New Asset Class with ‘Continuous’ ICO Model

Recently, Hong Kong saw setting up a new fintech startup Two Prime that focuses on the financial application of crypto by introducing a diversified investment model. As a new startup, Two Prime is trying to surprise the world and offer ingenious ideas. Yesterday, the firm announced the launch of FF Accretive Token (FF1) which is ‘a brand new asset crypto class’. According to the company, Two Prime’s FF1 Token combines the features of a close-ended fund, asset-backed token, and a secure store of value.

Today, we are delighted to announce the official launch of Two Prime and FF Accretive Token – a brand new #crypto asset class that combines the features of a close-ended fund, asset-backed #token, and a secure store of value.

Learn more on Medium: https://t.co/GwzRwvhwmm

— Two Prime (@two_prime) January 16, 2020

According to Two Prime, the sale of tokens will take place not in the form of an initial coin offering (ICO) but as a Continuous Token Offering (CTO).

As Two Prime has explained, CTO means the FF Accretive Token replicates the private equity approach of staged, de-risked financing. Initially, the company will release five million tokens, which is 5 percent of the total of 100 million tokens. Over the next 10 years, Two Prime will release additional tokens according to the demand.

Alexander S. Blum, Two Prime COO, stated:

“In stark contrast with VC or PE structures that lock up limited partners to their investments for years, ICOs provided a liquid instrument for purchasers who would normally not have access to seed stage investments. In this sense, ICOs were a game-changer. Unfortunately, in a classic case of misallocation, many ICOs in 2017 wasted their proceeds on useless tech, lavish parties, and illicit activities. With the CTO, Two Prime aims to bring traditional asset allocation to crypto in order to reignite rapid fund formation, restore the industry’s reputation, and professionalize the crypto markets.”

In addition, the company stated it will initially list FF1 on the Japanese crypto exchange Liquid in February. As for the price, it will start at $3 per token.

Risks Two Prime’s FF1 Token Could Face

The company’s team consists of professionals. The founder of Two Prime is Marc Fleury, the creator of the JBoss application server. Besides, among the company’s executives are finance and technology leader Alexander S. Blum and an experienced portfolio manager Thejas Nalval. In addition, the team includes a veteran Software Engineer turned entrepreneur Erik Stenflo.

However, a board of professionals can not guarantee avoidance of risks the crypto industry faces. First of all, these are regulatory risks.

Any startup that deals with token offerings should be ready to feed in the existing regulation and conduct their activity in accordance with the active laws. In order not to repeat Ripple‘s mistakes, Two Prime has consulted with law agencies. Let us recall: 2019 became a tough time for Ripple as several investors complained over the nature of XRP being a ‘security’.

According to Two Prime, they have found a proper approach to reduce potential risks. Moreover, the company will back its tokens by real-world assets. They will comprise a portfolio of debts, cryptocurrencies, and equity instruments. Besides, these assets will be managed by professional portfolio managers.

Two Prime seems to be well-prepared for the volatile crypto world with its challenges. The company aspires to professionalize the crypto industry by focusing on the financial applications of crypto to the real economy. And its FF1 Token is a way to accomplish the startup’s mission.