Dear Iconiq Community,

I and everyone on the Iconiq team hope you had a wonderful holiday season and wish you all the very best in 2019! As we all begin a new year together, we wanted to take this time to conduct a review of Iconiq’s 2018 as well as fill you in on many of the exciting things looming on the horizon in 2019. Buckle your seat belts ladies and gents, it’s going to be one wild read!

Before we dive into our 2018 recap and 2019 outlook though, I wanted to announce that as of today I have officially begun using a Twitter account. Make sure to follow me @PatALowry to learn more about Iconiq and our development and to hear my thoughts on crypto, blockchain and venture related topics. O… and you might see some posts about my Philadelphia Eagles as well. For this, I apologize in advance.

Now let’s get started…

What a year 2018 was! From all-time crypto highs to massive losses, if you were in crypto at any point in 2018, I am sure you have a few more grey hairs on your head than you did to start the year just like myself. What we all need to remember though is this “crypto bear market” that will continue into 2019 for some time is not the death of crypto or the ICO but was rather a natural correction to a severely overhyped (and thus overpriced) market. Investors have wised up and now demand true value from crypto opportunities presented to them. For those who were objectively observing the crypto space and not being sucked in by all the BS, it was rather easy to foresee. At Iconiq we were prepared for such a downturn and took the necessary steps to protect ourselves and our portfolio companies while expanding our business internationally and opening new business units. Overall, 2018 was a remarkably positive year for Iconiq, even with all the speed bumps.

Iconiq began 2018 having just closed an equity financing round with FinLab, a Frankfurt-based VC and company builder and one of the EOS VC fund managers that has been our biggest supporter since the very beginning. We continued our work with the BaFin, the German regulator, to solidify the ICNQ token as being compliant. Once we received our no-action letter we began the sale of the ICNQ token and began preparations for the first-batch of the Iconiq Lab accelerator program.

From there the notable highlights in 2018 came pouring in like clockwork, including:

Raising roughly €2,500,000 in ICNQ sales

Receiving over 1,000 applications for the Iconiq Lab program and committing €1,000,000 to the first 9 startups

Opening offices in London and New York

Becoming a Sponsor Firm of the Gibraltar Blockchain Exchange (GBX)

Launching the Iconiq Funds brand and partnering with BITA to launch enterprise-grade crypto asset index funds

Being named a top-3 accelerator program in Germany

Being honored as a top-100 startup in Germany by The Hundert

While Iconiq also had other major developments last year, these don’t even touch the successes of our portfolio companies who have collectively raised over €20 million since entering the Iconiq Lab accelerator program. In fact, 8 out of our 9 portfolio companies have raised at least €500,000 through token sales or equity fundraising ever since joining Iconiq Lab, which is a success ratio I would bet is unmatched by any other accelerator program in the world. These figures do not even include the financial contributions Iconiq Lab made to the companies, either. We take this as a clear sign that the extensive due diligence we conduct in selecting our companies is paying off, and we cannot wait to offer these token sales to the ICNQ holders and our community in 2019.

The Iconiq portfolio consists of 9 companies in total, 8 of which are currently in the program and 1 having graduated in 2018. The lone graduate was Unibright, which raised €11 million in the UBT token sale. The 8 companies currently in the program are Based Global, Brain Cities, H2, Solidified, Topl, Trade Finance Markets, VLUX and VREO. We expect these companies to conduct their token sales in 2019 through various means such as security token offerings, financial instrument token offerings, and utility token offerings for those that are native blockchain protocols. Please visit the Iconiq Lab website or ask questions in our Telegram chat to learn more about each company.

The ICNQ token itself rode a roller coaster of a year, selling out multiple rounds of presales before we inevitably decided to cancel the public sale on GBX, opting to simply list the token on the GBX DAX instead. All in all, Iconiq raised an Ethereum-exchange-rate-adjusted €2.5 million before closing all sales of the ICNQ token in December. We consider the sale a success even without reaching the hard cap as it was instrumental in getting us to the position we are in today; onboarding top companies into our program, scaling internationally by opening offices in London and New York, and opening new business units such as Iconiq Funds and the soon to be launched AMaaS (Asset Management as a Service, more on that later). We are committed to continue to drive value to the ICNQ token through the growth of our business units through its many functionalities within the Iconiq ecosystem. As a reminder, the ICNQ token’s value drivers are:

Increasing Demand: Investors, startups and asset managers may pay fees in ICNQ as a voucher in return for discounts on Iconiq services, creating systemic, institutional demand for the token in the open market. Such an example would be the management fees of Iconiq Funds’ being paid in ICNQ tokens, which must be purchased by the funds on the open market in mass.

Decreasing Velocity: ICNQ club members unlock premium ICON Club membership rights and loyalty program rewards by holding large ICNQ token amounts. Such rights include exclusive access to the highest discounts on token sales that graduate the Iconiq Lab program and the ability to invest in exclusive share classes of Iconiq Funds’ with reduced fees.

Loyalty Programs: Iconiq rewards its longtime club members with ICNQ loyalty reward token distributions and other loyalty programs.

Supply/Demand Balancing: 10% of redeemed ICNQ voucher tokens are burned quarterly by Iconiq.

We are excited to continue to execute on the delivery of these value drivers for ICNQ in 2019!

As we step into 2019 it is important to not only look back at the prior year and celebrate Iconiq’s and our portfolio companies’ successes, but also reflect on our shortcomings and learn from these mistakes. For me, the most glaring mistake was attempting a secondary sale of the ICNQ token on the GBX Grid while the token was trading on the decentralized exchange, IDEX. In hindsight, we would have not attempted such a sale, and rather would have merely listed the token on the GBX DAX, like we are currently doing. We also would not have engaged some of the fundraisers we did to assist us in the sale of the ICNQ token as we learned many severely overstated their investor connections or were downright frauds. Lastly, we would have put in more of a diligent effort to grow this community in parallel to focusing on growing the Iconiq business itself. You can expect a more concerted effort on community outreach and other initiatives in 2019!

So now the question is, where do we go from here? I am happy to report there are many big things on the horizon for this community and Iconiq!

First, we will be distributing all ICNQ tokens to bounty and airdrop participants on January 15! Thank you to everyone for their patience as we closed the sale to end 2018! Almost 6,000 people participated in the campaigns, and we are excited to welcome you all as well-deserved ICNQ token holders!

Second, we will be listing the token on the GBX Digital Asset Exchange (DAX) once we distribute all the bounty and airdrop tokens. We will list the token in late January after the distribution, with live trading available immediately.

Prior to listing the token on GBX though, we will be burning the 1,112,500 ICNQ tokens that were available in the GBX sale, but we are not stopping there. In fact, we will be burning all unsold ICNQ tokens, meaning that only 10,000,000 total ICNQ tokens will be outstanding after the burn. This means that one half of the initially planned 20,000,000 ICNQ tokens will be available for trading. We are excited for the implications this will have on the value the ICNQ token offers to this community! The burn will occur on January 17.

As you likely know, Iconiq has grown well beyond the decentralized VC and token sale accelerator program, Iconiq Lab, and has added the brands Iconiq Funds and AMaaS to our group.

Iconiq Funds is an asset manager issuing a series of crypto asset index funds. We expect the first fund to go live in Q2 of this year, once we receive the necessary regulatory approvals in Q1. From there, we will expand our fund offerings to investors with different indexes and investment strategies. Our vison is that through Iconiq Lab and Iconiq Funds, we can offer a wide range of opportunities for all investors in the crypto asset space based on their risk preferences.

To manage the assets of Iconiq Lab and Iconiq Funds we had to develop an internal infrastructure that can support the custody of the assets as well as be able to execute trades on various exchanges at predetermined prices per trading pair to best deliver our index fund’s investment strategies. After building this internal ecosystem, we quickly recognized we had created a platform unlike any currently existing in the world. Rather than keep the platform to ourselves, we will be launching what we are calling Asset Management as a Service (AMaaS) and will make it available to our community and external asset managers to better manage their crypto assets. Powered by the ICON Vault, AMaaS will drive the future of crypto asset investing. Stay tuned for very exciting news on AMaaS we will be announcing in January and a full overview of the platform’s offerings.

As we grew beyond Iconiq Lab through the Iconiq Funds and AMaaS platforms, it became evident to us that we needed to restructure the Iconiq brand itself. As such, we undertook a rebranding effort which will be finalized in Q1 of this year. The parent company for the Iconiq group will become known as Iconic Holding, with Iconic Lab, Iconic Funds and AMaaS as initial sub-brands. Each new brand is receiving a new color scheme and logo as we align the Iconic business units to our full vision of the group. Yes, we are dropping the “q” in Iconiq, but we felt this necessary as many people referred to our team as “Iconic” anyway. We are beyond ecstatic with the work brand designer, Naomi Dara Harris, has done, and cannot wait to share it with this community soon!

Before we close this letter, I would like to leave you with a few pieces of advice and parting thoughts I have on the crypto economy going into the new year.

Just like I hope you all did not totally buy into all the ICO hype in 2018, I hope you do not fully buy into the STO hype in 2019. The truth of the matter is, the majority of STOs are not genuine financial instrument that issue dividends or bear interest but are in fact utility tokens being sold as “securities” for the STO marketing benefit and to protect themselves from regulators. STOs will also almost entirely be sold exclusively to professional and accredited investors, ignoring retail investors entirely for regulatory purposes. While we are very bullish on STOs that are genuine equity, debt or other forms of financial instruments on chain at Iconiq, the fact of the matter is we are still a while away from such offerings being available publicly.

Do not listen to pundits and their BS Bitcoin price predictions. Anyone telling you “Bitcoin will be at $100,000” or “Bitcoin will fall to $1,000” is selling you nonsense for their own agenda and their “projections” are utterly useless. While a lot of people are in crypto to play the speculators game and try to make a quick buck, the true value of Bitcoin and other assets is not in the market price, but the underlying value of the technology driving the crypto asset revolution. The immutability, transparency and global connectivity blockchain and DLT represents will completely redefine our financial infrastructure through the tokenization of all assets, and this revolution has just begun. If you are interested to learn more of my thoughts on this, feel free to watch a TedX Talk I gave last year here: https://www.youtube.com/watch?v=VF66b-rZANY&t=198s.

Do your own due diligence! Where there is money, scammers will come flying in to take advantage. While many of the bad players are being weeded out of the crypto markets, you should always proceed with caution when it comes to finance and do your own research.

Stay tuned to Iconiq’s social media channels for announcements and updates. We are growing rapidly, and we don’t want anyone to miss anything!

We cannot begin to thank you, our community, enough for the support you have provided us this past year! We would not be going so strong into 2019 without you, and we truly appreciate your trust in us to build the premier crypto asset management ecosystem at Iconiq. Our best wishes go out to you and your loved ones, and may 2019 be your most Iconic year yet!

Yours Sincerely,

Pat

About the Author

Patrick Lowry is the CEO and a Managing Partner of Iconiq Holding, a global digital asset management firm. Iconiq Holding launched Iconiq Lab in early 2017, the world’s first decentralized venture capital group, and a series of digital asset index funds under the Iconiq Funds brand. Patrick was an auditor at PwC and worked many years in private equity and venture capital, most notably for the German stock exchange, Deutsche Börse. He holds an MBA and a CPA license.

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