There have been a huge amount of inbound questions from everyone interested in contributing to the Ignite project. Our team at Ignite will be making a series of posts to address all of your questions, and today I will focus on a couple of our most popular questions: “is Ignite a fund?”, and “what is the income potential for IGNT token holders?”.

Is Ignite an Investment Fund?

The simple answer is no, it cannot be said that Ignite’s Initial Coin Offering (“ICO”) structure is an investment fund. It is first and foremost a fundraising structure to support the build and operations of the Ignite decentralised ratings agency for the Crypto world. The Ignite index is a key feature of the Ignite Ratings Platform.

The Ignite Ratings Platform is also not an investment fund despite having similar optics. There are major differences to your typical fund namely that:

IGNT token holders are not pooling their money in a collective investment via the ICO IGNT token holders will not own any equity or shares in Ignite and their associated entities Capital raised via the ICO is treated as revenue to supporting the ongoing development of the Ignite Ratings Platform and to capitalise the linked Ignite investment index, to ensure that our rewards mechanism is in place for our contributors. 60% min of ICO proceeds will go into the ignite index.

What is the Ignite Index?

The Ignite Index is a fundamental part of Ignite’s ecosystem. It’s a key ancillary product driven by the ratings and collective intelligence of the IGNT token holders, who are incentivised to continue sharing reviews and opinions on the platform by the gains that may be achieved if successful trades are executed. The Ignite Index will be formed of all crypto assets owned by Ignite, until deployed the Assets will be held in ETH or BTC.

Crypto assets which are ranked well by the Ignite community are purchased and held by the Ignite Index. While its our goal the Index outperforms the market there is no guarantee this will take place as the success or failure a trade lies squarely on the Ignite community ratings.

Its out goal that the Index performace serves as a gauge on the health of the crypto ecosystem as a whole, much like the S&P index is for the US stock market.

Our key goal with the Index is that the Ignite Hive community continue to be incentivised to generate asset ratings, and submit quality investment intelligence.

What level of rewards can you expect to receive from rating assets?

Level of rewards is strongly linked to the level of your participation and contribution on the Ignite Ratings Platform. We have a reward methodology which also takes into account and measures a reputation score.

A very over-simplified example of our rewards model could be thought of as follows (this is not the actual algorithm and is presented merely to help explain the concept):

(IGNT Token Holder Ratings Contribution + Reputation Score) x Token Held on Platform = Reward Amount

How would this work in practice? Lets consider the following example:

Let’s say that the community rated Litecoin with 5/5 stars-the Ignite Index automatically would made a trade on Litecoin. Assume the index invested $500,000 USD or (715 ETH at todays value). One week later the Ignite Index closed the position with a 100% or $500,000 gain.

Assume 20,000,000 tokens are outstanding with 10,000,000 active on the platform.

How is this income allocated:

1. Ignite takes 20% of the profit for operations: $100,000

2. 30% is re-invested into the Index: $150,000

3. 50% is available as income to active users: $250,000

If all users had a 100% reputation score then .025 USD would be available for each token. However, this would never be the case as all users have different reputation scores, may not have advised on that trade and so on. Thus we will have users without distributions, and other users which get much more.

Let’s say you have a 95/100 reputation score and own 10,000 tokens: In this case you would receive 95% of the .025 or .02375 USD per token.

Your total income from that trade would be $237.50

Now if in the same situation a user has a reputation score of 30/100 in this users income would be: .0075 per token or $75

In the event a user had a 0 reputation, and 0 contributions to ratings, they would not get any reward no matter what their token holding. The reward would simply be distributed to the active users.

Keep in mind that is just 1 trade the index would likely make in a week. The token holders are responsible to generate ratings which turn into trades for the index. So the more activity the higher the reward potential or ROI.

What if I dont want to rate assets and just hold the tokens, how will I benefit?

Non-active token holders would still benefit from a growing value due to the following:

1. Use of the platform: the Ignite platform is exclusive to token holders, including the potential for access to our trading technology for your own trades, real time ratings and investment intelligence, ability to leverage your tokens as credit for your own trading in any other alt coin. This alone is a massive value creator.

2. Scarcity: Ignite tokens must be locked on the platform in order to receive rewards, since only 15,000,000 tokens will be in circulation, its likely to avoid massive price volatility and steadily rise over time.

3. Reward opportunity: As the Ignite Index increases in deployable capital- the reward potential for each IGNT token holder increases, thus they become more valuable with time.

For more information please see:

Ignite website: www.igniteratings.com

Ignite facebook: https://www.facebook.com/IgniteRATINGS/

Info on our trade technology: www.t0.com