The Iconomi team has been working diligently to bring the to the world. The new era of development often comes with new hurdles, especially if the concept is an original… from which all others will be derived. first digital asset management platform “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough,” Facebook founder, Mark Zuckerburg. Iconomi has been cautious in their release, slowly and steadily rolling out the Open Fund Management Platform ( ) beta, but moving rapidly to develop and improve their already revolutionary concept. Taking the first steps to set best practices, and potential standardization in the space, Iconomi announced today their new strategy for returning value to (Iconomi platform ownership tokens) holders — . OFMP ICN the buyback As defined by Investopedia - What is a ‘Buyback?’ A buyback, also known as a repurchase, is the purchase by a company of its that reduces the number of its shares on the open market. Companies buy back shares for a number of reasons, such as to increase the value of shares still available by reducing the supply of them or eliminate any threats by who may be looking for a controlling stake. outstanding shares shareholders — Iconomi has decided to opt for a more efficient (and likely a more regulatorily favorable) value disbursement method. will be purchasing ICN tokens for the from the open market. The ICN tokens that are bought by Iconomi will be (meaning: destroyed by a smart contract) thus decreasing the total supply of tokens in existence. This will be a one time burn/buyback, it will be continuous. ICN will not be paying out dividends Iconomi buyback burned ICN not The continuous purchasing of tokens (buyback) will be done with: ICN management fee annually of the fund. 3% ICNX of the funds realized gains. 20% ICNP A of management & re-balancing fees of all user created on the percentage DAAs OFMP. Any fees generated by the to the Iconomi platform (fees from people buying Eth from the Iconomi team) fiat on ramp Dividends vs. Buyback Dividends create a variety of problems in the asset space, one of the primary concerns is paying dividends to tokens held on an exchange. Dividends would be sent to the exchange’s custodial address, not the individuals who should own them, as they are the custodian(holders) of assets on their exchanges. In order to allow for a dividend disbursement to an exchange holding address, all of the exchanges would have to agree on how to handle the dividends, and the exchange could potentially just keep all distributed dividends. Most people in the cryptospace are aware that holding assets on an exchange has high risk (see: ) and the dividend payout would only compound that risk. digital Mt.Gox There is also the transaction cost of sending dividends to ICN holding addresses, as there are currently thousands, and it is likely there will be MANY more in the future. There is a small fee (ether’s transaction cost - gas) for every transaction that occurs on the network, this cost will reduce the value that could have been gained by ICN holders, but there is a way to reduce this cost dramatically: through buybacks. Having a dividend pay out pretty much guarantees that an asset will be considered a security according to regulators - which means heavier regulation concerns and government interference. Switching to a buyback value distribution method puts ICN in a more favorable position and may potentially enable it to be used in many more jurisdictions around the world, resulting in further use and thus a greater value potential. The case of lost ICN holding address keys/passwords is also important. The infant cryptospace is filled with the unfortunate mishandling of important data. It seems that almost daily there are new stories of people who lost their passwords, accidentally deleted important files, or their computer broke and they didn’t have a backup of their wallets. Certainly many of you have heard about . It would be a very unfortunate situation to be penalized by others mistakes/errors — and that is exactly what would happen to ICN holders if those mistakes occurred with the dividend structure. The dividend payout in eth would be sent to those “dead” addresses creating a loss for “responsible” token holders — the eth that could have benefited ICN holders would be lost providing no gain to those who it should have benefited. The buyback solves this problem too. Instead of dead addresses receiving eth, all “responsible” ICN token holders will benefit double, as the dead addresses essentially burned the ICN tokens in them, and the buyback funds that would have been sent under the dividend model will now be used to further increase scarcity. the guy who accidentally threw out millions of dollars worth of Bitcoin (THEY WILL AND HAVE ALREADY) Dividends are seen as a definite return in a specific time period and would likely be taxed as such in that time period. For the case of buybacks, gains are uncertain, and unrealized until they are sold. This creates a situation of a sort of compounded interest with differed taxation. If you don’t sell, your value may grow untaxed, until gains are realized. The percentage of ownership of ICN you hold will grow as long as there is some amount of buyback power in Iconomi (mentioned above: continuous purchasing). Buyback Improvements Summary Solved (gas) to send dividends to 1000’s of accounts Solved/Improved Improved contribute to further increase of responsible token holders value (perfected) compounding interest with differed taxes until you sell, potentially improved Improved liquidity, price support — if platform indexes do well, guaranteed liquidity. Holding on an Exchange — Transaction costs — Regulatory classification — Dead addresses — Tax Situation — Liquidity — A Creative Solution The buyback-burn method seems to solve many potential problems that dividends would have brought up, while still providing an equivalent ( ) value distribution solution to ICN holders. Currently there exists 100 million ICN tokens, 87 million being openly traded and owned by the public, with 13 million held by the Iconomi team for future funding needs. This means that in less than a week, the number of tokens in existence will begin to decline or deflate. The lower the price is when the buyback is occurring, the more tokens that will be burned, further increasing the scarcity of the tokens. probably greater Beginning April 1st ICN tokens will start getting burned. The percentage of ownership that you hold will increase as the burning of tokens continues. So, if you wanted to have regular, realized gains from ICN tokens, you can simply sell some to keep your ownership percentage constant. YOU WILL NOT NEED TO DIMINISH YOUR PERCENTAGE OWNERSHIP TO REALIZE GAINS — a common misconception. This is a visionaries token — for the long-term. The longer you can hold, the greater potential value distribution you will get. The majority of ICN tokens haven’t even left the yet, and have never even touched an exchange - this could be because most people got ICN with the intention of holding for the long haul. Now, instead of those tokens sitting dormant and taking in value via dividends, they are creating an incentive for weak hands to sell. Their dormancy will ramp up the price, as there will be a continuous buyer — Iconomi, but relatively few sellers. After a few major burns, its possible that long-term holders will be the only ones left, creating a major run-up in the price. wallet ICO The fundamentals remain basically the same, the changes added improved efficiency and security, maybe even some additional regulatory favor. If the Open Fund Management Platform ( ) and the two flagship funds ( & ) do well, then the holders benefit. Only now, there is a test of holding will power. If they perform exceptionally, then there will be buybacks in the future, burning amounts of ICN tokens. The strong-hands, the true believers of the platform, will be continuously increasing their ownership share and their access to value distributions, while weak hands simply take small short-term gains. OFMP ICNP ICNX ICN big major One last thing… If you liked this article, please click the Heart button below and share with anyone interested in the cryptocurrency/digital asset space. Follow for more informational articles. Crypto tips and donations for the writer - : 15DwdqGPKiG4spkdfU8YGWMbGEH1zDxmip Bitcoin Address (all Eth based tokens accepted): 0x2C4D78F9d65bD52C9B54b96a637B60f25161F041 Ethereum Address Also check out the Future Asset Management & pages Facebook Youtube
