Frequently Asked Questions
Q: Are the AICOIN Tokens going to be held by the Singapore company or distributed to purchasers?
A: The token holder has 3 choices;
1. The Singapore company can host the tokens – token holder retains control of private keys.
3. For people that are concerned about managing their private keys the tokens can be hosted in a secure Panxora account. The token holder will need to go through the KYC process to take advantage of this facility. Contact [email protected] for more information about this facility.
Q: Will there be more AICOIN Tokens created in the future?
A: This is a one off issuance where we will exchange one AICOIN Token for 0.01 bitcoin. After end of the subscription period no further tokens will be issued.
Q: How are bitcoins stored during the ICO?
A: When investors deposit bitcoins they go into BItgo Multi-sig wallets.
Q: Does everyone have an equal vote when selecting start-up investments?
A: Everyone’s vote is weighted by the number of tokens they hold. An important point to make is that the structure of the ICO is a collective. The AICoin tokens are not purchased, they are exchanged for bitcoin. The AICoin tokens are then owned and held by the holder, the bitcoins and other cryptocurrencies are held, collectively, by all token holders as are any equity or convertible debt instruments invested in by The Collective (the combined token holders).
Q: Is it possible to make an early exit from AICOIN?
A: We are aiming to ensure a liquid market on a number of exchanges, including Panxora. To facilitate this, and ensure an exit path for investors, part of the mandate from The Collective in the terms is that up to 10% of the Investment Pool may be used to buy back coins at 5% below the current asset value of the coins. This will provide an ongoing opportunity for investors to take profits even if new buyers are not aggressively purchasing the tokens. These tokens that are purchased back will then be offered to the market at 20% over what they were purchased for. Because there will be no further issuance of new tokens we believe that, as we build a portfolio of promising seed investments, demand will increase for the coin, above its asset value.
Q: If I commit to buying AICOIN now won’t I miss the bitcoin price increasing?
A: When you commit to buying AICOIN your bitcoin are retained as bitcoin until the ICO is over. Just before trading starts the value of your bitcoin will be converted.
Q: What protocol is AICOIN built on?
A: The coins are built on the Ethereum platform and are ERC-20 standard.
Q&A from Reddit AMA July 2, 2017
Q: When I explain this to people, I am asked, “How is AICoin different to Iconomi?
A: Iconomi is a platform which allows people to hold a basket of digital assets in a convenient form, which are then rebalanced as market capitalisation changes. AICoin is an active trading model that looks for inefficiencies that it can exploit in the cryptocurrency markets to generate excess returns.
There is also another very important difference and that is the Investment Pool. By utilising the combined expertise of our token holders; the “wisdom of the crowd” effect, to select the best seed investments in the fields of AI and blockchain I believe we can create a stronger set of portfolio companies than even the best VC’s.
Q: What inspired you and your team to begin this project?
A: The answer to the second question … the genesis moment. I was working with the developers on the AI model and the original plan was a simply a “passive investment fund” where investors could invest funds and have AI models trade their capital for them and charge a management fee. At the same time for my own benefit I was looking at making an investment in some small start-ups. What struck me was how limited just my own resources were when making those investment decisions. I like the concept of the DAO but wanted more security and structure and the ability to invest in equity and convertible instruments as well as digital assets – that’s where the second pillar of the investment process came into being. The blockchain provides the perfect mechanism to harness the voting and the presentation of information to investors which is how it became an ICO with the holders of the tokens also being “The Collective” who, collectively, own all the assets. Like a modern day cooperative.
Q: Are there development plans for another platform for AICoin? Will the User Interface for the exchange of the information evolve?
A: One of the enhancements currently in development that will be released prior to the formal subscription period is an Open Source wallet. Holders of the coin can either host the wallet themselves or have it hosted on our site. This wallet will provide the communication mechanism with the token holders. They will be able to: 1. See upcoming votes (and execute those votes) 2. See information on the candidate companies 3. Drill down and see the pitch decks and other information 4. Ask questions to the companies (via the investment committee)
There will also be open channels where token holders can discuss the merits of the different propositions prior to a vote.
The key for us is the governance – we are committed to this being a genuine collective where the token holders decide how their assets collectively are utilised.
Q: Will the AI trades be fully disclosed to token holders?
A: Yes, all trades will be published no later than 4 hours after the trade has been completely executed (execution may, in turn take a number of hours to minimise slippage). In addition all results and assets will be independently audited and the audit report made available to token holders.
Q: The models are profitable now, how do you know they will remain profitable?
A: The models are designed to adapt to changing market conditions – this is essential when working with financial markets that are non-stationary in structure. The way we look at the models, they are in an arms race with all other models and participants out there. When a new competitor enters the market and knocks the profit of the AI models they are designed, using the Genetic Algorithm selection process, to find offspring models that perform better and can outperform the new entrants – in effect they are learning to out-trade the new guys on the block.
Q: My question is simple: Does the project plan to create more AICOIN after the ICO? And is it possible to take money out of the token if needed?
A: The coin will be tradable just like any other crypto asset so you could sell some or all of your holdings in the market just as you would any other ICO. To ensure there is sufficient liquidity to absorb the selling pressure, each month the coin will use up to 10% of the funds in the Investment Pool to buy back coins in the event that there was insufficient demand in the marketplace.
Q: Is there any concept of dividend payments? Or is the only way to take profit to sell a portion of AICoin holding?
A: For the initial launch there are no dividend payments scheduled. The AICoin token, however, does support the payment of dividends. Because the governance is controlled by the token holders this can be proposed and if voted for by the majority then can be executed.
Q: Crypto currency markets are currently quite inefficient and Wintermute may well be the first sophisticated bot to enter the space. I’m assuming that it won’t be the last, so how do you feel it can keep an edge when its trading against other AIs as opposed to emotional retail investors?
A: The bots we have deployed are similar in design to those being used successfully in regular markets. Margins have certainly declined in regular markets as more models now use an AI element, they are still quite unique in the way they combine the deep learning approach with genetic algorithms. The way to look at it is an evolutionary arms race. As new entrants enter the marketplace and temporarily reduce the opportunities then the Genetic Algorithms kick in and learn how to out-trade the new entrants. As a secondary boost to this one of the reasons we have a second pillar to the strategy, making seed investments in AI companies is for exactly this reason. We won’t have all the best ideas and by investing in small growing companies in the field we have the opportunity to collaborate with these companies to build better trading models, as well as their core AI product development.
Q: how is the seed money invested in new startups translated to AICOIN book value? is it just ‘marked to the market’ at the point of investment?
A: We will follow a very conservative valuation approach on non-tradable assets. We will value everything at either. 1. The entry price of the investment. 2. zero if the seed investment has failed. 3. We will only increase the valuation to a higher than entry price when we have an exit opportunity to realise some or all of these gains. This will clearly understate the value of the successful investments but this will be coupled with full transparency of the investments so individuals can make their own assessment as to interim valuations. Obviously if we have participated in an ICO where the coins are tradeable then we will revalue basis the coin value on a real-time basis.
Q: I wanted to put some bitcoin into this because I’ve been watching the trading on ouraibot.org. But I think there are other coins that would be good to add. Is it possible to add other coins to the mix. And how long would that take?
A: Yes it is possible to add other coins. The models work on a single model / multiple market approach so we don’t train a separate model for each market. Therefore it is quite easy to add additional markets to the mix. The key element for us is that there is a liquid market in the coin. One of the things we are looking into is gathering ideas from our token holders about new coins to trade (not invest) this is something we will do before the end of the subscription and then on a regular basis after the launch.
Q: How will the decision be made to sell interest in projects? Will this be all or none?
A: It will depend upon the offer that has been presented. Where possible we will present the offer to AICoin token holders but, in exceptional circumstances, a decision may need to be made quickly. In this instance it will be made by the investment board. The typical set of options presented to token holders will be: 1. Sell none 2. Sell 25% 3. Sell 50% 4. Sell All This will be more manageable than providing an open range to choose from.
Q: What would happen in this scenario to protect coin value?:
The AI becomes unprofitable in trading for an extended period of time, the project pool is empty, there is no bid interest in the AICoin. In this scenario, could any of the AIcoin trading funds be used to directly support the AIcoin value? Could the board make a decision to directly distribute the remaining assets to coinholders? Is there any other mechanism which could put a floor on the AIcoin trading value if the project pool is dry?
A: There are 2 mechanisms here to protect token holders: 1. If there are no funds in the investment pool then the token holders can authorise the company (through a blockchain vote) to use 10% of Coin Pool funds (trading funds) to buy back AI Coins at 5% below current asset value. 2. There is a liquidation clause in the terms where if over 80% of token holders elect to liquidate the collective then all assets will be converted into the primary crypto asset (currently bitcoin) and distributed to token holders. The liquidation is likely to be over a period of time so there will be multiple distribution tranches (first the easily liquidated crypto assets followed by holdings in less liquid crypto assets and finally holdings in equity and debt instruments.
Q: Is it correct to assume that the 10% of Coin Pool funds route could be done more than once? How often? Would the option to vote for that be continuously available or initiated in some way?
A: Yes in the unlikely event that the Investment Pool remains empty for a significant period of time then this facility can be introduced on a monthly basis to ensure there is always an exit for token holders.
Q: How will the book value be updated? On a dynamic basis, or perhaps monthly?
A: The book value of tradeable assets will be updated on a real-time basis and made available on the AICoin.io website. The positions information will be updated but with a delay – this is to prevent other market participants front-running our orders. We will provide full trade details up to 4 hours after the completion of the trade.
Q: There’s sometimes a big difference in the price of coins on different exchanges. Is that a problem?
A: We actually use that information in 2 ways. 1. We feed key markets into the model as we have found that the markets tend to diverge during periods of market “stress” and that is valuable information that the models can use. 2. Once the AI models have made a trade decision this is fed into the hedging algorithm that has the sole responsibility of executing the trade in the best way (if the AI is the trader then the hedging algorithm acts as the broker). It is designed to take advantage of the anomalies across different exchanges and feed order slowly into the different exchanges starting first at the highest value (if we are selling). This has the dual purpose of maximising our returns and also making the selling (or buying) less obvious and reducing slippage. The hedging module is also responsible for managing counterparty risk. We tier our counterparties (using the same risk control methodology that we use at Panxora). Tier 2 counterparties (the highest possible for a cryptocurrency exchange) has no more than 15% of assets held with it, a tier 3 has no more than 10% of assets held with it and a tier 4 no more than 5% – this helps minimise the impact in the event of any suspension or failure by a single exchange.
Q: Could you give us an idea of the company’s plan to retain and attract developer talent as well as the possibility of branching out into other markets such as Forex.
A: We are fortunate to have some key developers with extensive knowledge of financial markets within our core founders of Panxora. One of the real benefits that I see in the second pillar of the AICoin, the investment pool, is the capability to invest in exciting new start-ups in the field of AI. While we may have a lot of experience applying these models to financial markets, we are also aware that there are always good people out there coming up with exciting new ways of applying the technology. By investing in these companies at an early stage the AICoin collective has access to these companies to develop JV’s and look at bringing their techniques to bear in the cryptocurrency field – providing them an additional revenue stream and the coinholders with an ongoing pool of exceptional talent to enhance the AI models.
Q: What happend with BTC I’ve deposited during the subscription period, if the price of BTC goes down?
A: No there will be no change in the effective valuation as you are simply exchanging bitcoin for AICoin. Bitcoins raised are still held, collectively, by all the AICoin token holders so they still hold that value. We looked at different models for the subscription period, one was to value the subscription in USD but, as the assets will be held in cryptocurrency during the subscription period then we felt it made sense to denominate the exchange rate on the same basis. We are expecting to open up the subscription to other coin types during the formal subscription period starting on 17th July. For these other coins we will value them vs btc on the date they exchanged their crypto asset for AICoins.
Q: As I understand it the cap on the number of coins is finite based on how much is raised in the ICO. I believe this is a very important aspect for consideration. Recently TEZOS ICO raised over 100 million dollars in a matter of minutes. (I still am incredulous). My question is am I correct in the market capitalization thought, and is there a minimum/maximum on the amount raised during the AI∙COIN ICO?
A: Yes the amount raised will be fixed during the subscription period. There will be no further issuance after this date. Any new entrants wanting to hold ICoin will need to purchase the coin in the open market. We have included a clause in the terms that allow us to close the subscription early in the event that we start to exceed the optimum amount that we can effectively deploy in the cryptocurrency markets.
If you have any questions, please email them to: Marcie Terman.