ICONOMI introduces Repayment Program
The first quarter of 2017 yielded positive results for the actively-managed ICONOMI.performance DAA. Since its introduction ICONOMI.performance has acquired Golem, Byteball and Santiment. First two have already yielded positive results, while Santiment is not yet publicly traded. Golem investment proceeds were already realised and measure 1,000 ETH, so we decided to distribute them back to ICN token holders. We are aiming to set new industry standards with the ICONOMI repayment program, which will be used for the first time ever in the second quarter of 2017 and will serve as a proof of concept.
What are the options?
The distributed economy established new asset classes — ICN is one of them. New asset classes require new standards and features, as the concepts from the old economy are no longer viable. One of those is the distribution of created value.
Today’s’ companies are using three main mechanisms to return value to financiers: dividends, stock, interests and buybacks. The first one is practically impossible to realise in the distributed economy because it needs 100% collaboration with exchanges. Interests are also not relevant for our case. The third common form of value distribution to asset holders are buybacks.
Many companies in the traditional financial system frequently employ the buyback method. When assets are regularly purchased on the open market, the demand and purchase of the open sell position pushes prices up. The assets that are bought back can then either be held by the company (as a form of reserve) or taken out of circulation.
The Distributed Economy Way
Buybacks are pointing in the right direction but are still not completely aligned to the concept of the distributed economy. We understand ICO as a process where investors have contributed their assets to the ICONOMI project. ICONOMI is performing well, we have available assets and we want to return them to contributors.
Technically speaking, we will systematically buy ICN tokens on exchanges and “burn” them. That means that we will actually return their contribution at the current market value of the token. “Burning” means that purchased tokens will be taken off the market, with the consequence that the total supply of ICN tokens will decrease. This option represents a fair way for everyone, especially if conducted transparently.
The mechanics of the Repayment Program
The Q2 2017 repayment program will be performed in a predetermined manner as follows:
- 1,000 ETH will be used to purchase ICN in a 90 day period starting from 1st of April 2017.
- Purchases will be made on a weekly basis.
- All token repurchases will be performed on open markets.
- ICN tokens will be repurchased at a price that does not exceed the highest independent bid or the last quoted transaction price. This should not inflate the market price and rather serves as a price support.
- Purchase volume should never reach more than 20% of total ICN volume traded in the last 24 hours.
- Every purchased token is burned — removed from the outstanding balance of ICN tokens.
- ICONOMI will disclose its ICN purchases i.e. total number of tokens purchased and the average price paid per token in a quarterly report for Q2 2017.
The ICONOMI repayment program and transparency are key parts of our mission. Repayment program ruleset is in accordance with market standards known in the old economy, and sets best practices for the new economy, and simultaneously serves in the best interest of ICN holders. We will report all its repayments in a quarterly report for the period ending on 30th June 2017, where all important milestones will be thoroughly described.