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Zichain – Taking Index Funds into Crypto

Zichain is a Switzerland-based crypto finance company, who launched the world’s first cryptocurrency indexation and analysis service in December 2017. Khachatur Gukasyan, the Co-Founder and CEO, told us all about his company, how they are going to change this industry, and what he sees on the horizon for Asset Management as a whole.

Tell us about Zichain

I was working for an investment bank last year that had recently moved into the crypto market, because this was something that private clients were really interested in. I had been talking to a friend of mine who wanted to launch a crypto-based fund for their client. As I already had experience with launching and managing various types of funds, I looked into this for him, but no way existed to successfully launch a fund that would be dealing with cryptocurrency. We decided to build a solution and, eight months later, we are getting things properly started.

Soon after the initial launch of this platform, I wanted to invest in the crypto markets, but I had no time to choose between all the different coins – I found it all confusing, and the information out there was not particularly helpful. The easiest way to understand the market is to buy index funds. I asked my friends and clients “is there a possibility of launching these indices within the crypto marketplace?” The answer was no, so we launched five index funds in December 2017. This launch of a family of crypto indices was the first of its kind in the world.

With the first two products launched, the next problem I saw with the current market was that there was no easy resource to get all the relevant info about the various tokens, coins, and assets within the crypto market. So we decided to launch a hub for all of this information to be viewed and shared. We are now ready to start the operation of the whole group in a couple of months, building upon the parts of the platform that are already done. The final piece of the puzzle that fell into place was launching our crypto-fiat exchange – four products in total. We’re just going to continue to develop and launch, whilst simultaneously also developing the legal structure and basis for all of this.

The company is made up of 3 main pillars – the technology, the business itself, and the legal part. The most amount of time, to be honest, has been spent on the legal side of the business, because of the regulations causing difficulties in the countries in which we work. That has made our job harder, but we have been working hard to solve these issues. Our name comes from ‘Zi’, which is Chinese for essence, and ‘chain’ represents our blockchain focus.

What do you think about the current products in the market?

I think you can divide this world into several parts. Firstly, you have the very clever guys, the geniuses, who have a vision of what the world will be like and will develop into, and they are developing the products that are changing the world. Secondly, you have the category in which we fall into, the people who see the crypto-space as just being a new form of old business, we don’t see it as being some kind of ‘crazy new thing’. At the end of the day, it’s just part of the continuing development of digital payments, throughout the financial world. We are not really tech guys, we are more involved in business – that is our background. We have been working with our clients for many years, and we can tell what they want and what they are interested in. So we know that there is the demand here, within the asset management industry, for these crypto-based solutions. The end goal for us is to make it easier for people to work with these type of assets. And finally, you have this third part, the people who are developing these new and innovative tools that can be used by people like us, that can be incorporated into our platform.

What markets are you taking your product to?

First thing I would point out is that, thanks to the tech itself, our product can be exported globally – like anything else utilising blockchain. Our first task is to focus on Europe, a guaranteed network for us – a place and market that we have intimate experience of. By Europe, I mean the EU and Switzerland, and with a major focus also on the United Kingdom. Then, once we have fully realised our solution in Europe, we will move onto Asia – we are already talking to potential clients there. Then, the third stage will be the USA. It is the legal and regulatory challenges that force us to take a region by region approach, not actually the tech itself. But in the end, our goal is to cover as much of the world as possible with our product.

You’ve recently launched your private token sale, can you tell us a bit about that?

We started the private sale in April, it was the third round of investment for us. The first round was the initial fundraising, in autumn 2017, and was followed by investment from Asian investors in March buy generic levitra uk 2018. Then we decided that our next step was going to be a token sale, because it made sense for us, as all of our new clients were within the wider cryptosphere. If it becomes necessary for us to raise some more funds, then we will move to a public sale, but for now it’s just for our friends and certain accredited investors.

What function will your token have within your platform?

It’s going to take the form of a classic payment token. You can use all of our services without our token, but if you want to take advantage of a discount, then you can use our tokens for payment. This discount will apply to all the services. Secondly, we are going to collaborate with different companies who are working on similar services in the sector, and get their services on our platform. And then the discount will apply in a similar way to those services as well. Finally, we will use the trading of the tokens on the market to reward different members of our team, and also to fund our services.

What products will you be looking to release next?

All of the products on our platform can function as standalone products, which means we can launch them at different times. Once we have everything finished, we want our platform to basically be the entry point into the crypto market for as many people as possible. One of the main ways in which we can do that is by utilising our exchange, which allows for the easy transition of fiat money into various crypto tokens. We have developed our MVP, and are working with our legal partners in order to get it to the stage where it is ready to go, as a fully licensed platform. Once we have successfully launched our four products, then we can start looking for the next ‘right’ thing to develop – we have several ideas!

Looking at the ecosystem as a whole, what do you see happening with blockchain and tokenisation, and the application to asset management and financial services?

I believe the Asset Management industry is the one in which blockchain technology will change things the most. To illustrate this, you can look at how, right now, you basically have two routes if you want to become an asset manager. First route is when you choose the right university, the right company, talk to the right people, and then progress upwards from a junior portfolio manager position. The second route is when you go out and get a core client, raise some seed capital, and you launch your fund. This takes a lot of money, but it can work out a few years down the line.

The one thing that these routes have in common, is that they take a lot of time – and that is what solutions like ours are going to change. When our platform is ready, instead of it taking 4-6 months to launch your fund, it will take 4-6 minutes. You will need zero investment in infrastructure, it won’t cost you anything and you will need to make no hard commitments, you can just try it out. Therefore, it can open the door to everyone who is talented in this field.

We are also tackling the issue of what to do when you are looking for clients, after launching your fund. We will try to make our marketplace the most interesting part of the market, with plenty of visibility – getting your product out there to a lot of clients. We can’t solve the issue of whether or not you have talent, but if you do then we want to welcome you to the industry, and give you all the tools that you need. As for the ‘tokenisation’ of assets and utilising DLT technology, it is fundamentally changing the role of asset managers.

It’s difficult work – it will take us approximately 10-12 months to finish the product with all of the legal issues that we are having to deal with, and working on the software. But the end goal is that someone could launch their product, with no counterparty risk, and get themselves seen by the rest of the marketplace.

What do you think of the state of the industry as a whole?

In the last year or so, we have seen huge changes, with a lot of people from the classic financial industry moving into the crypto-space, because it is the place where the infrastructure is becoming a commodity. Suddenly, the time between having an idea and a proof of concept has been cut from several years, to just several months. This is a great thing, and it will enable the best minds in the world to do more than they thought possible. You now find that with the right network, people are making impossible things possible in a very short timeframe. It is not a new world, but it is a new form of an old world. If we were going to think about launching a new product in the next 3-5 years, it may all be completely different, because everything is going faster than ever before. Everything people have dreamt to do, they now have the option to do.


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