Initial Fund Offerings and the value of WIZ

Introduction

Crowdwiz
Crowdwiz
Sep 30, 2017 · 4 min read

The undisputed benefits of Blockchain and the unprecedented hype around crypto assets have both led to a significant increase in the amount of investors who are searching for opportunities to get into the space. There are several successful crypto investment funds such as: TaaS and Blockchain Capital III, which are focused on cryptocurrencies and they’re generating considerable returns. All of these funds were started by raising capital via an ICO. ICOs are currently the most popular way to establish crypto assets hedge funds, but unfortunately, ICOs still face many challenges, which means the establishment of new crypto funds are still difficult.

CrowdWiz ecosystem and WizFund platform will not only present a revolutionary form of governance for investment funds, utilizing the wisdom of crowds, but also allow for the frictionless establishment of new ones. The process is called an Initial Fund Offering (IFO) and will enable WIZ token holders to create new investment funds and/or participate in pre-existing ones.

Photo credit: Stephan Wieser

ICOs problems

Imagine an investor who wants to put his or her money in funds which invests in crypto assets, but there is no portal to see what the available options are. He or she would need to search the internet for the information and identify all of the existing funds, while at the same time, trying to understand what each of them do: What is the type of the fund, what is its strategy and past performance? Then, one would have to see on which exchange the fund tokens are traded, and if there’s a chance to invest in several funds. In the end, you can end up with several accounts, on different exchanges, with different wallets. Tracking your portfolio can become a difficult task because there is a need to log into each of the fund accounts separately in order to keep track of each investment’s performance.

Nowadays, everyone can create their own fund through an ICO, which to be successful, requires an investment in order to develop landing pages, help build the community, and provide marketing for the venture. This in turn calls for the need of time and financial resources — an investment which is not achievable for everybody. If a person is not an Ethereum developer, it’s incredibly challenging to launch an ICO, and thus, a crypto investment fund. Hence why, as of today, there is no single convenient venue whether it be for fund creators or for investors searching for investment funds.

Photo credit: Marcin Drabek

CrowdWiz is offering IFO solution!

With the IFO process, every company, fund manager or individual that has WIZ tokens will be able to create their fund, raise capital for this fund, and finally list the fund on an exchange by issuing their own unique token. When setting up an IFO, the founder will be required to set the fund parameters and the IFO parameters. The whole process will be safe and easy.

For the fund the parameters can be (but not limited to):

  • Token name
  • Type (open or closed) — just like regular open/closed investment funds
  • Audience — Public or private. Public funds will be available for everybody. Private funds are available only for people with invitation.
  • voting mechanism for the crowd
  • Verification process
  • Description

For the IFO the parameters are:

  • Duration — start and end date
  • Starting capital — Minimum and maximum start capital in WIZ tokens. If the fund can’t reach the min capital within the set time frame it won’t start and the investors will get back their funds.

This set of rules will not only make the fund creation process much easier but also accessible for a wider audience. Maybe you want to create and manage a fund with your close friends, family, colleagues or community. Of course, it can be used by fund managers to create their own private funds and sell their tokens on the exchange.

With the CrowdWiz platform, investors will see all available WizFunds and will be able to compare the funds easily, without having to navigate off the platform. After they find the fund that they want to invest in, they will be able to do it from the same place by purchasing a token from the WizExchange or by supporting an IFO through investing their WIZ tokens.

Photo credit: Tom Sodoge

How does the CrowdWiz IFO works?

In order to start a crowd fund everyone must put at least one of their WIZ tokens as initial capital and raise the rest of your minimum required capital from other investors.

The IFO is successful when the fund has covered the minimum required capital at the end of the IFO period or when it reaches the maximum initial capital.

After a successful IFO, the new token is listed to the WizExchange, and the crowd can start operating with the raised capital — WIZ tokens by voting for investments.

If the IFO is unsuccessful, all investors will receive a refund of their WIZ tokens.

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