The financial sector has been in a particular focus over the course of last year, in part due to the exponential rise of ICOs which has challenged the venture capital industry in its ability to finance early-stage companies and projects. The rise of ICOs may have been on the front pages, but the hedge fund industry continued to experience its own evolution. The era of the point of click traders continued to diminish and there has been an unprecedented rise in the inflow of money into funds that cater to more systematic, computer-powered investment strategies. The latest data compiled by HFR, a data provider, shows that the amount of money managed by quant hedge funds has nearly doubled since 2010 and is on the brink of surpassing $1 tln of assets under management.
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Smart contracts- smart investing
Another trend that took place over the course of last year is the proliferation of crypto hedge funds and also signs that family offices, as well as private banks, are beginning to look at allocating some of their portfolios into crypto assets. The latest statistics indicate that there are over 120 cryptocurrency hedge funds and yet there are only a handful of funds that use quantitative methods.
The hedge fund industry is ripe for disruption, not only because of bad press linked to excessive fees, lackluster performance, but also because it is time to open up to the broader investor community. Going on a diet by introducing more systematic strategies and smarter algorithms will certainly make the overall operations more efficient, but the fat trimming exercise does not go far enough…
With the advent of Blockchain technology and smart contracts, the team at NaPoleonX seeks to create exactly that and more. The ideas are far-reaching and ambitious but so is the team behind the project. The founders are former multi-billion asset managers at Tier 1 banks, who have designed and run high-performance trading bots for the past 10 years. This will allow NaPoleonX to directly benefit from a large range of existing trading systems developed by an experienced team. At the same time, the tokenization of financial assets will create the foundation that will eventually allow crypto-ecosystem to become more mainstream, both in the eyes of an investor and regulator. By marrying the two allowed the team at NaPoleonX to create a unique solution, while also becoming the first ever crypto asset management firm – welcome to the world of Decentralized Autonomous Funds (DAF). Instead of being advised by a banker that may be more interested in selling its own products, investors would have direct access to a set of Decentralized Autonomous Funds to optimize their risk/return profile.
Another issue that has prevented faster adoption of cryptocurrencies is the lack of regulation. Such concerns will be put at ease by the fact that the NaPoleonX smart contract will be deployed by Napoleon Crypto SAS, a French company, which may apply for an asset management license in an EU country as soon as the ICO has been completed. What makes this ICO even more attractive opportunity is an array of benefits NPX token holders receive.
By participating in the ICO, future token holders will get an opportunity to act on the selection of DAFs and trading bots to earn DAF token through rental fees paid by the DAFs for the use of the trading bots equal to 25 percent of gross performance. NPX token holders will get 85 percent of them for the 10 first DAFs that Napoleon Crypto will create. The ICO will start on Jan. 22, 2018 and the team aims to collect €15 mln in order to fund various aspects to develop the platform.