus on fiat-denominated fixed income specifically – FIC Network is uniquely positioned to capitalize on the next generation of fixed income trading.

It is fairly straightforward to appreciate many of the benefits of a secure, fully-digitized system with granular, cash flow-level data from the perspective of a loan originator or portfolio manager: one can easily understand both aggregate and net exposures across a multitude of dimensions and fine-tune portfolios accordingly. Furthermore, the decentralized nature of the network can help eliminate some of the inherent drawbacks present in current systems in terms of friction, lack of interoperability, asymmetry of information and operational risks. The platform also simplifies trading across multiple sets of currency pairs, utilizing Stellar’s Trustline concept to facilitate global and cryptoasset-denominated trading. What’s more, the FIC Network will support rapid settlement, on the order of a few seconds, in comparison to the three days that are required using traditional methods.

In fact, the exceptional transparency of FIC Network may have more altruistic applications even still. In a scenario where the platform observes widespread adoption, the resulting database of detailed cash flow, obligor and investor financial exposures could be utilized by regulators to obtain an accurate picture of underlying financial interconnectedness. In an age where global financial institutions operate without borders and outstanding derivatives exposures exceed $1 quadrillion, FIC Network’s platform may offer a way to simplify the complexities of a financial system that seemingly has a mind of its own.

In The Road to Ruin, James Rickards explains that the prevailing risk models typically used by Wall Street produce consistently weak forecasts because they assume financial markets are an equilibrium system, as opposed to the complex adaptive or critical state systems that they truly represent. As such, these approaches are insufficient and will likely fail to protect us from the next great market decline.

In an effort to predict such an event without relying on these fundamentally flawed theories, Rickards applies Bayesian statistical techniques and complexity theory to the study of the global financial system. While many economists reject Bayesian probability because of the need to “guess” initial outcomes, the fact remains that it is the most effective way to solve a problem in the absence of having enough initial data to meet the demands of classical statistics. In fact, Rickards points out that Bayesian approaches are used extensively by agencies such as the CIA and the Los Alamos National Laboratory. When your job is to predict the next terrorist attack, you can’t wait for twenty more attacks to build up your dataset! He concludes that the best way to truly understand the level of our financial precariousness (and to be well-positioned to effectively combat any impending crisis) is to digitize and document derivative exposures held at major banking institutions, creating a single, global, machine-readable database of fixed income and derivative securities. While FIC Network is surely far off from such a feat, it is comforting to know that there are some projects underway that may end up pointing us in the right direction.

Clearly, FIC Network has identified several meaningful ways to improve upon existing methods of fixed income trading, irrespective of its ability to significantly influence the development of one of the world’s largest markets. While speed, transparency, cost, and security benefits can be immediately realized as the project’s loan operations come online, facilitating the creation of large, institutional-grade asset-backed structures will take some time. However, to the extent FIC Network’s loan offering proves successful, it is logical that the creation of these more complex and expensive structures would be within reach. Only then would users begin to truly benefit from all that the project has to offer, as the cost of securitization operations are reduced substantially through the removal of expensive trustee, auditor, clearinghouse, and SPV intermediaries.

Official Resources

Website

Whitepaper

Sale terms

Participation instructions

Blog

Twitter

#FIC #BlockChain #income #bitcoin

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mothercrypto-blog · 7 years ago

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FIC Network ICO Review – Fixed Income for Blockchain Assets

Summary

Project name: FIC Network

Token symbol: eFIC

Website: https://ficnetwork.com/en

White paper: https://drive.google.com/file/d/0ByzKCCWTHkioZzRhTThXSi0zcWM/view

Hard cap: $16 million (ICO Participants receive 50% of total token supply)

Conversion rate: 1 eFIC = $0.10

Maximum market cap at ICO on a fully diluted basis: $32 million

Bonus structure: Private sale received 60% bonus, presale receives 30% bonus

Presale or white list: Presale ongoing, whitelist here: https://ficnetwork.com/en/token

Blockchain platform: Its own blockchain based on a Stellar fork

Countries excluded: Presale for US accredited investors only, public sale TBA

Timeline: Presale ongoing, public sale begins April 16, 2018 (Please refer to FIC Network’s website for the most up-to-date information)

Token distribution date: After public sale

Project Overview

What does the company/project do?

FIC Network is a decentralized fixed income securities network that enables the listing, exchange, and securitization of fixed income financial instruments including corporate bonds, syndicated loans, asset-backed securities, and more. By implementing blockchain, FIC Network expects to offer benefits to current fixed income investors over traditional fixed income securities markets listed below. Transactions made on FIC Network will be immutable, and users will also enjoy lower costs from the removal of intermediaries in their market. Users will also benefit from the speed of transaction settlement, as exchanges can be done in seconds as opposed to days or even weeks. The primary new feature that FIC Network aims to bring to the fixed income securities market is the introduction of Expected Cash Flows (ECF) as tradeable repayment options. ECFs allow investors to slice the cash flows of the loans any way they want (by maturity, interest or principal portion, etc.). Therefore, they can select specific repayments across several loans to diversify risk or fine-tune their cash flow requirements to specific payout periods. The diagram below shows how FIC Network functions in a nutshell:

As shown in the diagram above, lenders would first need to originate a loan before it can be listed on FIC Network. Investors will then invest fiat or crypto into the loans listed on the exchange. The ECFs are initially tokenized on the FIC Network, but the plan is to be able to trade the ECFs on other platforms in the future.

How advanced is the project?

Factury, the company behind FIC Network, was founded in 2016 and started building out the core team in Q1 2017. It is headquartered in New York City and has an office in Latvia. It has received funding from three institutional investors: Boost VC, Startupbootcamp Fintech NYC, and Bialla Venture Partners. In Q3 2017, the testnet and Alpha version of the platform was launched. Currently, a few institutions are testing the platform. The demo can be downloaded here. Below are screenshots of the demo:

Here is a summary of their roadmap:

Q1 2018

Test with Network Participants on Testnet

2019

Cryptocurrency implementation

Implementing the ability to trade single ECF separately

Listing and trading of corporate bonds

2020

Listing and trading of other financial instruments

What are the tokens used for and how can token value appreciate?

eFIC tokens are used in order to publish financial instruments as well as bid for ECFs on FIC Network. For certain actions (creating firms/users, listing loans, etc.), staking tokens are required while for other actions (sell whole loans), eFIC tokens will be spent and gone forever. eFIC has a fixed supply, so as usage of FIC Network grows, demand for eFIC increases which can lead to an increase in the price of eFIC tokens. As more users and lenders exchange financial instruments on FIC Network, the price of eFIC should appreciate.

Team

The core FIC Network team consists of 9 members. The bios of key team members are listed below: Arturs Ivanovs, CEO and Co-Founder – Ex-Marketing executive and senior project manager at Porter Novelli Latvia, Advisor to Turing Funds, previously worked at Latvia’s Ministry of Economy. Holds LLB in Law and Business from Riga Graduate School of Law. Alvar Soosar, COO and Co-Founder – 20+ years of experience as an investor, Managing Director and Co-founder of Fisher Row Capital, previously managed a $7.8 billion portfolio of fixed income securities, MBA from University of Oxford. Aigar Staks, Senior FIC Network Architecture Advisor and Co-Founder– Managing Director of Agile & CO, previously worked as a Strategy Consultant at Microsoft and was a Senior Consultant at PWC. M.SC. in Computer Science. MBA from Riga Business School-University of Buffalo joint program. FIC Network’s advisors include: Matiss Ansviesulis, Co-Founder and CEO of Creamfinance, Jon Chou, Co-Founder and CEO of Bee Token, Ismail Malik, Chairman of Blockchain Lab, as well as others.

Opportunities

The credit market is huge. It is not as much talked about as the equity (stock) market but it is actually bigger. According to The Motley Fool, the global bond market beats the stock market in both size ($100 trillion vs. $64 trillion) and daily trading volume ($700 billion vs. $200 billion).

We believe tokenization of credit instruments is just as viable as equity securities. FIC Network has the first mover advantage in this huge market.

FIC Network has attracted 3 institutional investors, meaning that the company/team has passed the scrutiny of these investors.

The company is showing good business traction with multiple institutions already testing out the Alpha.

The team and advisors are solid with a balanced mix between entrepreneurs, finance executives who can help drive adoption of the platform, and developers.

Concerns

As bonds are securities, transactions around the underlying cash flow are also subject to regulations, which differ country by country. FIC Network needs to comply with each country that it operates in, so this could make expanding the platform and driving more users/bond listings slower than planned.

Conclusion

Overall, we like both the flipping and long-term potential of this ICO. Our thoughts on buying the tokens for flipping and investing for the long term are as follows: For flipping Good. The idea, team and advisors, token metrics, and development progress are all outstanding. We believe the hard cap is very compelling for the idea. The bonus amount is up to 60% which looks high in the first glance, but (1) it is only for less than 20% of the hard cap, and (2) public presale has 30% bonus, which effectively nets out the private presale bonus to 23%. For long-term holding Good. Security token is believed to be (one of) the next big thing coming to crypto. It has the potential to catapult the overall cryptocurrency market size exponentially because basically every asset (stocks, real estate, commodities, bonds, etc.) can be tokenized. However, the market is paying all the attention to the equity side (giving token holders the same rights as equity holders). Tzero, which is backed by Overstock, is in the process of raising $250 million, and Polymath has a market cap of $168 million. Very little (if any) attention is paid to the credit side, even though the credit market is actually bigger than the equity market. FIC Network has been in the works since 2016 – it has been a blockchain company from day 1. It has a first mover advantage with less competition compared to the equity side. Therefore, we believe it has a good chance to succeed. We believe the upside is tremendous and fits well with the overall trend of where cryptocurrency is going.

For more information about the ICO, please visit the following links:

Website: https://ficnetwork.com/en/

Whitepaper: https://drive.google.com/file/d/0ByzKCCWTHkioZzRhTThXSi0zcWM/view

Blog: https://medium.com/@ficnetwork

Telegram: https://t.me/ficnetwork/

Twitter: https://twitter.com/ficnetwork

* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.

#FIC #ICO #blockchain #income #bitcoin

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mothercrypto-blog · 7 years ago

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IC Network (ICO): Fixed Income on the Blockchain

FIC Network is an institutionally-focused blockchain-based platform that will enable users to list, buy, and sell any type of crypto- or fiat-denominated fixed income financial instrument.

Project Description

Product Description

What is the Significance of Blockchain Tech?

Token Economy and Investment Thesis

Timeline and Project Status

Organization Status

Peers and Competitors

Team Description

Project Details

Token and Sale Details

Prospects and Challenges

Official Resources

Website

Whitepaper

Sale terms

Participation instructions

Blog

Twitter

#ICO #cryptocurrency #Income #bit #bitcoin

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mothercrypto-blog · 7 years ago

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ICO Analysis: FIC Network

FIC Network is a blockchain-based fixed income securities model that reduces costs, operational friction, and risks while improving auditing ability and transparency for the industry. It will allow users to list, buy, and sell any type of crypto or fiat fixed income financial instrument including loans, bonds, collateralized loan obligations, loan syndication, credit default swaps and futures. FIC Network will also allow companies to raise funding by issuing bonds denominated in crypto or fiat.

The FIC Network seeks to improve upon the existing traditional systems by boosting transparency, speed, asset liquidity and security, as well as reducing costs, operational friction and risks. The FIC network will cover every financial instrument in the fixed income space, starting with consumer and business loans, followed by bonds, structured products and other financial instruments. FIC Network will accommodate any type of currency, including cryptocurrencies, and financial instrument.The technology is scalable to the global fixed income and debt markets, which exceed $230 trillion USD.

Token

The eFIC token is an ERC20 utility token that will be used to trade, list, and hold financial instruments on the platform. eFIC will also prevent network spam and denial of service attacks. eFIC tokens will later be converted to FIC tokens after the launch of their production-level FIC blockchain later in 2018.

The presale is currently ongoing through May 7, 2018, including a 30% bonus with a minimum investment of 10 ETH. The crowdsale starts May 7, 2018, and runs through May 15, 2018. The hard cap is $16 million USD with 316,500,000 eFIC tokens available for purchase at a price of $0.10 USD per token. All unsold eFIC tokens and unclaimed bonuses will be burned after completion of the public sale. FIC Network has partnered with Civic to be their KYC provider for the token sale.

The token distribution is as follows:

50% Token Sale 316,500,000 eFIC

30% Reserves (locked) 160,000,000 eFIC

20% Team (locked) 156,500,000 eFIC

Token

The token distribution is as follows:

50% Token Sale 316,500,000 eFIC

30% Reserves (locked) 160,000,000 eFIC

20% Team (locked) 156,500,000 eFIC

Team

The FIC Network team consist of experienced executives, blockchain developers and experts in startups, marketing and investments. Their website lists a core team of nine members and eight advisers. Arturs Ivanovs is Founder & CEO of FIC Network as well as an adviser to Turing Funds, the first mainstream exchange-traded fund of cryptocurrencies. Aigars Staks is Co-founder & Senior FIC Network Architecture Adviser who brings valuable experience from working with companies such as Microsoft and PwC.

Advises include Matiss Ansviesulis, who is the Founder and CEO of Creamfinance, which according to Inc. magazine, was the fastest-growing fintech company in 2016. Jon Chou is the Co-founder & CEO of Bee Token as well as an advisor to Solve.Care.

Verdict

Combining the crypto and fiat fixed income market will help make the future crypto market mainstream and sustainable. Existing crypto tokens are operating as currencies or utilities without a fixed-income offering. A crypto and fiat fixed income market can sustainably drive the crypto market into mainstream usage better than the conventionally fixed income market. FIC’s blockchain-based platform will allow users to list, buy and sell any type of crypto or fiat fixed financial instruments avoiding the drawbacks of conventionally fixed income markets such as friction, lack of liquidity, lack of interoperability, asymmetry of information and operational risks. A multi-currency asset agnostic system with a built-in exchange allows users to operate in currencies of their preference, thus eliminating exposure to exchange rate risk and simplifies accounting.

Risks

The FIC Network and app aren’t scheduled to be launched until Q4 2018. While Q4 isn’t too far in the future, many ICOs have over-promised and under-delivered when it comes to their roadmap progress after ICO completion. -1

As with many ICOs, the majority of the team has outside obligations which result in time being spent elsewhere and not 100% focused on the success of the project. -1

Regulations for cryptocurrencies are still undetermined and the outcome on how they will affect ICOs’ dealing with securities, such as FIC Network, is unknown. –1

Growth Potential

FIC Network has an MVP – distributed app (dApp) eDepository, which has already been developed and deployed on their Test Network. It allows publishing and managing assets on the blockchain network. +3

The team has the right mixture of talent and experience to bring this project to fruition as well as multiple advisers and venture capital backing. +3

Token metrics are an extremely important aspect that investors research to determine if an ICO is worthy of investment. A fairly low hard cap of $16 million USD, 50% of tokens being sold during the token sale, and a fixed supply are considered positives. +3

Disposition

With the uncertainty of this market, some investors may choose to remain on the sidelines. However, with the profit potential in this incredibly large market, those that take the plunge could end up with excellent returns if all goes according to plan. FIC Network receives a rating of 6 out of 10.

Investment Details

Symbol: eFIC

Platform: Ethereum

Presale: Current – May 7, 2018 (30% Bonus, min investment 10 ETH)

Crowdsale Date: May 7, 2018 – May 15, 2018

Hard Cap: $16M USD

Token Price: $0.10 USD

Tokens for Sale: 316,500,000 eFIC

Payments Accepted: ETH

#cryptocurrency #ethereum #ICO #Bitcoin #FIC

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