The world of tokenized assets continues to expand into the traditional financial sector. This month, the world’s first tokenized hedge fund, Protos (PRTS), became available to public investors via the OpenFinance trading platform.
The Protos hedge fund reads like a whos-who of early crypto projects including classics like Bitcoin, Ethereum, and Monero. The fund initially made headlines after Protos successfully sold over $6.5 million worth of tokens during its initial release. Now, developers are ready to allow Main Street investors a chance to trade this diverse investment instrument.
The Protos fund trades on the OpenFinance Network which is an SEC-registered Alternative Trading System (ATS). As an ATS, OFN can offer users additional functionalities not available to traditional investors. These benefits include faster transactions, lower fees, and the ability to trade 24-hours a day. Comparingly, Wall Street investors can only trade hedge funds during the hours of 9:30 – 4:00 pm. Also, trading closes on national holidays.
Protos Hedge Fund
Protos investors gain access to a variety of early blockchain projects. These projects include Bitcoin, Ethereum, Monero, Ada, XRP and zCash to name just a few. Speaking on what projects made the cut, company executives stated that the fund includes a host of highly liquid projects.
Additionally, Protos partnered with a number of additional token issuance platforms including Polymath to make the project a success. The Photos tokenized hedge fund operates as a security token per SEC guidelines. Notably, the token utilizes the Securitize DS Protocol to ensure lifetime compliance.
OpenFinance Network – OFN
OpenFinance is one of only a few security token exchanges. Currently, OFN lists six security tokens including the highly publicized Spice VC token. According to the SEC registration, OFN’s license allows the platform to trade Reg D, Reg A+, Reg CF, and Reg S exemptions.
In a recent interview, OFN CEO Juan Hernandez praised the benefits of Reg A+ listings. He spoke on how companies can list tokens faster and with fewer requirements. Also, firms can raise up to $50 million in each Reg A+ campaign. When tokenized, Reg A+ crowdfunding events provide even further incentives.
For example, in the past, only accredited investors could participate in these events. An accredited investor must show at least $1 million in liquid assets. As you could imagine, the majority of investors were left out of the loop. This strategy hurt companies the most because they were unable to accept more funds. Tokenization allows companies to receive funding from any investor globally.
SEC Opens Doors to Reg A+ Token Offerings
The SEC’s recent decision to begin Reg A+ approvals provides companies with some guidance as to how to proceed with an STO legally. In the past, companies complained about a lack of transparency in the sector. This lack of clarity creates a roadblock to large scale adoption. Today, Hernandez believes the advantages of tokenization are undeniable, and that investors will steer the market towards these services as they become more widely understood.
Protos Envisions the Future
The Protos hedge fund is a glimpse of what the financial markets will hold in the future. The fund’s diverse holdings are ideal for investors that desire to own a piece of the most important crypto projects released to date.
Wave Financial Makes First 1000 Barrel Purchase for ‘Kentucky Whisky 2020 Digital Fund’
Tokenization is beginning to attract increased attention from investors with this past week bringing multiple examples of important markers being met. First, INX met its minimum threshold for token distribution, with $7.5M USD raised. Second, Wave Financial completed its first purchase of bourbon/whiskey for tokenization through its Kentucky Whisky 2020 Digital Fund.
Whisky – A Different Approach
What is intriguing about these events is the underlying assets. To date, the vast majority of tokenization efforts have surrounded real estate. In this instance, however, the underlying assets are a trading platform and Kentucky Bourbon/Whisky.
Although investors have taken an interest in alternative assets such as wine and art for decades, the fund by Wave Financial represents one of the first efforts to tokenize an asset such as bourbon/whisky.
“For investors to gain exposure to real assets that have impressive investment fundamentals such as whiskey is very difficult, but now it is possible via our fund. Following the launch in March we are delighted to have completed our first tranche time sensitive capital raise and purchased 1,000 barrels of physical premium Kentucky bourbon whiskey on behalf of our investors” – Benjamin Tsai, President and Managing Partner of Wave Financial
Other examples of niche tokenization efforts include:
CurioInvest – Fractional investing in rare automobiles
TheArtToken – Fractional investing in fine art
Although reaching this first marker is an important moment for Wave Financial, it is just the first on a long road. With Wave Financial expecting to tokenize between 10,000-20,000 bottles, this current crop of 1000 only represents 5-10% of its goal.
“With our unique access to Wilderness Trail’s whiskey production capacity for this year remaining open, we are in a great position to continue the capital raise for the fund.” – David Seimer, CEO of Wave Financial
If Wave Financial is able to reach its end goal, this would represent the tokenization of an entire years-worth of bourbon/whisky from manufacturing partner, Wilderness Trail Distillery.
A Full Set of Macallan Whisky
For those wondering if Bourbon/Whisky can indeed represent a good investment, look no further than Macallan.
Matthew Robson, 28, was the recipient of one bottle of Macallan single malt scotch whisky on his birthday, for 18 consecutive years. He recently made the decision to sell this collection, which was left untouched over time. This decision resulted in a sale, bringing in $56,000 USD.
While not an example of tokenization, the appreciation in the Macallan Whisky collection is exactly what investors are after. Providing the whisky is properly cared for, it is a product that will not deteriorate over time, and is only produced in limited runs. Furthermore, there will always be a consumer demand – simply put, people like to drink. For each of these reasons, Wave’s Kentucky Whisky 2020 Digital Fund may just go on to prove quite successful for investors thinking outside of the box.
Speaking with Benjamin
When the Kentucky Whisky 2020 Digital Fund was first announced, we were fortunate to have completed an exclusive interview with one of its fund managers – Benjamin Tsai.
As the President and Managing Partner of Wave Financial, Benjamin Tsai was able to provide unique insights into the fund, Wave Financial, and the digital securities sector at large.
To learn more about each, make sure to peruse this discussion HERE.
Founded in 2018, Wave Financial is headquartered in Los Angeles, California. As a Registered Investment Advisor with the SEC, Wave Financial is able to offer investors opportunities such as the fund described here today. In addition, Wave Financial offers various consultation and treasury management services to its clients.
CEO, Dave Siemer, currently oversees company operations.
Blockchain Capital’s BCAP Token Outperforms Market in Q2, 2020
Today they announced that the net asset value (“NAV”) of each BCAP token as of June 30th, 2020, is $4.47, based on the NAV of the underlying venture capital fund, Blockchain Capital III Digital Liquid Venture Fund, LP. Weekly NAV updates can be found at: http://www.loop.blockchain.capital/
The BCAP NAV finished up 25.6% for the second quarter of 2020. The Q2 increase was driven by the liquid/token portion of the fund’s portfolio. The NAV is up 22.8% year-to-date.
The BCAP portfolio is up 347.0% since inception, post-STO from April 2017, and has a Net IRR of 59.0%. Performance figures are net of all fees and estimated carry.
The composition of the portfolio as of June 30th, 2020 is as follows:
While there are plenty of traditional cryptocurrencies in the portfolio, some special companies to note are Securitize and Harbor which are heavily involved in the digital securities and security tokens space.
About Blockchain Capital
Blockchain Capital was founded in 2013 with the mission of helping entrepreneurs build world-class companies and projects based on blockchain technology – providing founders with the tools they need to succeed: capital, domain expertise, partnerships, recruiting and strategy.
Blockchain Capital is one of the earliest and most active venture investors in the blockchain industry and has financed 90+ companies and projects since its inception. The company invests in both equity and tokens and is a multi-stage investor. Blockchain Capital also pioneered the world’s first ever tokenized investment fund and by extension the blockchain industry’s very first security token, the BCAP, which the company sold through a security token offering in April of 2017.
The company’s view is that blockchain technology holds the promise to disrupt legacy businesses and create whole new markets and business models. Blockchain Capital believes its network of entrepreneurs, investors and advisors brings unrivaled resources to founders who want to leverage blockchain technology to change the world in profound ways.
Coinbase Extends Its Influence in India with CoinDCX Investment
India has been notorious in the digital asset space for its central bank’s restrictive view of cryptocurrencies as a whole. Marred by a ban on cryptocurrencies from the Reserve Bank of India, the digital asset scene seemed to slowly die down in the country with companies in the industry having to shut down or scale down operations.
CoinCDX Gets Second Funding Round in Two Months
Nonetheless, the ban was lifted in March, making way for the rebirth of cryptocurrency companies in India. And it didn’t take too long for investments to start flooding into the country.
CoinDCX, one of India’s leading crypto exchanges, has announced a subsequent $2.5 million investment on Monday, only two months after its Series A $3 million funding round.
In this renewed strategic investment round participated Polychain Capital and Coinbase Ventures, the investment arm of US-based cryptocurrency platform Coinbase.
The additional funding is earmarked for CoinDCX’s efforts to spur adoption of cryptocurrencies in India, with the major #TryCrypto campaign aiming to attract as many as 50 million users in the country.
The new funding round was announced on the back of impressive growth figures and the exchange reaching record levels for their daily trading volumes. With the increasing interest in cryptocurrency during this global economic uncertainty, CoinDCXX sees an opportunity to expand the #TryCrypto campaign with educational initiatives, meetup events, consumer and community campaigns.
Some of the initiatives will include the launch of an Academy, a full-fledged blockchain, and cryptocurrency learning program for beginner crypto traders.
A Highly Coveted Region for Investors
The participating investors seem to have confidence in the potential of digital assets in India. Polychain Capital is a repeat investor after taking part in Series A seeding round as well.
CEO and Co-founder of CoinDCX, Sumit Gupta, shared his positive outlook for the scene in the country, appreciating the extensive interest from outside investors:
“The recent months have shown that the cryptocurrency industry in India is finally getting the recognition it deserves from global corporations and investors. Our relationship with Polychain Capital goes from strength to strength, reflecting our great partnership with the Polychain team.”
Gupta also highlighted the trust investors are lending to their company, sharing the vision of a world with digital assets underpinning transactions across the globe:
“We are also excited to add Coinbase Ventures as an investor; Coinbase’s vision and successful efforts for global cryptocurrency adoption have been admirable and mirror CoinDCX’s dream for a DeFi future.”
The Series A round attracted interest from high profile investors in the scene, with Bain Capital Ventures and Operator of BitMEX, HDR Group participating.
While Coinbase had started serving Indian customers back in 2019, this investment is the first foray for the US platform into the Indian crypto scene. Head of Coinbase Ventures, Shan Aggarwal, also stated his firm belief in the company’s leadership to build a robust platform and become a leader in the local crypto industry:
“As India continues to close the gap between the cryptoeconomy and the mainstream market, CoinDCX is strongly positioned to become the leading platform that consumers in the country interact with crypto through.”
Coinbase’s investment in CoinDCX is also a long-term strategic play, especially when arguably its biggest rival in the space – Binance – already has a partnership with another local crypto exchange WazirX.
Ambitious Plans to Lead the Crypto Market in India
CoinDCX seems to experience an accelerated rise in new users and trading volume, following the ban lift. The exchange is also the first in India to integrate bank account transfers, gaining a lot of traction on the local market.
CoinDCX also provides instant fiat to crypto transactions with zero fees, and the team behind the platform are striving to bring their users access to a wide spectrum of financial products and services that are backed by industry-leading security processes and insurance protection.
The company’s product roadmap is much more extensive and ambitious than being a local gateway to cryptocurrencies. CoinDCX already offers its customers a decentralised lending service DCXlend, and DCXmargin, with up to 6x leverage trades across more than 250 markets, and DCXfutures, with up to 20x leverage trades on leading digital assets futures.
Coinbase with an already established presence across the globe, has taken a decisive step in being part of the quickly expanding crypto market in India. After the regulatory hurdle was taken down, the country has the potential to be one of the biggest emerging markets for digital assets, especially when its population is quickly transitioning to a full mobile and online experience.