Two Prime— Telegram AMA — February 19
On Wednesday February 19, we had the pleasure to welcome to our Telegram chat:
Marc Fleury, Chief Executive Officer and Co-founder of Two Prime.
Alexander S. Blum, Chief Operating Officer and Co-founder of Two Prime.
We asked them questions about the development of Two Prime.
Some sentences have been slightly edited for readability, but the meaning has been conserved.
In this AMA, Marc Fleury, CEO of TWO Prime and Alexander Blum, COO of Two Prime talk about their innovative Continuous Token Offering and the advantages it has over traditional IEOs or ICOs. The key takeaway is that Two Prime is not a technology but rather, a fintech company that focuses on the financial application of crypto in the real economy. After getting started in crypto, Two Prime’s financial approach will eventually be applied to other verticals like smart city financials.
Marc Fleury from Two Prime: Hey everyone
Alexandre R from GAINS: Hey Marc, welcome 😃
Q — Alexandre R from GAINS: Can you tell us more about yourselves? What you’ve done before crypto, how you got into crypto and if you had other previous ventures in crypto?
A — Alexander S. Blum from Two Prime:
Bringing together Marc’s unparalleled experience in professionalizing the open source software sector and Alex Blum’s financial expertise and insight into cryptocurrency investment markets, Two Prime is uniquely positioned to professionalize cryptocurrency.
Dr. Marc Fleury, Chief Executive Officer and Co-founder of Two Prime, is a pioneer of open source software and creator of one of the first sustainable and commercially successful open source business models. Building upon his financial expertise, spanning from his role advising private equity firms to his academic pursuits in modern monetary theory and banking theory, he provides the strategic direction for core investments and partnerships for the firm.
Marc is also a highly regarded investor within the IoT, Deep Tech, Open Source, and Blockchain sectors. He is a pioneer of open source software and creator of one of the first sustainable and commercially successful open source business models. Marc founded JBoss, an open source application server, in 1999 during a time when major players thought open source was dead. Marc proved the naysayers wrong, turning JBoss into a commercially viable business and, in seven years, sold JBoss to Red Hat (eventually acquired by IBM) for $420 million.
Marc holds a doctorate in physics from the prestigious École Polytechnique in Paris for his work done as a visiting scientist at the Massachusetts Institute of Technology. He has also obtained a masters degree in Theoretical Physics from the École Normale Supérieure.
Alexander S. Blum, Chief Operating Officer and Co-founder of Two Prime has worked across blockchain hedge funds, startups, and consulted in the space for over seven years. Prior to founding, Alex started digital investment group Atomic Capital, developed a cryptocurrency mining operation and AI-crypto hedge fund, and worked as a technology advisor for the Bill & Melinda Gates Foundation, The World Economic Forum, an economic development specialist for the Peace Corps,
Alex is a Fellow at University College London Centre for Blockchain Technologies and a graduate of MIT and Tufts University. Alex has spoken at blockchain events around the world and his writing can be seen in publications such as Forbes, The Pacific Council on International Policy, HuffPost, and Seeking Alpha.
I initially working for a Venture Capital fund gave me exposure when I was a lowly graduate student 😊.
A — Marc Fleury from Two Prime:
In a nutshell of background: I have a PHD in complicated things. Started one of the first open source businesses and retired young.
Q — Alexandre R from GAINS: Why choose the name Two Prime and the token name FF by the way?
A — Alexander S. Blum from Two Prime:
Modern Monetary Theory states two interdependent phenomenological axioms and the banking system operates on a resulting syllogism:
• Axiom1: in discounted cash flow analysis (axiom 1a), 0 = ∞ and (axiom 1b) 1 = 1..N.
• Axiom2: Government possesses, de facto, exclusive, and perpetual right of use of Axiom 1a for Ab-Initio Money(M0) monetary creation (FIAT M0).
• Syllogism 3: The creation of Asset Backed Money(M4) is a consequence of these two axioms. The banking system creates BACKED M4 with debt-backed cash flows of type 1b: 1 = N with N ≈ 1. Add equity to these cash flows (e.g. project finance) and you create a return of type 1 = N with N 1 or axiom1b.
Q — Alexandre R from GAINS: Thanks for the intro. I guess what nearly everything will depend upon are the investment choices you make, what strategy you will follow. I’m sure you cannot go into too many details because it’s always about who has an edge over others, but what can you tell us about how you’re going to pick companies or people you invest in, how you will balance your portfolio, etc.?
A — Alexander S. Blum from Two Prime: I think the funds and partners we work with are not everything at all. However, we do have a unique access to some of the world’s top funds. We’ve already announced, for example, NGC Ventures and SPiCE VC as fund partners.
There is also another well known fund that we can’t yet publicly disclose, but people could definitely not access, even wealthy investors for the most part.
Did you guys know about our trading competition by the way? We are rewarding $360,000 USD of our money in the next few months. Sign up on Liquid exchange to get in!
Q — Telegram user Mission: I read your academic whitepaper and two words which confused me are Two Prime structures “Axioms and Syllogism”. Can you explain it a bit?
A — Alexander S. Blum from Two Prime: Axioms and Syllogisms are philosophical terms for how arguments are constructed. Axioms are basically assumptions and Syllogisms are logical inferences that can be made from those.
Q — Telegram user nle: Your logo is so unique and different from others, what is the meaning of it and what FF in your logo stands for?
A — Alexander S. Blum from Two Prime: The logo stems from the esoteric field of alchemy.
Marc is an Illuminati wizard and so this is part of his Illuminati magic. It takes from “The Great Work” symbol:
The “FF” in the middle stands for Fund Formation. It is also the alchemical symbol of Sugar, because we want people to have a sweet, sweet life.
Q — Telegram user Crypto Future: Why did you choose to go with Liquid Exchange instead of any other CEX like Binance where the market size is big?
A — Alexander S. Blum from Two Prime: We chose Liquid because of their transparency and trustworthiness. We will be on other exchanges in the near future.
Q — Telegram user John: Why did you choose to start from Asia, and Japan in particular?
A — Alexander S. Blum from Two Prime: Asia understands crypto the best right now and has the most active market. We are focused on all Asian markets; it just happens that Liquid is based with HQ in Japan.
Q — Telegram user CN: What exact problems of traditional financing is Two Prime solving and why do you think that it is important to solve?
A — Alexander S. Blum from Two Prime: Barriers to entry are steep and favor just the elite, lack of capital formation for worthy projects, deeply restricted regional access, etc. We all deserve the right to economic freedom!
Q — Telegram user Khoidarelest: How many communities do you have and which countries are they from?
A — Marc Fleury from Two Prime: We have 42 communities and they are from the planet Aldebaraan, and 1 local community on the moon.
Q — Twitter user Aditya: There are many startup projects in many different fields so why did you choose blockchain technology?
A — Alexander S. Blum from Two Prime: Two Prime was established to mature the way we approach crypto.
Despite its debut as an alternative financial architecture after the financial crisis of 2008, crypto is yet to reach its full potential as an accretive and viable asset. The industry has largely focused on technological advancements, which has not been fruitful thus far and has overlooked its original thesis, i.e. financial applications.
In order to move the industry forward, the founders believed that industry must refocus on what works best for crypto — finance. Specifically, crypto has succeeded:
1) as a store of value,
2) in rapid fund formation, as demonstrated during the ICO boom, and
3) prevalent use of asset-backed tokens in the markets.
Building upon the strengths of crypto, Two Prime is at the forefront of the industry’s search for a new investment model that pushes the boundaries and brings trust and professionalism to the field.
Q — Telegram user Pramod: What is the role of tokens in your Two Prime ecosystem and why do you need Blockchain?
A — Marc Fleury from Two Prime: We are not a blockchain. We invest in other projects. We have no dev. We believe the industry is wasting time and energy talking about tech no one needs. We need to refocus on financial apps if we are to see liquidity return to this industry.
A — Marc Fleury from Two Prime: Good question, crypto is a dirty word and many people ask why we stick with it. In a nutshell we think the killer apps are here and it is less to do with the tech and more to do with financial applications of crypto exchanges
Q — Telegram user Toàn9ن: What is the FF Accretive Token, and what are the benefits of this FF Accretive Token?
A — Marc Fleury from Two Prime: An accretive instrument is one that has returns of cash flow in it. The proceeds from FF1 are not going to development but to allocations to partners so you get real economic backing. This backs the value of the token in a way that others don’t.
Q — Telegram user Shanky Khudia: What’s the real-world use of Two Prime ?
A — Marc Fleury from Two Prime: The real word use of the FF1 blockchain meta token is to gain diversified exposure in one single instrument. There is no tech with us.
Q — Alexandre R from GAINS: I’m reading up on the Liquid blog. I guess we’ll have FF2, FF3 and so on potentially?
A — Alexander S. Blum from Two Prime: That’s right. Each token has its own thematic focus. The first is on blockchain companies. Then we will move on to others, like Smart Cities, Impact Investing, Green Technology.
Q — Telegram user Prateek Saaho: Why did you start “Continuous Token Offering”? What problem did you find in regular ICOs or IEOs?
A — Marc Fleury from Two Prime: ICO did good capital formation but poor capital allocation because of the initial aspect. In private equity, the proceeds are over time instead of all done at issuance of seed. The IEO was a great idea that in practice turned to another pump and dump scheme we want to avoid. The CTO lets you see how the token performs and our role is to allocate to the best partners and market crypto in general. CTO solves the problems of traditional ICOs and IEOs and we expect that to take off independently of us.
A — Alexander S. Blum from Two Prime: A Continuous Token Offering is the mechanism in which Two Prime releases tokens into a secondary market and raises funds to be invested in qualified projects. Unlike a traditional ICO, tokens are not released all at once. In a CTO, tokens are released periodically, based on the token’s value accretion and demand for the token.
Q — Telegram user Christian: Two Prime claims to be a FinTech project with no tech involved, can you explain it in layman terms? Who is responsible for fund allocation once the capital is raised? Can you share your allocation model?
A — Alexander S. Blum from Two Prime: Two Prime will initially emit one million FF1 tokens into circulation onto secondary markets, such as exchanges, through a Continuous Token Offering aka the CTO. The CTO replicates the private equity approach of staged, de-risked financing and will continuously release additional tokens into circulation in line with real demand.
The funds raised through the sale of FF Accretive Tokens will be invested in well-diversified public and private sector projects through a managed basket of assets. Specifically, the FF1 funds will be invested in the blockchain sector in a structured portfolio of cryptocurrencies, debt, and equity instruments. Funds will be allocated to our financial partners such as Babel Finance and NGC Ventures with the aim to create accretive cash flows.
Q — Alexandre R from GAINS: You said you’re not really going to build a fund but instead create a ‘fundized’ token. Will you be taking fees like funds do, following a 2/20 model for example?
A — Alexander S. Blum from Two Prime: Good question. Yes, a token ‘fundized’: the reverse causality of a tokenized fund. We do not do a 2–20 model. We fund operations with a .5% fee. We succeed if everyone succeeds.
Q — Alexandre R from GAINS: Is it correct to assume the token price will follow how your investments do? If it’s backed by real assets and you invest in digital assets, what about the idea of being able to redeem one FF1 token for the tokens it represents? A bit like you can redeem some stable coins by what they’re backed with.
A — Alexander S. Blum from Two Prime: Not exactly correct. The token price is defined by supply and demand dynamics, like Bitcoin. The token can be sold on exchanges. We can’t offer direct redemptions due to regulatory reasons.
Q — Twitter user Crypto TBT: Why should we choose Two Prime over others? What is it about Two Prime that makes you more confident than other projects?
A — Alexander S. Blum from Two Prime: So I think it’s important to understand, Two Prime is not at all focused on tech. It is not a valid comparison, even though it is made often. We are focused on financial innovation.
This is what we are about:
Two Prime is a fintech company that focuses on the financial application of crypto in the real economy. Two Prime seeks to provide an alternative financial model that can bridge the gap between the traditional economy and crypto finance.
Two Prime introduces the FF Accretive Token, which replicates the private equity approach of staged, de-risked financing in a token format and will continuously release additional tokens into circulation in line with real demand.
The FF Accretive Token model can be applied to any sector, representing a well-diversified basket of public and private sector projects. Its first iteration (the FF1) will be invested in the blockchain sector and will demonstrate how a cryptocurrency — backed by real assets and value — can generate demand and velocity with rapid fund formation.
Borrowing the traditional model of monetary creation and circulation, Two Prime will initially emit one million FF1 tokens into circulation onto secondary markets, such as exchanges.
The funds raised through the sale of FF1 will be invested in well-diversified public and private sector projects for a predetermined basket of assets. Specifically, the FF1 funds will be invested in the blockchain sector in a structured portfolio of cryptocurrencies, debt, and equity instruments.
Qualifying funds and projects will receive fiat funding in exchange for the collateral, which will add to the value of FF1s and trigger the release of additional FF1s from the treasury into the secondary market. This will create cash flows on the demand side and ensure accretive value of the FF1.
This model may be replicated in a multitude of verticals such as green mining and smart cities, offering a first-of-its kind purchasing option that brings real value to investors.
Other projects can do well and we hope they do! This is not a zero-sum game. This is a game of abundance! We invest in others we have no blockchain tech we are a purely financial play at the moment.
A — Marc Fleury from Two Prime: We are not another ‘project’ we represent many projects. We are a meta token. If you hold a FF1 you are holding on many crypto assets, a diversified basket.
Q — Telegram user Khoidarelest: Why should users and investors invest their money in Two Prime in the long run?
A — Marc Fleury from Two Prime: Investing in the FF1 meta token is getting exposure to the best of crypto: top currencies, DeFi lending and hard-to-get-into funds. You invest in your own portfolio.
Q — Alexandre R from GAINS: Will you make public all the investments you make? Maybe only reveal some after some time?
A — Alexander S. Blum from Two Prime: We will, but sometimes we can’t announce right away because of restrictions from our partners and regulation. We have one big fund that everyone would know that we have invested in already that we can’t yet name. Stay tuned.
Q — Telegram user Zing: Why is Centralized Finance still better in your opinion while many are talking about Decentralization?
A — Marc Fleury from Two Prime: The financial system is highly decentralized and we are kidding ourselves in the industry with our talk of decentralization. That is a story we tell ourselves and one of the hard truths we debunk. That being said the killer apps are financial: store of value, capital formation and asset backing the FF1 meta token rolls all this in one.
Q — Telegram user Pramod Sankhla: What are the main reasons that you think that the enterprise economy should be decentralized?
A — Alexander S. Blum from Two Prime: I like this question because it is such an assumption we don’t really agree with. We are not following the orthodoxy of the crypto industry. The enterprise economy can do a million things. We are purely focused on the financial applications of crypto and believe much of the tech is a waste of time and energy. Let’s get real. Wake up!
Q — Telegram user van: How does Two Prime staking and node work? Would you be so kind to elaborate the process and details of staking including token economic, dates, requirements, etc?
A — Marc Fleury from Two Prime: We are not a blockchain. We are a simple ERC20 token. We do not depend on staking and adoption and do not add to the confusing noise in our space.
Q — Telegram user Wu Lei: Continuous Token Offering (CTO) of Two Prime is quite new at this moment and none of the exchanges out there has this type of model applied. However, with a fast-changing market like crypto, I’m pretty sure that there will be some projects that will take this idea and upgrade it sooner or later. Have you ever thought of this situation?
A — Alexander S. Blum from Two Prime: We would love for others to replicate this model. That’s the goal! What we would do is pat ourselves on the back and then keep working
Q — Telegram user Sicxa: Are there any new partnerships and interesting upcoming use-cases?
A — Alexander S. Blum from Two Prime: Many, can’t wait to share them. Most recently we announced SPiCE VC as a partner:
Q — Telegram user Crypto Future: What are your key terms of partnering with SPiCE VC & NGC Ventures?
A — Alexander S. Blum from Two Prime: Groups like these are where we allocate funds to. You can learn more about the program here.
Q — Telegram user maranatha: How secure is the Two Prime ecosystem. What’s the utility and real life use case and application of the FF accretive token?
A — Marc Fleury from Two Prime: We host with a trusted and known partner. We don’t hold anything. The utility of the token is financial as it represents the best of the breed diversified basket.
Q — Telegram user Mission: Why should I believe that you won’t run away with your investors’ money?
A — Alexander S. Blum from Two Prime: We are known public people. Marc previously sold a company for $350MM USD (JBoss, sold to RedHat). We aren’t kids that need your $100. We are truly focused on maturing this industry.
Q — Telegram user Edogawa Conan: How will Two Prime solve the problems of scalability and security?
A — Marc Fleury from Two Prime: We have no tech. This is not a tech play. It is a financial play. We raise money to allocate to the best crypto projects
Q — Telegram user Shanky Khudia: We are witnessing many projects enter the blockchain industry with very good plans, promise to do good work but disappear in time and lose community. How can Two Prime survive this long and challenging blockchain industry?
A — Marc Fleury from Two Prime: That is a fair question and this is what we are trying to change in this industry. Instead of taking risk on one project you invest in many through us. That is the theory and practice.
Q — Telegram user Crypto Future: Is there any chance that Two Prime will fund partnered portfolio companies to grow with the Crypto FinTech model?
A — Alexander S. Blum from Two Prime: I’m not sure what you mean by fund partnered portfolio companies. What we do is fund venture funds and companies we like. You can apply at here.
Q — Telegram user Srintiel: Are you in touch with popular retail platforms like Walmart or Amazon to implement your technology for fast payment?
A — Marc Fleury from Two Prime: We are not a technology, much less one for payments.
Q — Telegram user Mikurana: Since starting the project, have you achieved everything you planned or did you have to make drastic changes to your main idea at the start?
A — Marc Fleury from Two Prime: Since the beginning we have pretty much done what we set out to do. The message has evolved rapidly to what it is now: a better way to invest in crypto. We are done soon with the first phase leading up to token listing.
Q — Telegram user Zing: What are the major issues you are seeing in the current financial application of crypto? Which projects are your closest competitors?
A — Alexander S. Blum from Two Prime: Somewhat similar groups, though we are encouraged by them and don’t see them as competitors but allies, are AMUN and Grayscale.
Q — Telegram user God Is Not Dead: Can you share about your present and future partnerships that will drive you to success in this highly congested crypto space?
A — Marc Fleury from Two Prime: We share your opinion on too much congestion. We allocate our proceeds to partners not to our own. So essentially we raise money for others and invest in the name of others. We are very selective as to what gets invested and believe in financial applications rather than tech no one needs.
Q — Telegram user Kri Pro: On which type of market and user base is the Two Prime project mainly focusing on?
A — Marc Fleury from Two Prime: We are targeting retail crypto investors that do not have the time or knowledge to pick funds and currencies or simply do not have access to the type of funds we are partnering with. On the other hand we are targeting institutions and family offices that want to get into crypto and have exposure but the only thing they know is the scams so they wonder how to do it safely.
Q — Telegram user Kotex: What are your marketing plans to reach more users?
A — Marc Fleury from Two Prime: Our marketing plan is to actually do a lot of marketing outside the crypto echo chamber: PR and education to attract fresh liquidity that is looking for a safe way in. Asset backing is the best you can do in crypto which usually has no assets, bear in mind that our first product is blockchain so a large portion will remain with cryptocurrencies but some of our LP private equity partners are real economy.
Q — Telegram user Phira: What do you view as the potential barriers to the success of the project?
A — Alexander S. Blum from Two Prime: I think we are already successful. Do you want to join in the success?
Q — Telegram user Nhan: What do you think about DeFi? Do you plan to expand your business with DeFi?
A — Alexander S. Blum from Two Prime: DeFi is a pretty broad and undefined term for all. I think generally, financial services that work outside of traditional banking and finance rails are interesting. I like Dharma especially. But generally, it’s a far way away from being ready for prime time.
Q — Telegram user van: What is the 2–5 years plan for Two Prime and its ecosystem?
A — Marc Fleury from Two Prime: In 2 years, we would love to see this financial approach applied to other verticals like smart city financials.
Q — Telegram user Bondan Perek: What is Two Prime’s roadmap in 2020? What goals do you want to achieve?
A — Marc Fleury from Two Prime: More exchange listings so we can expand liquidity, continuous raise done around FF1 and allocations to partners. We are on our way to these goals.
Q — Telegram user K 1: In the future, what will be the main goal of TwoPrime?
A — Alexander S. Blum from Two Prime: To Abundance
Q — Telegram user T L: What’s your outlook on the future of cryptocurrencies? What can we do to keep increasing adoption?
A — Alexander S. Blum from Two Prime: Back crypto with real financial instruments and adopt the Continuous Token Offering model
Q — Telegram user Mission: Can you explain why crypto is dying?
A — Marc Fleury from Two Prime: Lack of liquidity.
Thanks for coming and answering the questions Alex and Marc! I think we’ve all understood what you want to do: a token fundized to invest for people. Thanks to your expertise and connections you’ll create a diversified portfolio to hopefully make great returns :p — Alexandre R from GAINS
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