Who is CurioInvest?
CurioInvest is a young company, operating out of Zug ‘Crypto Valley’, Switzerland.
The team behind the project is comprised of car and blockchain enthusiasts, which have set out to combine their passions. Above all, they state that their mission is to enable,
“…everyone to invest in and profit from collectable cars. By using a crowdfunded, community-based investment model, CurioInvest will open up the collectable car market to millions of new investors.”
What is the Problem?
Vehicles are much more than simply a means of transportation. They are pieces of art, which speak to the person driving them. Values are driven by rarity, quality, functionality, beauty, and more – each creating differing levels of market demand.
Unfortunately, the upper echelons of the collectible car sector is typically out of reach for most. This is due to a variety of reasons, including, but not limited to, the following:
Truly collectible cars are not a small investment. Good examples will range anywhere from six to eight digit values.
Select sales straight from the factory
It is commonplace for manufacturers, such as Ferrari, to essentially interview individuals before selling them a vehicle. Even if you can afford the product, these limited edition vehicles only find their way in to the hands of a select few.
You do not buy an exotic car, and simply tuck it away in a garage while it increases in value. Sitting idle is not good for mechanical devices, and they require constant care and upkeep. When dealing with exotic cars that are very unique in nature, this task becomes even harder, as specialized skillsets are needed to care for each vehicle.
For those that do not find these hurdles as an issue, the asset class represents a highly lucrative one. CurioInvest indicates that for over a decade, collectible cars have outperformed gold, S&P500, etc.
How will CurioInvest Solve it?
In their attempt to build on their passions, the team at CurioInvest has developed a platform facilitating access to the asset class for a broader range of investors.
To achieve this, CurioInvest will strategically invest in exotic vehicles which are anticipated to grow in value. They intend to solve all of the discussed issues which plague such assets through the use of blockchain technologies.
More specifically, the team at CurioInvest will be hosting an STO, which will give accredited investors the opportunity to purchase security tokens. These tokens can be used to invest, through fractionalized ownership, of a curated collection of vehicles. The tokens impart their holders with rights to a proportionate share of profits, when vehicles from the collection are sold for a profit – no less than 120% of purchase price.
By using this tactic, CurioInvest opens the possibility of investing in such assets to an entire new group of investors that could not previously afford to do so. Furthermore, the use of a security token should allow for investors to experience increased liquidity, through the ability to enter and exit positions on secondary markets.
We reached out to CurioInvest for further comment on the nature of their plans. CEO, Fernando Verboonen, took the time to share the following insights.
Q: Other projects such as ‘TheArtToken’ have set out to democratize investing in traditionally expensive assets such as fine art. What about exotic cars make them an ideal asset for tokenization?
A: Classic & hyper cars are the perfect wedge: big audience, scarce supply, willingness to pay, emotional asset. Furthermore of the 10 asset classes Knight Luxury Investment Index (KFLII), classic cars performance in terms of price over the past decade has been staggering. CurioInvest.com brings an additional degree of independence by tokenizing assets individually. This means you now to get pick which asset to acquire – this was simply not economically feasible in the past and it’s a great example of how STOs may well disrupt the status quo.
Q: What factors come into play when deciding on an appropriate vehicle to purchase for investment? Rarity? Vintage or New? Past growth? Current Market trends?
A: Provenance and state of the asset are extraordinary relevance. However, latest market trends and overall social media sentiment play an increasing role. Ultimately, an investment in a collectable automobile touches the passion on an individual’s own experiences – making of collecting an exciting experience.
Q: Can you speak on the structuring of the upcoming security token? Do holders have voting rights? Will they be available on any exchanges which support digital securities? Are these ERC-20 based tokens?
A: Whats most fascinating about our product is that it was design with the holder in mind, hence the structure may evolve as we get further feedback from our customers. From the very beginning we pursued a non-voting right that would enable management to remain agile when exiting the asset. This means as well as the sale triggers are laydown beforehand in a transparent manner. As of today the tokens are ERC20 and as far as we know are the world’s first tokens that back a collectable car and come together with an ISIN
Boasting professional resumes which include years of experience in exotic car investing, and FinTech, the following two find themselves at the helm of CurioInvest. Under their watch, CurioInvest has as good a chance of succeeding as possible.
In Other News?
As indicated above, there have been other companies which have taken similar pathways. ‘TheArtToken’ is an example of this, as those behind the project hope to use blockchain as a means of bringing access and liquidity to an asset that traditional has lacked both of these qualities.
RBI Clarifies Crypto Banking Regulations in India
This month, the Reserve Bank of India (RBI) clarified its stance on banks seeking to provide services to crypto customers. The clarification comes nearly a month after the supreme court ruled that cryptocurrencies trading is not illegal in the country. The news demonstrates a growing demand for decentralized currencies in India, as well as, a desire by regulators to remain relevant in the digital economy.
No Laws Prohibiting Banks
According to a statement by RBI executives, there are no laws prohibiting banks from offering banking services to crypto-related business clients. The statement comes after a public outcry from the cryptocommunity. Many voiced concerns over banks denying them service on the grounds of RBI’s previous statement. Now, the market has clarification. As such, crypto service providers and traders can now rest easy knowing that they have the same rights as other businesses in the country.
Further research reveals that statement was a direct response to a query filed by the co-founder of the cryptocurrency exchange Unocoin, BV Harish. BV Harish utilized the country’s Right to Information (RTI) Act to force the bank’s statement. Importantly, the official filing took place back on April 25. However, SBI took nearly a month to make the news public.
Clarify RBI Stance
Importantly, the statement follows a supreme court ruling last month on the use of cryptocurrencies in the country. The ruling made it clear that crypto exchanges and traders have a place in India. Discussing the ruling, Nischal Shetty, founder, and CEO of Mumbai-based cryptocurrency exchange WazirX explained why the market needed some clarification on RBI’s stance. He welcomed the decision. He also pointed out that RBI had been silent on the matter until forced to comment via the filing.
Despite the positive response from investors, central bankers were quick to chastise the decision. Not surprisingly, RBI Bank executives even planned to file a review petition against the decision. Like most central banking authorities, they believe that cryptocurrencies pose a direct threat to the stability of the market. Notably, the group hasn’t filed any reviews as of yet.
India Continues on its Decentralization – RBI
India continues to embrace blockchain technology on all levels. This vibrant nation has an active crypto community. They have fought long and hard for their right to a free crypto market. Over the last few years, the country has been embroiled in internal debates regarding the legality of these unique financial instruments.
Importantly, since the supreme court’s ruling, crypto activity in the country has seen a gradual uptick. Specifically, local exchanges across the nation reported major upticks in trading activity. Even with all the positive growth, it could be months before India regains its spot as the crypto epicenter in the region. Hopefully, the new ruling provides investors with the transparency needed to push expansion in the Indian crypto markets further than ever before. For now, many in the country can breathe a sigh of relief knowing that their decentralized investment strategies are still safe.
Security Token Group Study Reveals Investors Hedging US Markets with Security Tokens
This month, a research team from the Security Token Group delved into how security token holders faired against US equity investors. Interestingly, the report revealed a decoupling of the STO market from the US equities markets. As such, researchers demonstrated how investors can use security tokens to hedge against US equity markets during the Coronavirus pandemic.
Uncorrelated Assets – Security Token Group
The report begins with a eureka statement from researchers. Nicely, the Security Token Group takes a moment to let you know there’s some light at the end of the Covid-19 tunnel. Here, they explain the fruits of their research. Also, the main researcher, Jonah Schulman shares a heartfelt message when he states “have faith and remain positive during these hard times.”
The study includes a comparison of two hypothetical investors from the start of 2020. Importantly, the first investor has $1 million in US equities in their portfolio. The second investor holds only $750,000 in US equities and the remaining $250,000 is held in a diversified security token. The Security Token Group chose to distribute the funds evenly over the top 14 security tokens in the market.
Top Security Tokens
- Mt Pelerin
- Lesure St, Detroit, MI
- Audubon Rd, Detroit, MI
- Fullerton Ave, Detroit, MI
- Marlowe St, Detroit, MI
- Appoline St, Detroit, MI
- Patton St, Detroit, MI
- SPiCE VC
- Blockchain Capital
The results from the report were an eye-opener. Researchers showed that the second investor outperformed the first by over 3%. Specifically, both investors took losses, but investor 2 was able to weather the storm better. The data showed investor one lost -9.50%, while investor 2 showed a return of -6.54%. In total, investor 2 held on to an additional $31,625 thanks to their security token investments.
Notably, Protos showed the most gains over 2020. The token is up 27% to date. Reversely, the worst performer in the portfolio was Blockchain Capital. This token showed a -10.03% loss over 2020. The report then breaks down the aggregate return for the total portfolio since the start of the year.
The data showed a +2.35 return. Importantly, researchers pointed out that an investor that followed this strategy would be up 12% versus investors that only held equities. Crucially, the data signals that if you were invested in the Dow Jones, S&P 500, and the NASDAQ exclusively for 2020, you may want to expand your horizons.
Security Token Group – Delving Deep
As part of this strategy, the group decided to calculate the correlation coefficient for all of the security tokens in the study. When you calculate a correlation number you examine varying factors and market movements to notice patterns. The higher the score, the more correlation you have between two financial instruments.
Amazingly, the security tokens correlation coefficient score was only -.19. To put this score in perspective, the report lists Apple stock as .88. Interestingly, researchers then show the data for each token independently. This data helps to indicate what security tokens unhinged from the US markets during the epidemic specifically.
The next step was to examine each tokens correlation to each of the major US markets independently. Interestingly, the largest security token in terms of market capital, tZERO showed the highest correlation among the tokens. SPecifically, tZERO ranked .74. The other tokens in the study scored much lower. For example, all of RealT’s tokenized properties scored just .21.
An Escape Pod
The Security Token Group’s research proves what blockchain-based financial instruments continue to make headway in the market. Notably, STG researchers plan to conduct further studies in the coming weeks to better understand the effect of these tokens in the sector. For now, savvy investors continue on their hunt for uncorrelated assets during the quarantine.
DTCC Unveils Two Security Token Research Platforms
This week, the security token sector got a jolt of energy after the Depository Trust & Clearing Corporation (DTCC) unveiled two new blockchain programs. The programs are meant to study distributed ledger technology (DLT) and how it can improve the current settlement processes. The news marks a turning point in blockchain integration as the DTCC processes quadrillions worth of securities transactions yearly.
DTCC Projects Underway
According to reports, DTCC has two DLT initiatives already in the works. The two projects, Ion and Whitney, leverage blockchain technology to improve upon the current business models. For example, Ion is a proof-of-concept alternative settlement service. The platform will work as a stress test indicator to verify the scalability of blockchain settlement systems under heavy traffic. The protocol is the result of years of research. In 2018, the public got a glimpse into the project as DTCC announced the results of a benchmark study. The report demonstrated for the first time that DLT is capable of supporting average daily trading volumes in the US equity market.
Ion is the DTCC’s new blockchain settlement protocol. Impressively, the platform is said to be able to handle quadrillions of transactions. Interestingly, Ion developers ran this concept for 12 weeks with mixed reviews. For example, in their report developers acknowledged scaling issues that emerge during development. Despite some bugs, the proof-of-concept served its purpose as a benchmark tester for DLT tech. Importantly, the platform utilized the Ethereum network. This decision makes sense as Ethereum is known for its developer-friendly ecosystem.
Ion is now moving on to the next stage in its development. DTCC executives are now on the lookout for a “technical stack” to bring the platform to life. Additionally, the DTCC already offered to start testing APIs of other firms within the ecosystem. This decision is sure to help bolster the security token sector as more developers make the leap into distributed applications (Dapps).
The second platform the DTCC plans to examine is Whitney. This private securities market’s design is a combination of features from the private and public securities markets. Developers hope to bring more traditional investment firms to the STO sector with this maneuver.
Importantly, Whitney is a full security token ecosystem. The platform supports the issuance, distribution, and exchange of securities on the blockchain. Consequently, smart contracts integrated with compliance mechanisms are built throughout the protocol. Notably, the DTCC stated it will also keep records of every transaction stored off the blockchain as a security measure. While this decision seems redundant, it does reveal the level of caution the firm plans to exercise.
In a public interview, the managing director of business Innovation at DTCC, Jennifer Peve discussed the main goals of the projects. She started with an explanation of how the private securities markets lack transparency. Importantly, Reg D securities have far fewer regulations than publicly traded securities. She explained the DTCC plans to use the data gained from the platforms to build a next-generation securities clearing system.
The Time is Now
Peve, like many in the market, believes the time is ideal to leverage emerging technologies. Its true, blockchain provides intuitive minds a gateway to develop completely new solutions to many of the inefficiencies plaguing the market. For now, it’s exciting to hear a securities powerhouse such as the Depository Trust & Clearing Corporation (DTCC) already has plans to upgrade their systems in the near future.