ICONOMI Profit Sources

The first question that appears in my mind when I hear about the new investment opportunity is ‘What are the profits?’. The ICONOMI whitepapers don’t tell us anything about the expected profits numbers. However we can do some estimations and there are also some replies from ICONOMI team at bitcointalk forum that can shed some light into this area.

So what are the profit sources?

- management and performance fees from CTF and CMF funds managed by ICONOMI. Currently, they are ICONOMI.INDEX and ICONOMI.PERFORMANCE funds

- profits from ICO funds part that would be invested into ICONOMI.PERFORMANCE fund (if ICO is to accumulate more than 10,000 BTC equivalent. You can check the current ICO state at https://ico.iconomi.net)

- after OFM launch there will be many funds not managed by ICONOMI itself so some management fees part (greater) would go to the fund managers and the rest would go to ICONOMI

The fees numbers are not defined by the ICONOMI team at this stage. They may be about 1% management fee and 20% performance fee for the ICONOMI.INDEX fund. It means 1% from the invested amount and 20% from the fund generated profits.

ICONOMI team estimates the first year investments volume as $200M (bitcointalk). For simplicity I will use 1% management fee for all the funds types. I will also exclude ICONOMI operational expenses and taxes for the same purpose taking into account they claim to use the ICO funds first. So the profits would be (investments volume)*0.01 + (ICONOMI managed funds generated profits)*0.2.

I will also assume the ICONOMI managed funds investments share will be 60% for the first year. Just because:

  • the OFM will be launched after the above funds
  • the fact the ICONOMI operated funds investment will be the simplest option
  • the trust issues (ICONOMI will have more trust from the start). The current level of trust can be estimated at https://ico.iconomi.net. The ICO is successful already.

Calculations will follow.