Telegram Q&A w/ Zichain
Our Q&A sessions are becoming a great tradition! Last Monday’s one attracted no less enthusiastic audience than the first or the second sessions. Zichain shared insights in employing BAMP for crypto asset management and gave answers to all the blockchain-related questions. Take a look at the highlights of this discussion.
What are your plans for the Asian market?
We are planning to provide applications and white label solutions based on our products.
What are the tiers? Will it be possible to purchase access to them via ZCN?
Our three tiers of service are Silver, Gold, Platinum, and, surely, you can purchase access to them via ZCN.
And what about risks? The white paper document says that BAMP is going to reduce risks. How will this be realized?
The main goal of BAMP is to eliminate counterparty risks in asset management. BAMP provides decentralized storage of assets and real-time verification of investment policy statements, thereby ensuring the highest level of security.
Well, as far as I understand, this is a kind of decentralized PAMM service, which almost eliminates non trading risks by preventing a single player (a broker) from managing the whole process?
Yes, you are right. BAMP distributes access to customers funds between BAMP, asset manager and investor. In order to make a transaction asset manager needs to get approval from the platform.
And what about Investment Policy Statements (IPS)? Is this a kind of offer?
Investment Policy Statement is an agreement between an investor and an asset manager that describes investment strategy, general terms and conditions and other aspects.
And why do you use blockchain in this case? I see it is PAMM alike. Am I right?
The blockchain is needed to distribute the access to investors’ funds. Using the multisig feature of cryptocurrencies, we are able to prevent any theft on the fund manages part.
You say in the white paper that the funds will be sent to a manager’s wallet. Well, is it safe enough?
It is safe since the wallet is created with multisig. The fund manager is not the only one who has an access to the wallet, it is also an investor and the BAMP platform itself. The fund manager can transfer funds to other wallets for the purpose of trading or rebalancing. For this case, we have a sub-account feature: fund managers transfer funds to cryptocurrency exchanges, but the platform is able to supervise all transactions.
I have seen your MC calculation formula. However, as far as I know, MC is calculated as price*total supply. Why do you use weighting coefficient?
The weighting coefficient is used in our Currencies, Services, and Platforms indices. It is used to cap the maximum rebalancing weight of a particular cryptocurrency in the index at a 25% level. Capping is usually applied to provide better index diversification.
I saw you’ll have your own exchange. Will this work like p2p or will there be margin trading as well?
Zichange will work like a broker. We don’t plan to margin trade in the near future.
Are you going to rebalance your blue coins index monthly?
Rebalancing of every index is done on a monthly basis.
What if a coin enters into the Top-5 in between your rebalancing procedure?
We capture the Top-5 cryptocurrencies in a certain moment of time (every first day of the month at 12:00:00 UTC). In other words, our rebalancing procedure is done instantly and in an automated way. According to the methodology, the index constituents do not change until the next rebalancing, so the Top 5 is fixed for 1 month.
So, as far as I understand, you rely on your own calculation formula and not on Coinmarketcap data? And what is the main advantage of your formula as compared to CMC?
Currently, we use Coinmarketcap and CryptoCompare data for market capitalizations and prices. The index methodology is developed by Zichain. We are now in progress to obtain the prices and trades ourselves in order to provide more accurate market data.
The Coinmarketcap doesn’t have a formula for calculating indices. However, it has a full control over the displayed value of a market capitalization and leaves a place for manipulation. We develop a solution to estimate the market cap of any cryptocurrency regardless of coins in circulation, burned or vested tokens.
What do the list of strategies look like? What will I see there?
Investors can choose a strategy suitable by the various risk-return parameters: set of cryptocurrencies, active/passive trading, fees, counterparty risk, and hurdle rate.
I have read in your white paper that the exchange will have high liquidity! Will you provide it for less popular coins and, if yes, how?
We’ve established relations with a number of OTC brokers and exchanges. They are our liquidity providers. Liquidity problems of less popular coins will be solved using our advanced execution systems
I saw that you create wallets for each IPS. Then in the white paper I saw you transfer all the funds to Ethereum wallet. Can I use an Ethereum wallet or what?
In our MVP, you now can use your Ethereum wallet to invest in funds. The fund manager will build up a portfolio of different cryptocurrencies using your ETH, so to properly store all assets in portfolio, we need to create wallets for each cryptocurrency.
What are the platform wallets and what are they for?
Asset managers can use these wallets in order to rebalance their portfolios.
My last question is about the single entry point. What do you mean by that?
ZiChange aims to become your exclusive guide to the cryptocurrency world. With us, you will only need a single and unified solution to enter the cryptocurrency market, invest, trade and receive news and market data in one place.
How many tokens have been sold so far?
Our pre-sale ends in 4 days and we plan to publish a press release regarding the TGE this week.
I’ve got some questions about your blockchain asset management platform. What are those funds strategies? And what kind of information can I find there as an investor?
On BAMP, a fund manager can create an investment strategy which other users can invest in. As an investor, you can see real-time performance of a strategy (NAV, returns, fees, risk measures, as well as the location of funds and history of trades and transactions).
And what is NAV? I found this in the white paper along with risk measures,fees and returns when you describe performance of choice and strategies.
NAV stands for Net Asset Value which describes the actual price of an asset after all the costs are paid.
Great. Being an investor, I don’t have to learn anything about trading, do I?
No, it’s a fund manager’s job :)