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Iconiq: a Comprehensive, Independent ICO Review

ICO Details

In-depth review

Many ICOs are scams. We all know this. And even of those that aren’t scams, very few – especially in this big, grizzly bear market – ever threaten to break through the ICO-price barrier and into those azure, parabolic skies beyond; where the sun is a ball of fire being towed across the sky by a lambo and the moon is always shining.

The reason for this, Iconiq believe, is that ICOs are not placed under the same sort of scrutiny as regulated companies. And Iconiq are right. Indisputably. Some ICOs will, say, throw up a professional, slick website claiming to be cryptocurrency’s answer to Kickstarter and overtly stating that hundreds of ICOs are ready to be released on the platform. However, once the Ethereum has been collect from the investors, the fancy fronting disappears and is replaced by the sort of website an alpaca would make if you gave it fifteen minutes and a Commodore 64.

So let’s see what they plan to do about it.

Vision

Iconiq – or Iconiq Holding, to give it its full title – is an ecosystem powered by the native ‘ICNQ’ token, split into three distinct elements named Iconiq Lab, Iconiq Media and Iconiq Funds. The overriding aim is the launch and development of businesses and allowing people to invest in them using crypto, but with the same stringent regulatory oversight as traditional investment vehicles.

Iconiq Lab

Iconiq Lab is, err, cryptocurrency’s answer to Kickstarter? With a major difference.

Kickstarter operates more as a platform upon which companies may host their idea, advertise their business and receive investment, with a proportion going to Kickstarter. Iconiq Lab instead functions as a venture capital enterprise, running an “accelerator program” from which businesses graduate.

In practice, that means companies apply to be involved with Iconiq Lab and, if successful, are then provided access to a number of consultancies with various startup skillsets, all of which are engaged by Iconiq Lab with the specific aim of ‘building’ the business to give it the greatest possible chance of success.  As at 3 September 2018, Iconiq Lab claim to have received “over 500” applications and selected just nine. Impressive figures, but whether the other 492+ applications were serious blockchain startups or the product of a Commodore 64-wielding alpaca is anyone’s guess.

Successful graduates include Unibright  and Vlux and going forwards Iconiq Lab will aim to offer 2-3 ICOs per month, with a focus on quality rather than quantity. This appears to be the real substance of Iconiq’s offering.

Iconiq Funds

Ever hear the story about how Donald Trump would be richer than he is if he had just invested his father’s money into index funds? That’s what Iconiq Funds plans to do, except instead of Donald’s dad providing the capital it will be you and your cryptocurrency. One thing that we did notice that lends credence to Iconiq’s seriousness about this is that they are not offering the moon and stars. Instead, they have stated that the first fund to launch will be a professional investment fund (‘PIF’) based in Malta, a country well-known to be open to and supportive of cryptocurrency investment. Iconiq are being realistic.

Interestingly, Iconiq will also offer a similar, accelerator-esque program for those wishing to launch their own index fund. This will include helping them design the investment vehicle, aiding them in complying with regulations and auditing requirements, operating simultaneously on multiple exchanges and also helping them to maximize the clarity of their reports, including understanding and applying investment performance metrics.

Is that a good idea? The way they phrase it is that you, or I, or an alpaca with an ageing computer could setup a fund and invite investment. Hmmm.

We’re ambivalent on this one. Enabling access to index funds through cryptocurrency is a sensible thing, we’re clear on that. It will help to introduce a much needed level of maturity to cryptocurrency investment decisions and pull us away from ‘when binance?’ and ‘when moon?’ mindsets that are all too noticeable within the crypto space. However, if I’m going to invest in an index fund then I want it to be run by people who actually know what they’re doing. I don’t want somebody who has had to be told how to setup a fund running it, I want someone with dynamic ideas and a proven track record.

The jury is definitely out on Iconiq Funds.

Iconiq Media

Iconiq Media is essentially just a podcast-type hosting service and it is in fact a little bit disingenuous to refer to it as any sort of third limb of Iconiq Holdings. The supposedly attractive element of the service is that only ICNQ holders will be able to use the project, although that will only restrict the number of people who actually consume the content, which logic dictates is pretty much anathema to the core principles of social content.  The whitepaper fittingly has about ten words on the subject.

Team

Executive Team

Patrick Lowry – Managing Partner and CEO

We’re not entirely sure what to make of Patrick. He is young (not a bad thing), an entrepreneur at heart (absolutely not a bad thing) and has a clear interest in venture capital. What he doesn’t have, however, is anything that suggests either sticking power or a track-record of success. Or anything even hinting at an interest in blockchain. The question therefore is: why now?

Max Lautenschläger – Managing Partner

Like the other managing partner, Max is young, an entrepreneur and has a clear interest in venture capital. Indeed, it appears they met studying their MBAs at Frankfurt School of Finance & Management. He has also been fleetingly involved in a number of companies in a variety of roles. But there is still a notable absence of any blockchain-related experience.

Whilst not an immediate red flag, we do need to see some significant blockchain experience in the rest of the team or else it will be a significant red flag.

Management Team

Dominic Ward – US Managing Director

At time of writing Dominic has listed himself as an advisor to Iconiq on his LinkedIn, rather than the US Managing Director as per the whitepaper and website. We’re not entirely sure what, if any significance we should attach to that, but having worked in finance since 2004 he has much more experience that either managing partner. The fact that his theatre of operations will be the US is illuminating, as there are already stringent regulations to comply with to launch ICOs, leading many current projects to not allow US contributions. This adds credibility to Iconiq’s security token model.

Or Barmatz – CTO / Technology Director

Mr Barmatz’ job is to oversee the development of Iconiq Lab’s ERC20 token offering, to expand and develop the Iconiq Lab digital platform and, post-ICO, to advise those companies in the accelerator program on the development of their prototypes. Uniquely amongst Iconiq’s top team, Mr Barmatz actually has some technical expertise, having been a developer for the last ten years. However, he is literally the only member of the team who seems at all techy.

The Rest of the Team

We could carry on, but as previously stated the pattern is consistent: they’re all clever finance people with – except for Or Barmatz – nary a jot of blockchain experience between them. This is definitely a worry, as not only does it suggest that blockchain isn’t actually integral to the project, but that the tech itself will be quite basic. Ethereum was founded by Vitalik Buterin, a prodigy with a well-known passion for technology and an IQ higher than Elon Musk on a podcast. Likewise Bitcoin. Created by techies. Cardano, Wanchain, Omisego (we could go on) all have experienced, technical teams. The lack of such expertise is going to make the delivery of a working project difficult and, whilst it is true that this project revolves around the provision of financial and business services, we do wonder why it is even on the blockchain.

Advisors

Iconiq have a far more varied team of advisors. There are entrepreneurs, ICO marketing and legal advisors, a specific Asia advisor and even a blockchain expert, Prof. Dr. Phillip Sandner, although from his LinkedIn her appears to be more of an expert on the business side than the tech side. Not ideal in truth.

Token Metrics

The ICNQ token will allow users to invest in those companies selected by Iconiq at the pre-sale stage, allowing them to access the sorts of discounts usually reserved for whales. This is a solid benefit, although the extent of said benefit is of course contingent on the projects performing and actually being worthy of investing in.

However, token metrics are generally a strong area for Iconiq. First up is the relatively small token supply. There are currently only 17,100,000 tokens, of which 4,100,000 were sold in pre-sale and 3,000,000 are for the team. That leaves 10,000,000 tokens for the ICO, which are scheduled to be sold for “roughly” one Euro a piece. Such a low cap means that tokens will be harder to get hold of, which should technically mean that the price is more likely to rise. But then in this current market anything could happen.

Final Thoughts

Iconiq is essentially a large-scale, public ICO pool. You pay your money and you invest in the ICO at a discount; the value therefore deriving from the quality of the ICOs graduating from the accelerator.

This does actually play in Iconiq’s favour, as a significant majority of the team’s experience is based around venture capital. If their experience allows them to successfully develop these businesses then people will naturally want to invest in them, which will mean that people will need to buy the ICNQ token.

The issue is the lack of devs. Without seeing a working product there is no way to know how successfully they will be able to implement their idea, and the necessity of blockchain to the project seems a touch spurious (although admittedly, being on the blockchain does allow ‘normal’ people like you or I to invest in new companies at the pre-sale stage, which is something that we wouldn’t ordinarily be able to to).

One good sign is the success of the current graduates, as it shows that the team do appear to know what they're doing on the business side.

Let's see if they manage to deliver on the tech...

Product8
Vision7.5
Hype6
Team6.5
Token Metrics9
Investment Opportunity7
Iconiq have a viable idea. The ability for regular users to invest in ICOs at the pre-sale stage - thus taking advantage of discounts that would otherwise be out of reach - is definitely a draw. However, their lack of blockchain experience is a major drawback and so it is yet to be seen how effective the tech will actually be, and how well it will allow them to implement their vision. The current bear market is also ICO adverse. However, there is plenty of time for the market to turn around before the actual ICO takes place and finishes. Therefore, Iconiq could certainly come good. Time will tell.
7.3

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