We finished the third quarter with another set of achieved milestones: we issued ICONOMI securities, added credit cards to the platform, and introduced new tokens to our users. All these new features contribute to the end result, which is still mostly influenced by market dynamics.
We all know how Q3 was in those terms — there was a significant drop in crypto prices with a spillover on the volume and general interest. Even though the crypto development train is still moving full speed ahead, the “winter months” can be extended beyond what the market expects. With that in mind, we are also changing ICONOMI on both fronts — revenues and costs. On the revenue side, we are exploring options to tap into different segments of the crypto market. On the cost side, we are continuing our effort to bring down costs.
Looking at Q3 our revenues decreased, but the rate was smaller than the market drop. The reason behind this is that activity on the platform is rising, not just the number of funds, but also the rebalance activity rose. Staking revenue dropped significantly due to decreasing our staking position and the market’s drop.
On the cost side, we are still seeing optimization coming into effect. Compared to last year’s third quarter, we halved the costs (1.32 M vs. 0.68 M). Salaries are still, for the most part, followed by other costs and services.
Our balance sheet reflected the market dynamics. In Q3 it dropped 30% from 53.8 to 37.7 M. We sold Aergo and part of our LISK position.
In Q3, we finished the first round of issuing Profit Participation Securities of ICONOMI AG. There were more than 1,200 investors that received almost 21 M in securities. The second round will happen in January 2020, so if you still have ICN tokens you need to make a decision about converting them into securities or ETH by 31/12/2019. After that period, the ICN token story ends.
Besides the conversion process, we made other updates. The first performance fee came into effect. We upgraded our API with the possibility of doing an API rebalance. That means that crypto hedge funds that want to have their algorithm behind can do so via API communication. There was credit card activity, even though this is heavily correlated to the market dynamics.
Outlook for Q4
The last quarter of 2019 will bring many new changes. On the operational level, we are making changes so that our costs can be slashed by half again next year. That also means our “boat” will be smaller, but faster. We imagine ourselves as quick explorers who need to find the next opportunity.
And one such opportunity is Power Mango — earning passive income through DAI stable coins. We see that area as a new opportunity, that will bring new customers/users into the crypto industry. We know that interest rates are historically low, and somewhere also negative. That pain has to be addressed with new alternatives, which also include concepts such as stablecoins, staking, and more.
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