Three ICOs Backed By Gold, Housing & Crypto

Source Crypto20 Web Site

By Michael Hooper

Some initial coin offerings are nothing more than an idea under development. Their message is "send us money, we will build a block chain with a network of new users over the next two years." That message won't be enough to attract a thoughtful investor.

I like a business with the ability to get funded and underway and making money in a short amount of time. I want a business plan that is self-sustaining, preferably with a history of proven results. I want to see a strong market behind a coin, people who appreciate the coin's opportunities and culture and are willing to pony up their own money to be a part of it. Owners usually make better caretakers. As a value investor, I want to see a hard asset behind the coin with experienced staff who know their market.

Here are three coins with hard assets behind their coins.

Crypto20

Crypto20, based in the Cayman Islands, is a closed-cap, tokenized cryptocurrency portfolio that autonomously tracks the top 20 cryptocurrencies with weekly rebalancing to a maximum component weight of 10%.

I like index investing. The core of my stock portfolio is 33% weighting of S&P500 because it is the dominant large cap stock index, with an excellent track record beating most fund managers.

Crypto20's maxium component weight of 10%, may limit performance in the fund with Bitcoin, the most dominant crypto currency at 54.6% dominance over all other crypto currencies, up from 47% dominance a month ago.

The CRYPTO20 team has completed the development of its trading system. The ICO funds (98%) will go towards purchasing the underlying assets. A small allocation (0.5%) is made for legal fees to ensure that CRYPTO20 is compliant with regulation upon commencement of exchange trading and a complete audit of received funds by a major auditing firm. CRYPTO20 and its cryptocurrency diversification value proposition will be heavily promoted to retail investors and a 1.5% allocation is made to facilitate this. Any unused funds from the 2% operating expense allocation will be utilized in a discretionary capacity once CRYPTO20 has commenced on-going trading. - 1.5% Continued Marketing Pre-Exchange Listing - 0.5% Legal Fees and Post-ICO Audit - 98% Underlying assets.

Crypto20 plans to raise $75 million in its ICO. The pre-sale generated $7.5 million. ICO runs through November 2017. Once the ICO is completed, an audit will be conducted. Once the audit is completed and made public, the management team will begin acquisition of coins for its Crypto20 coin index. The coin will be listed on exchanges in January 2018

The 0.50% annual fee will support the administration of the business.

There is a good interview with  Daniel Schwartzkopff, founder and CEO of Crypto20 here.

Schwartzkopff said the team is eight guys, with a fairly large advisory council.

Crypto20 is offering a rebalanced fund in a single token. There are thousands of coins, investors don't know where to start and make that decision. Too much to sift through, Schwartzkopff said. This is the best of old world financial system, the index, applied to cryptocurrencies. That gives investors some confidence that risk has been minimized.

"We're hoping to bring crypto currency investing to the mainstream," Schwartzkopff said.

He said Crypto20 is based in the Caymans mainly because the location is very popular for hedge funds, there is regulation to support that, lenient on taxes, this makes it easier to offer low fees, less expenses in running the fund.

OneGram

OneGram is a crypto currency that represents one gram of gold. OneGram founders, based in Dubai, saw an opportunity to liquify gold into a digital asset (OGC). OneGram is targeting Islamic finance community, who follow Sharia law. Gold is a prized and popular possession in that market. OneGram has a business plan that makes sense, with funding for sustainability and increasing the value of each OneGram coin over time.

Each OneGram transaction generates a 1% transaction fee, up to a maximum of 1 OGC, according to its White Paper. Unlike other cryptocurrencies, in OneGram, 70% of this fee is reinvested to buy more gold and increase the amount of gold that backs each token. As transaction volume increases, more gold gets added to the vault and all OneGram owners share in the profit. So, over time, the value of each OneGram rises by design. This makes OneGram a unique asset whose value increases perpetually. 25% of this fee will be used for development & Operations. 2.5% will be donated to Charities and 2.5% will reward miners (POS staking).

OneGram sold 12,400,786 coins in its ICO. Test network for OGC transactions will take place in January. OGC wallets also will debut in January. OGC will be distributed to owners and listed on popular crypto currency exchanges in January.

ICO participants paid gold spot price plus 10% for each OneGram. The 10% premium is being used to develop the business plan. The worst downsize for investors is the loss of their 10% premium. But it is possible the OGC coin will trade above the spot price of gold. Investors will see an increase in the value of the coin as transaction fee revenue is used to buy more gold in the future.

KexCoin

KexCoin uses blockchain technology to operate a student housing investment business. KexGill Group, a UK owner of student housing in England and Germany, is partner and manager in this project. KexCoin investors will benefit from KexCoin's strategy of buying back coin from rental profits, thus increasing the value of the outstanding coin. The group estimates returns of 8%-15% in the student housing market.

Disclosure: The author does not own any of the coins featured in this article and has no plans to purchase them. He owns Bitcoin, Ethereum and Ripple.