Smart Valor have just recently concluded a successful ICO summit in Zurich, organized on Sep. 15, 2017. Switzerland has of late emerged as an incubator for crypto projects, with big names like Ethereum having been developed in the Zug Valley.

Switzerland and Europe as a whole is now emerging as a center of start-up action and Smart Valor are keen to leverage the possibilities that are emerging as a consequence. The Swiss offers a stable and a neutral political environment and is known to be a competitive country with an excellent standard of life. The Swiss are also levelheaded, and perhaps that can be judged by the comment of Nicolai Oster, Head of ICO, Bitcoin Suisse who noted:

“In Switzerland ICOs have never really been the Wild West. At Bitcoin Suisse, we handle ICOs since 2014 and we handle it as a monetary business. It’s money we are transmitting, it’s compliant, it’s regulated, and that’s why I think the best quality projects and the safest are being created here in Switzerland. We never really had this Wild West attitude.”

It is amidst this backdrop that the first ICO summit was organized.

Smart Valor, organizers of the ICO Summit

Smart Valor is in the process of building a protocol that would create a distributed ledger for issuance and distribution of investment solutions. It would be comprised and be of benefit of all stakeholders. Smart contract based incentive mechanisms would be deployed in this protocol. The added advantage is the Swiss ethos of the project which ensures that privacy and security get high priorities. In short, Smart Valor are building private banking Swiss style but putting it on the Blockchain. This would make quality banking and investment solutions more accessible to more people than ever before. Investors will benefit by getting access to a wide variety of asset classes, asset issuers and funds would be able to access liquidity and reach out to a wider investor base and facilitators would get benefits of a Blockchain solution built from the ground up to provide transparency.

Gaining better understanding of ICO phenomenon

One of the reasons Smart Valor chose to hold this summit was to better understand the Initial Coin Offering (ICO) phenomenon and how it is changing startup funding. A carefully curated program was crafted in order to bring together industry experts and advisors so that they could share their knowledge on how successful ICOs are conducted. Michael Terpin of Transform Group, Richard Kastelein of Cryptoassets Design Group, Ransu Salovaara of TokenMarket, Daniel Zakrisson of ICONOMI and Dominik Zynis of Wings were some of the participants. The Zug Crypto Valley was well represented as well by Niklas Nikolajsen, CEO of Bitcoin Suisse, and Olga Feldmeier, CEO of Smart Valor.

Tokens are a new asset class

Tokens, which are issued during ICOs to fund new projects and startups are coming of age as an asset class of their own. They are also posing a dilemma for regulators, this was discussed at the ICO Summit with William Mougayar, General Partner at Virtual Capital Ventures suggesting that it would not be long before these would have to be recognized by regulators as an asset class. He said:

“There is precedent for this for all those who remember General Georges Doriot, known as the father of venture capitalism, and how he forced a rewriting of the US Securities Act of 1940 to allow for stocks to become a new asset class. … And that was something new and now stocks are regulated. … A year from now I can predict tokens are going to be regulated and be accepted as a new asset class.”

Addressing investor risk

When we talk about ICO investing, we are talking about a completely different animal than traditional Venture Capital Investing. Investing in startups has always carried some risk but it can be that ICO investors have different motivations and different outcomes.

Jamie Burke, Founder and CEO, Outlier Ventures described this at the ICO Summit:

“The key distinction to make is that as an investor in an ICO you are not investing in a startup anymore. If executed really well you’re investing in a digital economy and actually you’re backing a community to execute on that. ... That really changes the dynamics because if you look at typical VC investing, 90 percent of startups will fail and all the value will be lost and all know-how and teams dissipate, and that is a really inefficient allocation of capital and a really inefficient way to do innovation.”

He added:  

“What is most exciting about this space is that companies that were previously developing proprietary technology and probably on the trajectory of that 90 percent are now looking at open sourcing their intellectual property. For me, that is the most exciting thing, but it also makes investing in this space I think less fragile. You can talk about valuations and all this stuff, but you are not valuing a startup, you’re valuing the ability of a community to execute on an open source project. These are less likely to fail because if any one team fails to execute the open source community can pick it up. So I look at it almost as a relay race rather than a sprint.”

Bitcoin and ICOs will thrive even if China ban materializes

The recent actions of the Chinese government in banning crypto exchanges in the East Asian country may have cast a pall of gloom on ICOs and tamed down some of the excitement but it is certainly neither the end of digital currencies like Bitcoin or ICOs.

As Olga Feldmeier, CEO and Founder of Smart Valor put it:

“What we hear from China these days is of course very worrisome. It is not good news. But will it really be a significant breakdown or problem for Bitcoin? I don’t think so. We have seen the same thing already in Russia a couple of years ago. Putin said he would throw everyone in jail for four years if they simply touched Bitcoin. But what happened? The country became one of the largest volume traders. Concerning China, I am not worried. I think it is a great opportunity to buy for those who didn’t.”

Charles Hoskinson, Founder of IOHK added:

“Why is anyone surprised that a country like China that built a giant firewall, is upset and scared about free money, especially when they have capital controls? Right now we have a changing regulatory environment and it’s frustrating, but the truth is, the genie is out of the bottle and we are in control of our own money. In tokens, we have found the stem cell of asset classes and we can do whatever we want to with it. As a consequence of this freedom, we now have a lot more responsibility as individuals, but we also have a lot more financial freedom.”

ICO Summit creates a positive momentum

There were over 500 attendees at the Zurich ICO Summit and another 2,000 joined through livestream. People came from 30 countries to be at the summit. Smart Valor managed to pull off the summit and make it a grand success. They also managed to dispel some doubts about ICOs and showcase the potential they have in redefining funding for emerging projects and startups.

This is a nascent stage for ICOs and also for our understanding of this new emerging model of raising funds. It is perhaps why that Smart Valor will hold a second edition of the ICO summit at the beginning of 2018. It is through these type of get-togethers that self-regulation can emerge and the quality of ICOs be improved. A new code of practice, if it emerges would be of great help to investors, facilitators as well as asset issuers.