Markets are never easy to read, but our ETH.BTC.USD strategy had quite a few good calls recently. We know how difficult it is to sustain over time, but we have delivered so far since we started pushing trading signals on our platform napoleonx.ai.
There has been a mix of innovation and stability, which is essential to assess performance over the medium term. We still believe we are in a bull market for cryptos even though we had corrected since the highs a few weeks ago.
First fund launch process
As we have regularly communicated, we are in the final stages to file a first fund with the AMF, the French Regulator. As we have said all along, we want to manage a fund with an AMF supervision as it is the only way we will be able to distribute them to professional investors and financial institutions.
Over the last few months, we have seen a change in the market structure, especially on BTC with increased volume on the CME BTC Futures and a significant increase in the number of larger BTC portfolios (over 1,000 BTC). Larger players are now driving the volume and prices.
We have decided for the first fund to offer simple market access to BTC for traditional investor having taken into account their constraints. The fund will be structured using cash and BTC Futures listed on the CME. It is just a first step, but an important one given the lack of solutions for traditional investors.
In order to achieve our goals, we need the following actors for our fund to be regulated by the AMF and manageable from an operational standpoint:
1. Broker/dealer: it allows the fund to execute transactions
2. Clearer: it enables to chanel the transactions from the broker to the custodian
3. Custodian: it holds assets on behalf of the fund
4. Valuation agent: it values the fund on a daily basis
5. Fund auditor: it certifies yearly fund accounts
6. Legal: it writes the needed documentation
7. Asset manager: Napoleon AM
All these roles need to be filled by regulated traditional actors, and we have identified all of them and negotiated their intervention. It’s a question of days now before signing in the last actor who is the custodian. We will communicate on this as soon as it’s done.
Once all is signed, then the filling at the AMF will take place, and the regulator will have 30 days to come up with any comments on their side knowing that the proposed fund is within our scope.
Past this delay, the fund will be opened for subscription. We will provide the seed, for an amount much beyond the 150 ETH that were earmarked during the ICO. We should start with 300k EUR.
DAF fees to NPX holders
During the ICO, we have promised 85% of the performance fees for the first 10 DAFs, the management fees of each of them being kept by Napoleon AM. We have set the various strategies that would be used for the DAFs during the ICO, but given recent development in crypto strategies, we might consider making some swaps for these first ten vehicles. So technically the first fund that we envisage to launch will not be a DAF.
For the first fund, that will provide a simple market access; it is not possible to charge performance fees to investors. However, even if this fund is not a DAF and no performance fees may be generated, we have decided to share 85% of the management fees to NPX token holders on this first fund as long as we have not launched the 3 first DAFs that will be structured with performance fees.
Management fees of this first fund will be payable on a monthly basis to NPX token holders with a 2-month lag for funding purposes. Management fees will be paid in ETH to the NPX token holders.
Regarding performance fees, the AMF only authorizes a payment once a year, at the beginning of the new calendar year. So performance fees will be calculated at this time of the year and payment will be spread over the following 12-months (evenly spread) to incentivize NPX holders to keep their tokens.
To claim your management/performance fees, you will be required to enter into a sub-license agreement through our napoleonx.ai platform where the contractual terms will be disclosed. So you will need to register your tokens and accept this agreement which will prevent you from sub-licensing the tokens elsewhere.
1. For the management fees, the amount payable to the token holders will be proportionate to the time they have continuously hold the token prior to the payment date.
2. For the performance fees, the amount will be proportionate to the number of days you have continuously hold the tokens over the calculation period for these performance fees. You will then need to continuously hold the tokens the subsequent 12-month distribution period to collect them in full.
Payments should be made monthly in ETH to the registered address. Once Napoleon AM receives the payment, they will be kept in EUR and converted in ETH just before the payment is released to NPX token holders.
We are now entering into one of the most exciting time of our development. We want to thank all of you for your patience and support. We are proud that we keep on delivering on all our initial promises in this project as very few crypto projects have done so.
We hope to outperform like in the development of all the new pure crypto strategies that we have done or in the launch of Napoleon Software recently. Have a great summer and stay tuned for some info as they will arrive.
Stephane IFRAH, NapoleonX CEO