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Why

Why

With so many new cryptocurrencies emerging every day, it can be very time consuming to determine which coins are the real deal and which ones are not. Furthermore, once you've determined this, many of the good coins that have merit still have to face huge tasks in order to become a working reality. Its risky stuff. So rather than promising ridiculous potential future income and capital benefits that so many coins are trying and failing to do, we offer rational, understandable and real income deriving investment strategies. These investment strategies are conducted through established mechanisms already evident in the crypto markets. The funds that we raise will be invested into cryptocurrencies, meaning that your money won't be travelling anywhere other than as established in our funds criteria herein.

How It Will Work

How It Will Work

Cycoin is an asset backed coin, backed by the cryptocurrencies we purchase as we conduct Cycoin’s investment objectives. As detailed below (see Coin Democracy), Cycoin holders will receive voting power over the pool of cryptocurrencies. We will hold selected currencies that are established and real (usually in the top 100 by market cap) to conduct margin lending activities and take advantage of arbitrage opportunities that arise periodically in the crypto markets. We will also allocate a portion of the fund to invest in curated pre-ICO's and ICO's which will be carefully scrutinized and selected by the team and external professionals in the crypto markets.

Funds Criteria

Funds Criteria

The funds we raise will be invested into coins that are listed on exchanges, like Bittrex and Poloniex, which provide margin lending facilities. Funds will also be invested into arbitrage opportunities where sufficient trading volume is apparent. The funds will also be invested into select initial offerings of coin called pre-ICO's and ICO's. At present, a signals app is in development to help identify good arbitrage trades and 5% of funds will be reserved for development, legal and startup costs. The initial investment of funds will be to purchase and then lend the pool of coins held via a number of exchanges. This will be done in order to immediately start earning income whilst we sort through attractive pre-ICO's and ICO opportunities and until arbitrage opportunities are apparent.


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Four Core strategies will be employed

Margin Lending

Margin Lending

For the first month, initially 100% of the fund (less the development reserve mentioned above), then thereafter, a minimum of 50% and up to 80% of the fund will be converted to crypto currencies and placed across a number of exchanges for the purpose of lending those currencies to traders on the exchanges to earn margin lending interest. Margin lending interest differs depending upon the currency and according to supply/demand disparity. They range from .02% per day to 5% per day.

The Cycoin team will open funding wallets on major exchanges providing margin lending facilities to traders, such as Poloniex, Bitfinex and BitMEX. On each exchange, we will assess the market of lending rates offered for differing currencies and place our funds for loan at rates that will ensure relatively quick investment. For short term loans, within 2-3 hours and for longer term loans, within the day.

Longer term rates often exceed shorter term rates. We will seek generally to place our funds on loan for 15 – 30 day periods. All rate versus term markets will be monitored across each currency offered with each investment decision made to ensure maximised yield.

We will convert all margin interest earned to Bitcoin and Ether and distribute this to Cycoin Wallets proportional to the amount of Cycoin held monthly.

Opportunistic Arbitrage

Opportunistic Arbitrage

Up to 30% of the fund will be dedicated to talking arbitrage profit. Because cryptocurrency exchanges are not interlinked, at times the price of the same asset may be different on two different exchanges. We will asses these differences and if attractive, take the opportunity to buy the asset at a lower price on one exchange and sell it at a higher price on the other.

We will utilise our Arbitrage App to collate price information of all currency pairs for all exchanges globally that have price and volume API data available. Our App will indentify and calculate instances where there are two of the same currency pairs on different exchanges which differ in price. The App will provide a signal to identify an arbitrage opportunity is available.

The Cycoin team will check and verify each currency pair opportunity signal, assess the probability of securing the arbitrage profit against price gap, volume traded, currency pair network speeds, exchange transaction costs, exchange transaction speed, currency network fee and if attractive, the decision will be taken to buy the low price and sell the high price on each exchange.

Our analysts have identified meaningful arbitrage opportunities with good depth of market displaying consistent net profit achievable of 2% per trade.

The price difference is called arbitrage profit and does not involve trying to predict the future updward or downward movement of a currency, as you would if you are trading the asset.

Arbitrage profit will be distributed monthly.

Pre-ICO and ICO investments

Pre-ICO and ICO investments

Up to 50% of the fund will invest in good Pre-ICO and ICO opporunities. We will employ a range of external professional services to deliver up pre-vetted, curated opportunities. The team will select which of these looks to carry well founded and logical business goals, displays real world or digital application, are more likely to be widely adopted and the business goals appear to be achievable relatively quickly and can be liquidated easily. Profit will be converted to Bitcoin and Ether and distributed quarterly.

The Cycoin team access a number of processional ICO assessment networks such as CoinList, ICOBench and Smih&Crown analysis services, as well as angel investor networks, to source pre-vetted ICO opportunities. We also monitor the ICO market generally across a wide range of ICO listing sites as Coinrating, ICO drops and ICO hot list in order to identify ICO opportunities which have merit for assessment.

We will gather our own research on each identified opportunity and collate this monthly for short-listing, where those opportunities fit within the criteria mentioned above. Short-listed opportunities will be tabled for assessment by the directors of Cycoin and a decision to invest or not will be finalised and acted upon each month.

Fund Income Reinvestment

Fund Income Reinvestment

10% of the income derived from Pre-ICO and ICO investments will be retained from distribution and reinvested along with the general fund to increase the amount of crypto currencies held. This will serve to compound the earning capacity of the fund and increase the asset backing of the coin for the benefit of Cycoin holders.



Fund Commencement

4-6 Months after Commencement

Coin Democracy

Coin Democracy exists to provide confidence and security to the Cycoin holders. It is the link between the entity which holds the pool of cryptocurrencies backing Cycoin and Cycoin holders, giving you real power over your investment.

Our asset backing is set in stone by virtue of our coin democracy. After completion of the ICO, the following legal and technological processes will be undertaken and implemented on an ongoing basis.

All of the crypto assets behind Cycoin will be divested by the Cycoin company into a trust and the beneficiaries of the trust will be Cycoin holders. This means the Cycoin company does not own the crypto assets backing Cycoin, effectively you do.

We will establish a democratic voting system within our blockchain where each Cycoin will be entitled to one vote. Voting will govern what is done with the crypto assets with a majority vote deciding.

This structure has been put in place as a safeguard to Cycoin holders so that if anything goes wrong to the extent that more than 10% of the crypto assets backing Cycoin are lost for any reason, Cycoin holders may vote to distribute all of the crytpo assets back to Cycoin holders. It a mechanism designed to ensure control of the assets remains with Cycoin investors.

This innovation has not yet been done in the cryptocurrency markets and is an all time first for Cycoin. This mechanism is designed to give effect to real asset backing and real control to investors over the fund.

It is also designed to give the ability for Cycoin holders to a cast a vote on any new initiatives introduced for benefit Cycoin holders.

For more detail see our Whitepaper.

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