ICONOMI

  • Cryptoasset Report
  • December 21, 2018

ICONOMI is a decentralized fund management platform that allows users with a variety of technical proficiency to invest in digital assets and portfolios.

Overview

ICONOMI is a fintech company developing a digital asset management platform. The platform is designed to appeal to both inexperienced investors and experts, and offers a range of investment tools suited to each’s needs. Established in 2016, ICONOMI was one of the first platforms designed to help users to invest in digital assets. Digital Asset Arrays (DAAs), essentially customizable cryptocurrency index funds, are the platform’s core offerings. Prior to changes in 2018, holders of ICONOMI’s token, ICN, could collect fees in ICN from profitable DAAs. In December 2018, ICN was phased out for eICN, an equity token, with ICN exchangeable for eICN. ICONOMI was co-founded by Tim Zagar (CEO) and Jani Valjavec, both of whom have previous experience with Cashila. The projects CTO, Miha Vidmar, was previously director of development at Halcom.

Protocol Details

The ICONOMI platform allows users to purchase cryptocurrencies directly, or to invest in expert selected ‘Digital Portfolios’ (formerly called ‘Digital Asset Arrays’ or DAAs.) For a management fee, users can copy expert’s Digital Portfolios, potentially benefiting from these curated individuals’ investment strategies. The platform currently offers thirty plus Digital Portfolios. Becoming a digital portfolio expert involves completing an application process and the minimum seed for a DAA is $50,000. Digital portfolio experts set an array’s management fee, an annual fee charged in small proportions daily to DAA users. This yearly fee ranges from 1-10%.

In April of 2018, ICONOMI offered ‘Proof of Solvency’—proof that ICONOMI’s total reserve balances could cover the company’s total liabilities— through a third party audit by Deloitte that utilized Merkle trees to verify users’ account balances and liabilities sans any disclosure of personal information. The use of Merkle trees was intended to protect users’ personal information whilst enabling users to check that their investment was included in the audit. User data, such as e-mail, account balance, and a randomly generated audit ID, were ran through the SHA256 hashing function and put into a Merkle tree. Each internal node would sum its two children’s balances, combine their hashes, and hash the result, a process ultimately producing one root node containing the sum of all balances for an asset. Besides protecting users’ personal information, this method of auditing also produces a publicly available tamper-proof tree that individual users can verify holdings via. Deloitte’s audit concluded that ICONOMI possessed both $133.6M in liabilities and $210.2M in reserves, indicating that ICONOMI was solvent.

Asset Details

ICONOMI had two tokens, ICN and eICN, and has phased ICN out. ICN was used to pay fees by DAA managers, but lost this utility as of December 1st, 2018, with ETH replacing ICN’s use. In September 2018, ICONOMI announced plans for a second token, eICN, that represents a tokenized share in ICONOMI AG, e.g. the joint-stock company. An equity token, eICN allows holders to participate in project governance in a role analogous to shareholders in a joint-stock company, with shareholder rights including but not limited to voting and participation in company net profits. The shareholder rights are based on Liechtenstein’s corporate laws, and include rights for approving annual reports, electing and discharging members of the board of directors, amending the company Statute, or dissolving and liquidating the company.

For ICN holders not wishing (or not eligible) to become shareholders, ICONOMI suggested selling ICN tokens on exchanges, and, in the event trading on exchanges stops, pledged to buy ICN tokens from holders–the rate of exchange varied across the exchange event, which completed in December of 2019. ICN holders converting tokens to eICN were required to complete the platform’s Tier 2 verification, with some countries not eligible and US holders having additional requirements. ICN/eICN conversion occurred at a 1:1 ratio.