TaaS (Token As A Service) is a new crypto project that is filling the increasing demand for crypto fund management. There is a lot of investor appetite for easy access to crypto as an asset class. We are seeing this niche get crowded of late – ICONOMI, Melonport, etc. are all involved, in some way, to help investors gain exposure to the new crypto asset class, and satisfy their demand. TaaS is a promising new project that is aimed to allow investors to reap the gains from good cryptocurrency investments. TaaS is separating itself from the rest of the crowd in many different ways that we’ll discuss below. Also, the TaaS ICO will start soon, so keep an eye out.
TaaS ICO and Structure
TaaS will sell a maximum of 101 million TaaS tokens in its ICO (Initial Coin Offering) that will go on for a month. No additional TaaS tokens will ever be created in the future. Also, the token sale structure is set up in a way that the tokens have a fixed price (of $1) and any tokens not sold in the ICO will be burned. The ICO will start on March 27th 2017.
Interestingly, the team has refused to hold on to any TaaS tokens in the future, i.e. all the TaaS tokens that will ever be created will be sold to the general public. This is different from many other projects that usually hold on to a certain percentage of tokens sold in the ICO, so they can ride the price up if it pops after the ICO.
There are bonuses for the ICO, but the bonuses are not based on duration as many other ICOs do. Instead, the bonuses are based on how much has been raised already till that point. The following is the bonus structure.
How Does TaaS Work?
The details of how TaaS works is outlined in its official whitepaper. TaaS is an Ethereum-based token which is structured as a closed-end fund. A closed-end fund pools investments from investors, invests the funds in the market, and distributes the returns back to the original investors. In the case of TaaS, 50% of all the returns earned on the invested money is sent back to the original investors. 25% is invested back into the fund, thus raising its AUM (assets under management) and thus the NAV (net asset value) of the closed-end fund. The remaining 25% is distributed between operational expenses (15%) and a reserve fund (10%). The reserve fund is used to handle investor fund outflows during the life-cycle of the fund (remember it’s a closed-end fund).
Therefore investors in TaaS have two distinct sources of return –
- Earnings distributed via earnings, to the tune of 50%.
- Increase in NAV of the fund, which means each TaaS token represents a higher amount of money in the ‘pot’.
Of course, there are the usual elements of earnings growth and speculation that will also drive the market price of the TaaS token.
TaaS is handling the problem of transparency in two distinct ways –
- For the payouts themselves, the team is building a smart-contract platform that will ensure fair payments to all investors, with a minimum of 50% of profits sent to the investors.
- For the transparency of the fund and its holdings, the team is building a Cryptographic Audit (CA) technology. This technology will allow the investors in the fund to monitor and track the history of the closed-end fund and what types of cryptocurrencies (blockchain assets) the fund bought and sold over a period of time.
The transparency at the fund level is unprecedented in the world of closed-end funds, whether they invest in regular markets or blockchain assets/cryptocurrencies. The team wants to make this one of the distinguishing features from some of the other projects involved in crypto fund management.
How TaaS is Different
In addition to building a closed-end fund, the TaaS team is building a complete portfolio management tool that also combines an analytics platform. This is called Kepler. This is already in private beta and the current timeline for Kepler’s launch is end of 2017.
TaaS has some similarities to the ICONOMI.PERFORMANCE fund, in that it is run at management’s discretion (the management team makes the decision on what crypto-assets and ICOs to invest in). However, in the ICONOMI.PERFORMANCE fund, different investors buy ICP tokens (i.e. investors that want hedge-fund like exposure to crypto) and different investors get the fees from that fund, i.e. ICN investors. However, in the case of TaaS, the fund is owned by the token holders, and 50% of the total profits are sent to these token holders. Management uses a part of the funds to manage operating expenses. The structure of a closed-end fund is therefore simpler. This is more appealing to ICO investors. Finally, ICONOMI doesn’t have any tools for transparency. The team announces new investments on a blog post. However, neither the ICN investors nor the ICP investors know the timing of trades, or can audit the trades. This is in contrast to TaaS which wants to make transparency a cornerstone of its fund offering.
Melonport is also in the same asset-management niche, which aims to build a fully decentralized fund management platform with the help of Polkadot. However, the focus of Melonport is more towards providing the tools of fund management to any crypto hedge fund manager. Melonport doesn’t itself do any crypto investing on behalf of investors. On the other hand, TaaS has an actual management team in place that will do the research and analysis necessary to make intelligent investments.
The ICO starts soon. Check out the site and other details at http://taas.fund/
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