TaaS (Token-as-a-service) is an emerging project in the crypto-asset management space with its ICO currently ongoing. There has been a rapid emergence of many different projects in the crypto asset management space. It is a nascent niche for sure, but as cryptocurrencies (including crypto-assets, protocol tokens, app-coins, altcoins, etc.) grow as an asset class, this is bound to increase in prominence. In fact, very recently, the market capitalization of all crypto other than Bitcoin has reached an all-time high, close to $5 billion. There’s serious money in this line of business, and companies are rushing into the space.
Before we discuss TaaS or its offerings, lets take a look first at the industry in general. The goal of crypto asset management firms is to make it easy for investors to gain exposure to cryptocurrency as an asset class. At a high level, there are two ways to gain this exposure:
- Passive investing (similar to an index fund, say the S&P500 index fund).
- Active investing, which can entail many different strategies and fund structures.
Let’s take a quick look at the passive investing side. Today, there are no real crypto-indexes to speak of which are investable by the investors. There are a few indexes that you can see, such as the Smith+Crown crypto index, but it is poorly constructed with only 11 components, and isn’t kept up to date. Then there are indexes like ICONOMI index which is being used for ICNX, it’s flagship index fund product. These may be an option for investors in the future, if they agree with the index components and weightings. There is no widely available product yet.
The active industry part is where things start to get interesting, because there is a lot of discretion with strategies to follow, and fund structures to use.
Take the example of ICONOMI, which is probably going to be one of the closest competitors for TaaS. It has a flagship ‘hedge fund’ product which is traded as an Ethereum token, ICNP (not live yet). This is different from the index fund previously discussed, which is ICNX. The ICNX is an open fund structure, which means there is free conversion between the token ICNX and the underlying basket of cryptocurrencies that it holds. ICNP on the other hand is discretionary. TaaS is similarly a closed-end fund but with built-in audit features, so it can provide investor transparency on what is held by the fund.
Kepler is an invention by the TaaS team. It is a data and portfolio management tool. Kepler is to crypto-finance what the Bloomberg terminal is to traditional finance. In a nutshell, Kepler is purported to be a complete tool for traders and investors. Kepler starts at the very beginning – research stage, and goes through the very end – risk management for portfolios. In-between are included processes like order management and order routing to various exchanges. This is a powerful set of features, and if TaaS is able to deliver on the promise of Kepler, it is game changing in the crypto-asset management space. No other company today offers such a comprehensive tool-set.
The appeal of Kepler is that investors and traders can do everything from within the platform. They can do market research, qualitative analysis, fundamental analysis, technical analysis, price trends, and all other aspects of research before buying into a crypto-token. Then, they will be able to route orders to various exchanges that let you buy and sell these crypto assets. Then you can monitor and manage your portfolio based on parameters that you define. These are all the functions that the Bloomberg terminal is capable of doing (and much more of course) but not for cryptofinancial assets.
One big advantage for releasing Kepler to the market is TaaS can firstly pull ahead of competition with a real product to market that makes money. Then, it can use that data to help with future trading and investment, both for the TaaS fund and for others to use. There is an in-built network effect here – the more successful Kepler can be, the more traders it will attract, the better data it gets, which better helps the TaaS team make good decisions for investors.
The market today lacks a tool like Kepler. TaaS has a real advantage in the space, and if the team plays their cards right, they can create real value in the entire ecosystem, which should also help TaaS investors.
The ICO starts soon. Check out the site and other details at http://taas.fund/
Photo Credit: Nicholas Erwin