As of autumn 2017, assets under management by the hedge fund industry were estimated at $2.5 tln. A Japanese venture is set to reshape this booming marketplace through Blockchain technology, and aims to challenge the handful of dominant players in the sector by seizing a 1 percent share of the sector.
SPINDLE, which plans to connect cryptocurrency hedge funds and users easily and on an equitable level, successfully completed a private sale earlier this year, centered predominantly in Japan. The investment matchmaking platform now hopes to go global. Its blockchain-based system is designed to make investments and the cryptocurrency market available to everyone, regardless of their background or wealth. Its platform ‘ZETA’ will use a combination of blockchain and smart contract technologies to create an environment where information on investment opportunities is delivered with “utmost transparency,” enabling investors to directly communicate with fund managers and make confident decisions based on reliable information.
The project also wants to increase the amount of information about assets available to fund managers. One way this will be achieved is through using Ethereum smart contracts to create a transparent and easy-to-access record of all transactions associated with an asset. Both fund managers and private investors will have access to a complete, tamperproof history of an asset through ZETA.
Creating “autonomous human beings”
SPINDLE is being developed by the Blackstar Group, which is based in Shanghai, London and Tokyo. Its ZETA system would be unveiled in four stages.
The first is ZETA-1. Free and based on blockchain, ZETA-1 is a monitoring and reporting service that enables investors to confirm fund profiles and past transactions as well as visualize their asset management history. The system is designed so all recorded information cannot be altered at a later date. SPINDLE tokens – or SPD – are going to be used on the platform, with the company’s white paper confirming that token holders will not be subject to fees or commissions in most cases. Cryptocurrency funds are also being given the opportunity to join for free.
SPINDLE says this would be followed by the release of ZETA-2. The project claims that some of the exchanges currently available in the marketplace are centralized and “potentially dangerous” – putting assets at risk of theft. ZETA-2 aims to remedy this by launching an “atomic high-speed distributed exchange”, which eliminates issues such as scalability and transaction delays, resulting in an experience for users which is not dissimilar from using a centralized exchange. This system would be complemented by a “trustless follow trading system” where an investor can pay to emulate another user’s investment strategies without the need to entrust assets operating on outsource.
Data accumulated from both ZETA-1 and ZETA-2 are going to be used by SPINDLE to launch a “distributed credit scoring system” known as ZETA-3. The project argues that current mechanisms used by credit referencing agencies no longer guarantee fairness and says its solution would be “independent of specific individuals, companies and countries.” Objective transaction data gathered from ZETA-2, as well as ratings between users, will create “fair and adequate scoring” – enabling users to receive a “real assessment of economic freedom.” From here, users will be able to borrow and lend SPD tokens, and those with higher scores will be able to enjoy “active, more challenging investments.”
All three stages pave the way for what SPINDLE describes as “credit autonomy,” with ZETA-4 using “overwhelmingly accurate transaction information” as well as artificial intelligence-based analysis and evaluation to achieve “dominance” over conventional referencing agencies.
Roadmap and ICO
SPINDLE says it started to develop the first stage of its ZETA system at the start of 2018. Its decentralized exchange will begin production in the middle of the year, while the implementation of decentralized credit scoring will start in 2019. Finally, SPINDLE hopes that the fourth and final stage of credit autonomy will be achieved towards the end of 2019.
The project is headed by hedge fund veteran Masamitsu Hirai. Over the course of his career, Hirai has worked as a fund manager and adviser at Funai Soken Holdings Inc, head of derivatives at a Malaysian hedge fund, and CEO of an independent investment management company in Japan. Hirai is also CEO of Bullion Japan Inc.
SPINDLE’s crowdsale is scheduled for May 9 to May 15 2018.
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