Overview

Iconomi, a fin-tech startup based in Slovenia, is building a decentralized management platform to allow funds of tokens to be managed for digital assets. Their goal is to allow any user to create and manage groups of tokens and crypto assets and allow anyone to invest. In exchange for creating and managing these funds, the managers will be paid fees through the platform. This is all according to their original whitepaper that was used to raise $10+ million dollars in an ICO.

So far, it seems like they have built two main products. First, they have created a hedge fund of crypto assets called ICNP where they are actively investing in tokens and other currencies (both crypto and fiat). Second, they have created an index, ICNX, to track the crypto economy and allow users to buy into the index, which is currently in a closed beta.

The hedge fund, ICNP, as of this writing, has grown up to $43 million dollars according to their website. This is an astounding return and has benefited tremendously from the recent run up in the entire crypto economy.

Whitepaper

When investigating any crypto token project, the first thing to look at is the project’s whitepaper. As of this writing it looks like the whitepaper has been deleted from their website and all links have been removed. Some original copies are available as copies on 3rd party websites.

The original whitepaper discusses the transition from old investment technologies to new, the different funds that will be created, the ICO, and even discusses releasing a debit card.

Also mentioned in the whitepaper is “Cashila OOD s.r.o” which is positioned as the service provider of the platform. Some initial background research shows Cashila to be a now defunct bitcoin payment processor for USD and Euros. Additionally it looks like their banking relationships were severed and could be the reason for the closure.

Current Platform

A standard protocol for distributed platforms dealing with user’s money is to be open and transparent. Unfortunately, it looks as if the entire platform for ICONOMI is closed source. There is no apparent explanation for this in any of the searchable public documents.

As mentioned, the fund platform is in a closed beta. However, there are some online videos showing the early capabilities of the platform. Due to the fact that both Ethereum and Bitcoin can be deposited into user’s accounts and there is no evidence of an integration with a decentralized platform, it looks as if the entire platform is currently running off-chain. Depositing money probably just updates a database to show you a value of your account in the website, leaving them in custody of the funds.

The Token

The ICN token which was distributed in the ICO is currently worth a market cap of $128 million dollars, according to CoinMarketCap.com.

As of this writing, there is no public facing documentation describing the purpose or utility of the token on the platform. Various threads mention using the ICN token for fees on the platform and even having Iconomi burn the tokens as they make money to provide value for token owners.

Conclusion

ICONOMI has been tremendously successful in growing their initial ICO funds through their investing activity. However, there is no cryptographic “proof of funds” being published on their website, so this cannot be independently verified.

Overall, there does not seem to be a justification for the ICN token to be trading at a $128 million market cap when there is no immediately obvious reason for it to exist. In addition to it looking like an entirely non-decentralized service, the fact that the entire source code is closed source and not available for auditing raises deep concerns.

This will be an interesting project to follow as it rolls out functionality to their platform and more of the features are opened to the public, however it should be used with caution until some of the outlined drawbacks are addressed.