What is the project?
Hong Coin is a distributed venture capital platform–in their words, “Everyone’s VC on the blockchain.” The project will launch something structured like The DAO–people will seed the fund by purchasing ‘shares,’ influence how the seed funding gets invested, and earn money based on the returns from that investment.
Hong Coin introduces a twist: a professional management team proposes how the funds will get spent, while shareholders will vote on the final investment. For this reason, then call themselves a DO–a distributed organization, not totally autonomous. The management team sources opportunities, performs due diligence, and interfaces with the community. Quorum has been set at 20% with a 15-day voting period – if 20% of the total token voting power approves the investment within 15 days of proposal, funds will be allocated.
Shareholders also vote on the professional management team. The management team earns a fee for advising on investments (2% of total funds). For the first year, the management team will be the project founders, and in year 2, tokenholders can vote to change them if they want.
The market for such a fund would be those interested in becoming small-scale investors, while blockchain-based projects (like those currently holding ICOs) would be seeking funding from them.
The fund will run on an Ethereum smart contract protocol.
The whitepaper acknowledges that there are legal dimensions to their project (for investors and the fund itself), but that they are still working on the best model.
What is the token being sold?
The token being sold is a ‘shareholder’ token that gives rights to manage and make decisions for the fund. It’s based on a smart-contract and voting mechanism through the whole life cycle on investment. They can also vote on the fund management team–who’s accepted and how they will be held accountable.
Presumably, the share of total tokens one holds represents their voting weight. The tokens should be tradeable.
What are the terms?
Participation: Everyone can participate this “grassroots VC” by executing a smart contract on the Ethereum blockchain. The json for the contract is here, and the address is (0x9Fa8fA61A10Ff892E4EBCeB7f4e0FC684C2ce0a9 ). Find more information here. In addition, at any point during the ICO, investors can withdraw their investment, but afterwards, they cannot until year 3, in which holders could freeze the entire fund and withdraw their capital.
Pricing: Pricing will be based on the total number of tokens sold, with 50 million tokens being sold at each price tier. The schedule is below.
- 1st stage — 1.00 ETH for 100 Hong tokens (total 50M tokens)
- 2nd stage — 1.05 ETH for 100 Hong tokens, (total 50M tokens)
- 3rd stage — 1.10 ETH for 100 Hong tokens, (total 50M tokens)
- 4th stage — 1.15 ETH for 100 Hong tokens, (total 50M tokens)
- 5th stage — 1.20 ETH for 100 Hong tokens,(total 50M tokens)
Funding Conditions: The project will launch as long as 150M tokens are sold (approximately $17 million at $11/ETH). If it doesn’t reach this within 30 days, the ICO period will be extended another 30 days. If it doesn’t reach the target, all funds will be returned.
Bounties: The bounty program is here. Smith+Crown’s read of their smart contract is that 2M tokens have been allocated for bounties (approximately $220,000 at 1st stage pricing an $11/ETH)
Who is the team behind the project?
Isaac Mao is the director of the project. He has served on the Board for the Tor Project, been a fellow for the Berkman Center at Harvard, and has his own Wikipedia page. The rest of the team is currently unknown.
He’s also responsive to email and his team is responsive on their slack channel.
- Hong Coin website
- Whitepaper [which includes fund management details]
- Project Roadmap
- Bitcointalk announcement
- Video Overview
- ICO Terms (most recent version we could find)
Smith + Crown does not collect money or bounties for posting these announcements. All of Smith + Crown’s announcements for ICOs should not be construed as investment advice or an endorsement. In addition, some of the information contained above may be changed after we posted this; we urge the reader to read all source material before investing or passing judgment. If you see anything that has become obsolete, let us know.
ORIGINAL RESPONSES TO S+C QUESTIONS
What is the ‘elevator pitch’ for your project?
Everyone’s VC on blockchain
What is the market for your product?
Booming startups on blockchain needs more widely funding sources, especially from blockchain itself.
What are key unique features about the protocol that you would highlight?
It’s based on Ethereum smart contract protocol, but whole new concept based on Man Machine Teaming model.
What is the token actually being sold?
The token is a shareholder token to manage and make decision for the whole fund. It’s based on smart contract and voting mechanism through the whole life cycle. Though it’s similar to traditional share holders, more beyond that, token holders can decide the accountability of fund management.
If applicable, please provide details about the underlying blockchain
HONG is built upon smart contract on Ethereum blockchain, so it’s not a genesis, but an add on to well use the digital currency for real world value-adding.
What will you do with the funds?
Together with community to invest into early stages startups connecting to blockchain.
Who do you consider to be your competitors?
Traditional VC, but we are actually collaborators.
Why is your solution better?
Decentralized, Democratic, Transparent and Borderless
Who is behind the project?
Isaac Mao and team, Former Board Director of Tor Project