ICO Analysis: Genesis Vision

Genesis Vision is creating a platform for a private trust management market based on blockchain and smart contracts which will serve as an ecosystem for traders, investors and brokers.

Gensis is proposing a system which will enable investors to passively invest in BOTH cryptocurrencies and traditional assets. Trust management in this reference is a system where investors transfer their funds to wealth management companies/fiduciaries/experts who manage and invest these funds in assets which match the investor’s risk profile. The total amount of funds under management globally were at $70 trillion in 2016, and are expected to reach $100 trilllion in 2020.

Having personally worked in this industry for a few years, the author has seen some of its grey areas very closely. Wealth management companies measure their success by the amount of funds they are managing, which incentivizes them to attract as much capital as they can. While investors select fund managers based on their past performance, these numbers can be easily overstated by creating personalized statistics for performance measurement and working in tandem with brokers. Even the fee structure is kept opaque in many instances, with many types of “hidden” fees being charged to the customers. Many fund managers receive bonuses which are 15-20 times of their base salaries, which incentivizes them to keep the fee structure high and opaque. While investors have kept investing money with wealth managers, numbers show that only 17% of them have managed to beat their respective benchmarks in the past 10 years.

Genesis Value Proposition

Genesis Vision is a decentralized trust management platform built on blockchain technology and smart contracts. Blockchain technology provides indispensable advantages, such as openness, immutability, and censorship-resistance of all stored information, whereas smart contracts, which will be carrying out investment and profit distribution, make these processes completely transparent and open. Each manager in the Genesis Vision network has his own cryptocurrency. The size of the issue depends on successful trade statistics. The process of transferring funds to the manager is carried out by buying a manager’s cryptocurrency on the internal exchange.

There will be 3 core elements of the Genesis ecosystem: investment managers, investors and the brokers. Investors and the investment managers will interact with the platform using the mobile app or the web based application. Each manager will have his own Ethereum based token. Investors will contribute the funds that they want invested and will get the manager’’s tokens in return. A manager’s tokens gain their value from the performance of his portfolio and will trade on Genesis’s internal exchange. The manager shares the profits from the portfolio after fixed intervals, which are shared with his token holders. Smart contracts facilitate all the transactions. Every trade that a manager makes is stored in the decentralized IFPS which is visible to all and makes the system transparent.

The part of the ecosystem discussed above is enough for cryptocurrency based asset management, however when dealing with traditional assets, the brokers come into play. As of now and maybe for a foreseeable future, Genesis will only facilitate cryptocurrency and Forex based asset management. When an asset manager includes Forex in his portfolio, the investor’s funds will be routed through a broker who will buy the required fiat currency and supply it to the asset manager.

The proposed business model has benefits for all participants which includes investors, managers and the brokers. The investors benefit from the transparency while the investors and brokers get to access a larger demographic.

If you remove the Forex part of the project, the idea is similar to what Melonport and CoinDash are doing. All three of them facilitate any trader to create and manage crypto based portfolios. Genesis differentiates itself by including the traditional asset part as well as creating individual tokens for each asset manager.

Token and Crowdraise

Genesis Vision has its own token: GVT ( Genesis Vision Token). GVT is based on ERC20 Ethereum token standard.GVT will be used for all investment operations, profit distributions, and managers’ token trading on the internal Exchange.

Along with GVT, each manager will have his own token. The manager’s tokens will only trade on the internal exchanges where users can buy them in exchange of GVT.

The GVT are limited in number and as demand for the platform grows, so does the value of GVTs.

The ICO started on 15th October 2017 and is open till 15th November. 75% of the 44 million tokens are available for the ICO and 1 GVT is valued at 1 USD (hardcap $33 million). A 20% bonus is available for the next 2 days. 40% of the funds raised will be used for product development while 30% are dedicated to marketing. Genesis will be marketing the product heavily amongst users and brokers, hence the higher allocation. The team will keep 11% of the tokens.

Team

The Genesis Vision team ranks highly on credibility. With transparency at the core of the Genesis Vision project, the team had their Initial Coin Offering certified by The Financial Commission successfully. The Financial Commission is “an independent self-regulatory organization and external dispute resolution body, primarily dedicated to Forex.”

Genesis is the first ICO to be certified by the Financial Commission. One of the 3 cofounders Alexey Kutsenko is the CEO of Tools For Brokers. Tools For Brokers (TFB)is a fintech company working exclusively with brokers and has around 300 brokers as clients. The close relations of TFB will facilitate broker participation in Genesis Vision. The other two cofounders Ruslan Kamenskiy and Dmitry Nazarov started working on the project in 2016 and won the HackRussia all-Russian hackathon in the nomination “Finance and Blockchain” with the Genesis Vision project. There are 10 members in the team and 13 prolific advisors, many of them being CEOs and founders of Russia based wealth management companies.

Verdict

Credibility is always a top priority when looking at ICOs and Genesis has plenty of it.

Genesis builds up on the existing blockchain based asset management firms by enabling a window for traditional assets. Although the initial product focuses only on cryptocurrencies and Forex, many investors will find value in holding multiple fiat and cryptocurrencies together. The concept of each asset manager having his own currency seems really cool and will help attracting many potential traders/analysts. However, there is intense competition in blockchain based asset management space with companies like Melonport already working on betas with a thousand users. We hope Genesis does not lose a significant market when it rolls out its first version in 2019.

Risks

  • The gateway to traditional assets will not be easy. Genesis will face many regulatory headwinds when it eventually expands in traditional assets beyond Forex. -2
  • As mentioned above, Genesis faces intense competition in cryptocurrency asset management space. -3
  • Although the concept of asset managers having their own currencies sounds interesting, it makes the project much more complicated. -0.25
  • The first version of the product will be released in 2019, which seems a bit stretched. -1

Growth Potential

  • Although the share Forex asset management is lower than other forms of asset management, it still is humongous considering the total market size of $70 trillion. +4
  • Credible management and the advisory team is a big positive. +3
  • Genesis already has a solution for trust management market used by 80 financial companies. The working solution is based on a b2b model and is centralized. +3
  • Genesis has good relations with around 400 brokers and 50+ wealth management companies. This will help them scale very quickly. +2

Disposition

We arrive at a score of +5.75 out of 10 for Genesis Vision. There is no softcap and unsold tokens during the ICO will be burned which might result in potential upside in case the hardcap is not reached. Overall we have a positive view of Genesis.

Investment Details

The ICO is live. You can buy the tokens here.

Author:
Aakash Kawale is a financial analyst based out of Mumbai, India. He is the lead analyst at a Singapore based organization and has extensive experience of analyzing US and Indian equities. Aakash is a strong advocate of the Blockchain technology and has been analyzing cryptocurrencies since 2015.