Jonathan DeCarteret, CEO at INDX Group. INDX are launching a masternode fund using the Swarm STO platform.
Can you introduce yourself and your role in INDX?
I’m Jonathan DeCarteret, CEO at INDX Group. Previously I founded Switch, which I build to become the UK’s 60th fastest growing company.
What is INDX?
INDX is the world’s leading Masternode Tokenized Investment Fund. INDX token holders receive a passive income in addition to any appreciation of the token NAV. 50% is paid directly to our token holders and 50% is reinvested back into the fund. Our proprietary algorithm selects a risk-managed portfolio of Masternodes, which is then fed to our tech platform to spin-up and securely collect the rewards. INDX is an asset-backed regulatory-compliant security token, fully tradable on exchanges that gives investors liquidity with zero exit fees and the opportunity to increase their investment returns. The INDX STO is aimed at qualified investors only.
Why does INDX have the potential to deliver ROI?
As a regulatory compliant business, we can note specify returns. However, our trial portfolio is achieving a yield of just over 130%. We expect this to reduce as we scale up the full $15m fund and have modeled around 40%. This is due to the algorithm’s filters, which prevent it from taking too big an exposure to less liquid or volatile projects. A forecast 5-year study is provided here.
In what currency will the yield be paid back to investors?
ETH, BTC and at a later stage Fiat.
How will the INDX portfolio be composed and will the masternode portfolio be public?
The INDX algorithm selects the portfolio according to the following equation.
- x1=Maximum Masternodes traded per day
- x2=Maximum days since Masternode genesis block
- x3=Maximum number of days to create a position
- x4=Maximum number of Masternodes to acquire
- x5=Maximum ratio of cost-to-yield
- p=Position size for risk parity
- VOLUME: All Masternodes in our investable universe are subjected to a volume filter based on daily trading volume. It is critical to remove illiquid Masternodes that take too long to enter or exit our position and presently unacceptable spreads.
- DD: The next step is putting each Masternode through a rigorous due diligence checklist. We want to create the safest universe possible from which to select our positions.
- STABILITY: We then exclude any Masternodes that are less than ‘x’ days old, this measure ensures the Masternodes are mature and have had some price stability with a short time to prove their worth in the market.
- POSITIONING: We then add a secondary volume filter; this time to measure how long it would take us to enter our preliminary portfolio positions.
- VOLATILITY: The fifth filter is related to the volatility of the position and aims to create risk parity across the portfolio.
- COST: The final filter is concerned with cost-to-yield ratios, avoiding positions where the maintenance cost to spin up and host the Masternode is too high relative to the rewards.
An investor dashboard will provide a broad (time delayed) overview of our holding
INDX is in the process of launching an STO, what are the key dates and what are the requirements to invest?
Due to regulatory restrictions, the INDX token is only offered to qualified investors as defined by their local jurisdiction.
The token sale date is May 1st 2019 and will close June 30th.
Why did you choose Swarm as the platform for the INDX STO?
Having reviewed the main issuance partners, we concluded Swarm as best in class. Their Swarm protocol allows us to maintain a dynamic register of the cap table and ensures only qualified investors can hold the token.
Post ICO will do you envisage the token being traded on exchanges?
Absolutely. The Swarm token allows us to be compliant with Open Finance Network and we are the launch partner for the upcoming regulated exchange London Block Exchange. More exchanges will be listed as the market matures.
Can non-accredited investors by the token post-STO?
We intend to strike a partnership with Tzero that would allow the INDX token to be opened to retail via their network of broker-dealers.
What are your favourite crypto projects and why?
I consider Hedera Hashgraph as a breakthrough in distributed consensus and I can see Foam’s spatial protocol will have many use cases.
Would you like to add more information?
I think what best demonstrates our deep thinking in this space is the hedging strategy to protect the fund from any flash-crash. This ensures as far as possible, INDX is protected from the downside while capturing all the profit from a bull run. The signal to hedge will come from Keltner Bands. These are volatility-adjusted upper and lower bands to the top of, and to the bottom of, the Exponential Moving Average (EMA) of the closes of Bitcoin (BTC). They are set to a volatility factor, Average True Range (ATR) multiple, away from the EMA of the BTC closes. In our case, we use a 20-day ATR with multiples set at 1.50 and 2.50, while referencing the 20-day EMA.
For more information please visit: INDX
We thank Jonathan DeCarteret for the interview.
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