When I used to help Iconomi with building their fund management platform I always wondered if decentralized asset management on the Ethereum blockchain would ever really work. I also wondered how effective it would have to be to attract users, particularly after seeing how complicated things were when we were building the platform on a centralised infrastructure.
Over the last two years, I have kept my eye on promising decentralised platforms such as Melonport and Prism by Shapeshift.
Melonport looked like there was more marketing than actual execution and two years since their ICO there is still no product on the mainnet, despite their secondary ICO. Although they are supposed to go live in February 2019, I have since lost a lot of faith for their product. This is primarily because they were not able to deliver a product until now despite an abundance of capital raised. I also get distracted by teams who are more into marketing and attending conferences than building things. There is also news the company is shutting down and leaving protocol development to the community, potentially due to most of the ICO money being spent, their non-compliant fundraise or a shakeup in the founding team.
Prism by Shapeshift, on the other hand, delivered a product and I kept on using it. The platform worked well and got user traction, but in last September Shapeshift decided to close Prism down and to “focus on the core platform, and to clear the pallet for a potential reimagining of what this technology can do later on.” I think the other part of the reason was the approach they used when enabling users to pool funds. Their system pooled funds into a smart contract and Shapeshift needed to hedge opened positions, either by letting someone take the other side of that trade (go short) or constantly trade same positions on open markets. As much as I am aware there was no direct linkage from users to exchanges and this created a lot of efforts on Shapeshift’s side. The other potential reason why they canceled the project could have been due to high fees they initially imposed (1% per month) and later canceled due to many complaints by users.
So it all comes to one survivor in this space called Rigoblock. I have deep respect for the founder Gabriele Rigo who managed to put decentralized asset management platform live without doing an ICO. The platform is in beta and also live on the Ethereum mainnet. Rigoblock’s UX works great despite having a decentralized infrastructure. For me, the most important thing is the protocol’s integration with Ethfinex Trustless exchange where liquidity from both order books of Ethfinex and Bitfinex is provided. I won’t go into detail on how it works, but there is a great FAQ written by Gabriele. The team also recently released a new API which allows developers to build on top of the already functioning protocol.
Rigoblock is powered by the GRG token, where an incentives mechanism is built around the Proof-of-Performance (PoP) algorithm, which aims to get rid of management fees and performance fees for investors so that pools operators get automatically rewarded in GRG tokens. In order to qualify for the reward, each pool operator must hold a dynamic minimum amount of GRG tokens. Token holders have the governance function which sets the rewarding mechanism parameters.
Although many of us still have doubts about utility tokens in general, mainly because of all the nonsense ICOs were trying to offer with their tokens, I still believe there are cases where they make sense. What we have learned thus far is that utility tokens make sense only if it has a useful governance function applied to it because this is where the network value is mostly accrued. It is hard for me to count projects in the space which offer that, but my favorite would definitely be MakerDAO.
Looking more broadly and into the Ethereum ecosystem space, I also believe that currently only the projects dealing with some sort of financial application make sense. We can already see that DEXes and other financial application protocols are the most utilised and useful protocols in Ethereum ecosystem. Which makes complete sense since the crypto ecosystem participants are in essence mostly dealing with financial services (trading, fundraising, arbitraging, lending, etc). There is not a better way to confirm this as to point at ICO as the first Ethereum killer DApp.
This is why I am supporting the development of decentralized asset management and Rigoblock in general. Having been in crypto and ICO space for many years I almost left the space when I saw marketing skills outweighed overall product development.
“The function of investing is productive capital allocation. What we have seen in crypto over the past few years was unproductive capital shuffling or redistribution from naive risk takers to promoters rather than mindful risk takers to product builders. Perhaps it’s time investors become more diligent about their investments and more successful products get built.”
Gabriele Rigo is one of the best solidity developers out there and and his team built Rigoblock from his “garage” before holding a token sale. Further to that, one of the things which make them stand out is regulatory compliance: in a conversation with Gabriele, I was able to understand how they approached the Swiss regulator FINMA before running the crowdsale and obtained official classification of the token as an utility token, and regulatory exemption for their business model.
Despite the ICO bear market Rigoblock token sale started last month and is still ongoing. I have no doubts for him or for the platform because seeing how much can be done with true passion and focus on development is what makes great things.