[ANN] Indicium Series A

PeerAssets Indicium
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IndiciumDarkBanner.png2792Ɨ860 63.1 KB

Indicium is a financially driven token-issuance DAC built using PeerAssets, hosted on the Peercoin blockchain. It will form algorithmically chosen indices and baskets of cryptocurrencies and issue assets corresponding to the value of these baskets. Peercoin dividends and voting rights will be given to Indicium (IND) holders as a representation of ownership in the DAC. A federated approach will be taken, where a group of founders or a board of directors will perform managerial duties to facilitate operation.

A full business outline can be downloaded here. (333.6 KB)

##Series A Investment Details
Start date: Fri, 14.04.2017 00:01 UTC
End date: Wed, 24.05.2017 23:59 UTC

Accepted currencies: PPC and BTC

Funds will be held in multisig reserve until all three founders (Fractals, Nagalim, and Mhps) come to consensus on how funds are to be spent. All of these funds are to be used for realization of the Indicium business proposal and at the discretion of the token holders.

3-of-5 Multisig Participants: @Nagalim, @Mhps, @Peerchemist, @Saeveritt, @Backpacker69

Minimum Series A Funding Goal: $50,000
Maximum Series A Funding Limit: $250,000

The Indicium price will be formed after the conclusion of series A funding based on the submitted bids. If the maximum funding limit is reached no further bids will be accepted (first come, first serve). All series A tokens will be awarded at the same concluding price.

If the minimum goal is not reached all funds submitted in bids will be returned to their sender or the address in the first input to the transaction in question if a sender cannot be identified.

Total Initial Indicium Distribution: 100k Series A: 50k Series B: 40k Founding: 7.5k PA advisors: 1.5k Organizer: 0.5k Reserved: 0.5k

To place a bid in Series A funding please message the @Indicium account on the Peercoin forum (https://talk.peercoin.net) with a cryptocurrency amount to be sent (minimum 0.4 BTC and/or 500 PPC), and a Peercoin address that you own to award the IND to. Currency conversion prices will be chosen at 23:59 UTC on Wed, 24.05.17 when Series A funding closes.

Please wait for confirmation for your bid from the @Indicium account via private message before sending anything to the following multisig addresses:

PPC: pA3NKquAb6c2wPvUGfrJYmP2mZDM7sGmFj
BTC: 38nfHH889UxL1MRBmS8hJh23bbXyNf9Hma

Bids may be rejected at the discretion of the founders or multisig participants.

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Current social media announcements. We will do r/cryptocurrency tomorrow morning, so please try to be around for that.





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I see you plan to incorporate as a LLC.

Is it safe to assume that this fund will be based in the USA and itā€™s regulations?

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Whether you do a market cap weighting or minimal variance weighting, the index will need to get a lot of good, reliable data from somewhere. I couldnā€™t find how this is done in the white paper. Is this with CMC? Entirely with CMC? If so, does CMC meet the critical requirement for being a reliable source? Is the data it pulls from exchanges reliable? Hasnā€™t data at CMC been manipulated in the past? What if the CMC website is hacked or compromised in some way? Is it reasonable to assume that the alt-coin market is so thin and immature that prices/caps are largely manipulated by traders rather than reflecting the underlying fundamentals of a particular coin?

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White paper states ā€œincorporated in Europeā€. In the US, an LLC is a limited liability company. Incorporation is not the same as an LLC.

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Ah yes. Found it hidden on page 13.
Thatā€™s raising even more questions from me.

Inside the European Union? Outside the European Union? If inside, will the fund get a proper licence?

Which US state law will apply for the LLC?
How is the LLC corporation design supposed to look? Will there be an official US office for the LLC which handles subsidiaries in ā€œEuropeā€?

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In the US, a company is an LLC or a C-corp (incorporated). One or the other, canā€™t be both. There are significant differences in structure, owner rights, legal, taxation, etc. There are, of course, other ways to organize a company, but those two are the most common.

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I would also think that if Indicium is doing an ICO ā€“ which this appears to be ā€“ that theyā€™d want a minimal or non-existent public profile. Situation may be different in Europe. Being able to link an ICO with real people and a company address is probably asking for trouble in the US. I think itā€™s inevitable that the SEC will start scrutinizing the ICO market, given the amount of money it has attracted in the past year.

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References to incorporation in this document were in error and we are doing our best to get it corrected asap. There is a plan to legalize the business in Europe if both series A and minimum viable product goes well. Inquires have been made and contacts established but for now we refrain from further comments.

It may be better to think of this more as a fundraiser with a token offering than an ICO.

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In that case youā€™re planning an mvp that does not involve active trading to avoid summoning loads of regulations?

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The mvp will not involve customer funds, correct. It will involve real trades for active testing of the product.

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Even with own capital a potential regulation trigger.
Given the uncertainty for projects like yours inside EU legislation I hope your costs for legal advice wonā€™t explode.

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Trading on most exchanges using personal funds requires basic liscencing or know your customer procedures. We do not expect this to be a substantial issue.

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All I can do is assume for now, as I donā€™t know some of the nitty-gritty parts of your business plan that might be relevant to get a full picture.

If youā€™re aiming for EU-approval, I donā€™t know if you do, I suspect you are aware of this article:

There a several countries looking at the same EU regulations, arriving at totally opposite conclusions.
That German interpretation of EU regulations is, to my mind, pretty much the worst you could end up with. Some European Bitcoin related start ups are aiming to meet the BaFin standards, partly because BaFin is one of the very few financial supervisory authorities that hands out licences to Bitcoin businesses at all.

Reading their interpretation, trading on an exchange which letā€™s you set your own prices while youā€™re participating ā€œfront lineā€ on the market, like most exchanges allow you to, could require an authorisation. And thatā€™s just one point of many more.
Not having an authorisation could result in serious fines or even jail time, so better safe than sorry. Getting one usually requires mid five figures of legal fees.

Why am I writing all this? Iā€™m really intrigued by your project and I do want it to be a success!

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The examples shown in the business plan (not the White Paper) were results of simulations based on publically available CMC data.

The Minimal Variance Index is insensitive to short term volatility or random errors (with a zero mean over a period of several months). For example if we add 1% random noise to daily BTC prices to the simulation, the full-period NAV (Figure 1 in the Business plan) changes by only 0.5%. Note that in the same period the average daily price movement was more than 3%.

I am not aware of any significant long-term trend error in CMC data. At this point the basket and weights are determined with CMC data, which is a de facto industry standard. Plans have been discussed to implement in-house price feeds for Incidium. BTC prices on major exchanges are so highly correlated that if for example CMC is down the index is hardly affected using a price derived from Poloniex and Bitstamp.

For a few days even weeks and a particular coin, yes. For several months and many coins in a basket, no.

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If iā€™m reading this right Series A gets me shares for somewhere between $1 and $5 depending on how much is raised, and each of those shares receives 1/100,000 of the company profits as dividends? Is that the basic offer?
Business side questions:
It says ā€˜initial indicium distributionā€™ under what conditions do my shares get diluted?
Are there legal implications to running a crypto to crypto fund like this? Do we need to worry about the FEI servers being seized in San Francisco for money transmission violations? Are you going to be operating out of the Ukraine?
What kind of fees is IND going to be charging people buying funds? A flat %? A variable amount based on current market liquidity? Any idea how high those fees will be?
Are the records of what customers own what index tokens going to be communicated back to a blockchain, or is that all going to be stored on a website?
Customer side questions:
Can I ask for a payout, at any time; in full, or partially; in any single, or all of the currencies in the index fund I own?
Do I know the composition of the fund at any given time, or is that kept secret?

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Good questions, Iā€™ll do my best to answer.

  • yes, each Indicium will cost between $1 and $5 and counts for 1 vote out of 100,000 and receives dividends as such.

  • Your tokens can be diluted by IND vote and founder consensus. There are no current plans to dilute further, and specific details on events such as this and board member elections will be given in a future document.

  • We intend on doing nothing illegal. We will do our best to field legal implications. As we are not handling fiat currency, we avoid many of the more painful legal dilemmas.

  • Fees are unknown at this time. We are discussing a variety of possibilities. IND holders will likely have a say in this via the voting process.

  • Index tokens will also be PeerAssets, and will be recorded entirely on the Peercoin blockchain.

  • Once we have achieved minimum viable product, you should be able to receive Bitcoin for your index token and vice versa from Indicium directly. The exchange rate will track the index (with fees, so going back and forth quickly will profit Indicium greatly).

  • We are still talking about composition. Likely, we will do something like reveal the composition with a time lag so that we cannot be front-run.

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Many details are being defined. On the technical side these are my (preliminary) thoughts

Infrastructure being compromised, for any reason, is always a serious concern. In my proposal eventually the Indicium operational infrastructure is distributed where the simple lightweight FEI has multiple server instances deployed in different places, or even runs serverlessly. Technical study will be done once Series A is complete successfully.

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What about a time estimate on minimum viable product? I assume you already have working algorithms to compose some index funds, and youā€™re mostly looking for money to build the FEI. Is everything ready from the peerasset side? Is there a marketing budget/strategy yet?

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A business plan is given in the OP. A time estimation is given in the ā€˜Milestonesā€™ section. PeerAssets is still being developed, but core parts of the protocol that we will be using have been specified. Indicium and PeerAsset will codevelop, as evidenced by the creators of PeerAssets present as advisors and receiving a portion of the initial distribution.

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