diff --git a/BetokenWhitepaper.md b/BetokenWhitepaper.md index f3b8d02..60950a5 100644 --- a/BetokenWhitepaper.md +++ b/BetokenWhitepaper.md @@ -1,354 +1,411 @@ -# Betoken Whitepaper Draft - -A meritocratic hedge fund built on the Ethereum blockchain. - -## Authors - -Zebang (Zefram) Liu, Guillaume Palayer - -Contact: hello@betoken.fund - -## Introduction - -Betoken is a decentralized hedge fund built on the Ethereum blockchain that invests in ERC20 tokens. It automatically redistributes control over investment decisions to managers who make the most profitable investments. This collected wisdom is compiled into good investment decisions, using a unique decision making system we call "Incentivized Meritocracy". - -The core ideas behind Betoken's Incentivized Meritocracy are: - -* The control over decisions is tokenized. -* The control tokens are valuable. -* Good decisions are rewarded with control tokens proportional to both the quality and the quantity of their benefits. -* Bad decisions receive penalties in control tokens proportional to both how bad of a decision they were and how much damage they caused. - -Betoken is for everyone: everyone can join, everyone can invest, everyone can make decisions for the fund and be rewarded for making good ones. And everyone can rise to the top if they have the merit. - -Betoken is unstoppable: it is a completely decentralized application built on the censorship-resistant Ethereum blockchain. - -Betoken is transparent: all statistics and decisions are publically available, and all fees and clauses are written in immutable open-source smart contracts. - -Betoken will make investing in crypto-assets as simple as deposit-and-profit. Research and due diligence will be done by managers in the investors' stead, all with minimal need for trust between anyone. - -Besides serving as a fund, Betoken will facilitate the collection, consolidation and sharing of data for reporting, risk management and supervisory purposes. - -## 1. The Betoken Model - -### 1.1 Incentivized Meritocracy - -An **Incentivized Meritocracy** is a system where - -* The amount of control each actor has is proportional to their ability to make good decisions. -* Actors are financially incentivized to maximize their control (therefore their decision-making ability). - -The above definition is not rigorous, since "control" and "ability to make good decisions" are not clearly defined, but it provides a general idea of how an Incentivized Meritocracy should behave. To sum it up in one sentence: the best people are in charge, and everyone wants to be in charge. The first point is the desired result, and the second point is the means of achieving it. - -Having the people with the most merit in charge is clearly good for an organization as a whole. In a hedge fund like Betoken, having the people who are the best at making investments handle the fund's investments means that the ROI (Return On Investment) of the fund is going to be of a high standard. - -Incentivized Meritocracies have never been successfully implemented before, since it is near impossible to have a centralized actor that can judge everyone impartially. However, newly-invented smart-contract-enabled blockchains such as Ethereum allow us to construct **decentralized** actors that can uphold unbreakable rules, making implementing an actual Incentivized Meritocracy possible. Betoken is the first decentralized application that incorporates an implementation of Incentivized Meritocracy. - ---- - -**Important Note:** The rest of Section 1 will be a high level description of Betoken's implementation of Incentivized Meritocracy. It will only be within the context of the Betoken hedge fund, rather than a generalized Incentivized Meritocracy. - -However, a formal and generalized description of Incentivized Meritocracies, as well as proof that Incentivized Meritocracies are indeed able to optimize the system's value, has been written. It can be found here: https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf - ---- - -### 1.2 Betoken's Solution - -There are four central ideas behind Betoken's solution to Incentivized Meritocracy: - -1. Control is denoted using Kairo (KRO) — Betoken's custom ERC20 token — that must be staked when making investments for the fund, and the amount of the stake is proportional to the amount of investment. -2. The control token KRO is valuable, in that holders of the token can expect income proportional to the amount of KRO they hold. -3. Good investment decisions are rewarded with KRO proportional to both the quality (ROI) and the quantity (profit / prevented loss) of the investment decision. -4. Bad investment decisions receive penalties in KRO proportional to both how far below 0 the ROIs were and how much money they lost. - -We provide below a description of how Betoken functions and details of Betoken's Incentivized Meritocracy. - ---- - -The Betoken fund runs in investment cycles, and at the start of each cycle there is a period of time where investors can deposit & withdraw their funds. When a user deposits $X$ Ether, they are given some amount of *Betoken Shares*, a custom ERC20 token, the amount of which is determined by the following equation: - -* $shares = \frac{X}{totalFunds} \times totalShareSupply$ - -When they withdraw $X$ Ether, they have to burn some of their shares, the amount of which is determined by the same equation. During the first cycle, when there's no money in the fund, we simply use: - -* $shares = constant \times X$ - -After the deposit & withdraw period, managers can start making investment decisions for the fund by staking some Kairos — the name we use for control tokens. Decisions are immediately turned into actual investments using the equation - -- $investmentAmount = totalFunds \times \frac{decisionStake}{totalKairoSupply}$ - -During the decision-making phase, managers can also sell any asset they invested in whenever they want at the current market price. After an asset has been sold, the fund's smart contract automatically determines how profitable the investment was and rewards/takes away Kairo based on the results. The amount of Kairos a user gets back after selling an asset is $stake \times (1 + ROI)$, so if one of your investments had a 20% ROI, you would get 20% more Kairos back. - -All investments should be sold before the end of the decision-making phase, or one's staked Kairos would be lost. - -After the decision-making phase is over, a certain proportion (20%) of total profits and is set aside as commission and distributed among Kairo holders proportional to the amount they hold. A certain proportion of fund assets (0.1%) is also set aside and distributed among Kairo holders, and another 0.1% is paid to Betoken's developers to fund future support. In addition, an exit fee (3%) is charged whenever one withdraws funds. - -### 1.3 Additional Reasons of Why Betoken Will be Successful - -While we do have a [formal proof](https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf) that Betoken's Incentivized Meritocracy will optimize the fund's profits, we feel it best to provide some additional reasons of why Betoken will be successful that are more intuitive and more closely related to reality. They will be laid out below. - -#### 1.3.1 Better Than Direct Investment - -To be able to attract people with flair in investing, we must make participating in Betoken's investment process more lucrative than directly investing in the tokens oneself. Fortunately, it is easy to prove that the model satisfies this requirement (discounting the fluctuation of Kairo's price): - -* $ROI_{Betoken} = ROI_{Direct Investment} + \frac{commission+ assetFee}{investmentAmount} \geqslant ROI_{DirectInvestment}$ - -Therefore, managers are incentivized to join Betoken and make investment decisions. - -#### 1.3.2 Analogous to Markets - -Betoken's Incentivized Meritocracy shares many similarities to markets of investable assets, such as the stock market and the cryptocurrency market. In fact, staking in an investment decision is almost exactly the same as directly investing the token, except that the ROI is better. Therefore, we can estimate Betoken's success as a meritocracy by looking at how meritocratic the stock market and other markets currently are. - -To our knowledge, there is no evidence that they are not meritocratic: no one's heard of a dumb and inexperienced investor besting market growth, and smart people (like those at Renaissance Technologies) have achieved amazing ROIs (71.8% annual on average! [[source](https://en.wikipedia.org/wiki/Renaissance_Technologies)]). Thus, we can expect that Betoken will also be meritocratic. - -#### 1.3.3 Friendly to Beginner Managers -Since the launch of our Testnet Alpha, some people have told us that they haven't had time before to do their due diligence researching and accumulating knowledge about the best crypto-assets, but want to get better at it. Betoken offers beginner managers a safe environment to grow, since they can first observe how veteran managers make investments and let the community handle the fund's money, before dipping their toes into making decisions for an already full-fledged hedge fund. - -Compared to ICONOMI and Melon, where you have to bootstrap a new hedge fund completely on your own, Betoken is much more beginner-friendly. It's the difference between getting a job at a well-established company and starting your own company. This trait facilitates the inflow of new managers into the Incentivized Meritocracy, which is essential to keeping Betoken's model effective in making decisions. - -#### 1.3.4 Cost-effective -One major painful oversight for crypto fund managers and individual investors is operations. We aim to be part of a new wave of tools to service funds and individual investors by **automating the whole buying, selling and reporting process**. Facilitating the collection, consolidation and sharing of data for taxe and legal purposes is also one of the potential key benefits of Betoken. - -### 1.4 Potential challenges - -#### 1.4.1 The Existing Regulatory Framework - -Existing regulations do not provide an appropriate framework to existing and future blockchain projects and should not be applied to those projects as-is. - -The regulatory wait-and-see policies represent a significant obstacle. Simple things such as the choice of company’s location or the fact that at any time, a directive or a legal decision can make your activity illegal. - -Betoken aims to evolve quickly if the framework and rules are updated by the regulators. The use of blockchain technology in the markets induces a change of paradigm. Since the development of blockchain-based “disintermediation” exchanges, the current regulatory regime appears to be ill-suited to facilitating growth and innovation in the Fintech community. - -More details about the constraints of applying a blockchain technology to finance can be found here: https://www.esma.europa.eu/sites/default/files/library/dlt_report_-_esma50-1121423017-285.pdf. - -#### 1.4.2 Approval, Licensing and Operating Requirements - -Betoken could need to get an approval and licensing from a national regulator, according to specific requirements in terms of operating rules, organizational structure, and human and material resources. -Once authorized, Betoken could be subject to a certain number of organizational rules, market surveillance and conduct requirements, in order to ensure that the markets are fair, transparent and efficient places, and to provide customer protection. - -#### 1.4.3 KYC and AML Compliance - -On the question of fraudulent activities and AML (Anti-Money Laundering), a robust governance would ensure that only trustworthy participants are accepted. In addition, the Ethereum network would allow for more transparency on transaction history and beneficial owners, which would enhance KYC (Know Your Customer) and help trace and prevent fraud. - -#### 1.4.4 Tax Burden - -Some challenges could also arise from the transnational nature of the blockchain. For example, a tax may apply on a given transaction depending on its place of execution. The law applicable to blockchain networks should be specified in advance to avoid conflicts. - -#### 1.4.5 Operational risks - -A mistake in the coding of smart contracts or reference data might affect a great number of participants. What would happen if the external data are flawed or become unavailable? - -#### 1.4.6 Interoperability - -Supporting cross-chain crypto-asset investment will be a major opportunity for Betoken. Solutions are emerging to handle this issue in the near future (Polkadot, Cosmos, KyberNetwork). - -## 2. Implementation Details - -### 2.1 Bootstrapping - -#### 2.1.1 Kairo's Initial Distribution - -We have decided to use a two-phase ICO as the means of distributing Kairo to the public. - -* Stage 1: Before the Mainnet Pilot, we will distribute Kairo to early adopters who want to play with and help us test the Mainnet Pilot. -* Stage 2: Before our final release, we will do a second coin offering to facilitate a wider distribution of Kairo. - -We understand that there has been vitriol towards ICOs in the crypto community, so we'd like to provide some justification for it. - -* We have considered giving out Kairo for free when investors deposit during the first investment cycle. However, we want Kairo to be in the hands of users who actually want to make decisions for the fund, as it maximizes the effectiveness of Betoken's Incentivized Meritocracy. Giving Kairo to investors who want the community to manage their funds for them goes against this goal. Doing an ICO can help ensure that most of Kairo holders actually want to participate in the fund's decision-making process. - - -* It provides us with the funding we need to make progress in the technical and community development. - -#### 2.1.2 Initial AUM Threshold - -In order to make sure that there will be enough commission to let the Incentivized Meritocracy be self-sustainable, we will set an AUM (Asset Under Management) threshold in the first investment cycle. - -### 2.2 Cycle Phases - -Each cycle is divided into 3 phases: - -* Deposit & Withdraw: When investors deposit and withdraw their funds. -* Make Decisions: When managers stake Kairo to make investments for the fund. -* Redeem Commission: When Kairo holders can redeem their commission. The Kairo smart contract is "paused" before the start of the next cycle (to prevent redeeming commission multiple times using the same tokens). - -In a preliminary setup, the lengths of each phase are as follows: - -* Deposit & Withdraw: 1 day -* Make Decisions: 28 days -* Redeem Commission: 1 day - -Totaling 30 days. - -For the functions that transitions the fund to the next phase, the successful caller can get a reward in Kairo. (similar to Ethereum Alarm Clock) - -### 2.3 Token Exchange - -Betoken uses Kyber Network as the token exchange platform for executing all of its investments. - -KyberNetwork is "an on-chain protocol which allows instant exchange and conversion of digital assets (e.g. crypto tokens) and cryptocurrencies (e.g. Ether, Bitcoin, ZCash) with high liquidity."[[source](https://home.kyber.network/assets/KyberNetworkWhitepaper.pdf)] The inclusion of KyberNetwork can minimize the number of moving parts in Betoken's operation and significantly reduce Betoken's attack surface, reducing Betoken's running and maintenance costs and increasing its security. - -### 2.5 Smart Contract Maintenance - -#### 2.5.1 Upgrading Contracts - -To upgrade the **BetokenFund** smart contract, the following steps will be taken: - -1. The old contract is paused before the Waiting phase of the current cycle, and all users withdraws their investments. -2. The new contract is deployed. -3. The owner of the subcontracts (**ControlToken**, **ShareToken**) is set to the new contract. -4. The upgrade is now complete. - -The script to do this can be found in Betoken's GitHub repository. - -#### 2.5.2 Handling Emergencies - -The **BetokenFund** contract inherits the **Pausable** contract from OpenZeppelin, so that it is possible to pause the normal operation of the fund when an emergency occurs, such as an attack or a market black swan event. When paused, an emergency withdraw function will be able to be called by users to withdraw all funds. - -One thing to note about the emergency withdraw function is that if the fund is paused when the fund is invested in tokens, things would get more complicated, since the tokens have to be sold before users can withdraw, and the amount they can withdraw would likely be different from the amount at the start of the cycle. - -#### 2.5.3 Contract Administrator - -The **BetokenFund** contract inherits the **Ownable** contract from OpenZeppilin, and the owner is given administrator rights. Calling the emergency functions, pausing and unpausing, calling the functions related to upgrading, and changing the fund's fee rates all require administrator rights. Initially, the owner is set to be an account owned by the Betoken team, so that Betoken may be smoothly bootstrapped; after Betoken has enough community support, it is possible to set up a DAO (Decentralized Autonomous Organization) contract as the owner of Betoken, so that Betoken is completely decentralized. - -### 2.6 Governance - -As we mentioned in 2.5.3, the control over Betoken's smart contracts will initially be held by our team, until the Betoken community is large enough to sustain itself, after which a DAO will be set up as the contracts' owner. We are still considering different options for how the DAO will operate, and will list them out below. - -#### 2.6.1 Votes - -There are two options for what to use as votes in the DAO: one's Kairo balance and one's Betoken Shares balance. Both of them are viable, since the interests of Kairo holders and investors of the fund are all aligned with the interests of the entire fund. However, the two choices do have subtle differences. - -##### 2.6.1.1 Reasons to Choose Kairo - -* Using Kairo as votes would add additional value to Kairo tokens, benefiting the Incentivized Meritocracy. -* Kairo holders are likely more involved in the fund's operations than investors, which means they would know better about what's best for the fund, and would have a higher participation rate. - -##### 2.6.1.2 Reasons to Choose Betoken Shares - -* It makes sense to distribute power based on the stake one has in the fund. If someone has invested a lot in Betoken, they would expect to have a big say in administrative decisions. -* More secure to attacks. Even though extremely unlikely, it is possible for an attacker to spread FUD (Fear, Uncertainty, Doubt) so well that the price of Kairo drops significantly, buy in tons of Kairo, and take over the fund. The same is more difficult to accomplish with Ether: if you cause a lot of people to withdraw everything from the fund, and then deposit a ton of Ether yourself, you would actually reassure investors that it's still safe and well to invest in Betoken, counteracting your attack. - -There is a third option where both Kairo and Betoken Shares are used as votes, which seems more reasonable than using either one individually, since both investors and managers will be represented in administrative decisions. This is the option we're considering to use. - -#### 2.6.2 Implementation - -We intend to use an established framework, such as Aragon, to implement the DAO. - -## 3. Market Analysis - -### 3.1 Competitors - -Betoken faces two types of competition: competition for investors, and competition for managers. We will discuss them below. - -#### 3.1.1 Competition for Investors - -Since Betoken invests solely in cryptocurrencies, our customer base is different from that of traditional hedge funds that invests in stocks and bonds. Specifically, our customer base will mainly consist of open-minded accredited investors and individual cryptocurrency investors. There are two types of competitors for this customer base: - -* Traditional hedge funds that have included cryptocurrencies as a new investment option. -* (Partly-)Decentralized cryptocurrency hedge fund platforms, such as ICONOMI and Melon. ICONOMI and Melon are both platforms where users can build their own traditional-style hedge funds that invest in cryptocurrencies. They do appeal to the same customer base as Betoken, but the fund managers on their platforms each keep their own information and investment strategies, whereas Betoken is able to combine the skills and resources of its managers for the good of the fund. - -To investors, only two metrics have significance: risk and ROI. - -* Betoken is definitely going to be riskier than traditional hedge funds. Compared to other decentralized hedge funds, Betoken's risk is on the same order of magnitude. -* Betoken's ROI mostly depends on the effectiveness of its Incentivized Meritocracy, which we cannot estimate at this point. - -Therefore, the intensity of competition that Betoken will face largely depends on its ROI. - -- If it is significantly better than anything else, then great. None of the competitors mentioned above will be relevant. Copycats may emerge, but network effect and first mover advantage will keep Betoken at the top. -- If it is on the same level as the aforementioned competitors, then Betoken will go head to head with ICONOMI and Melon, both of which will already have been launched for a long time when Betoken launches. Competition will be fierce, but Betoken will hold its place as the only crowdsourced cryptocurrency hedge fund. - -#### 3.1.2 Competition for Managers - -There are several competitors in this area: - -* ICONOMI and Melon are platforms that allow managers to create their own hedge funds with customizable rules. The freedom of customization may appeal to some managers, but it comes with its own downside: you'd have to bootstrap a fund---its investment methods, its customer base, its reputation, etc.---from scratch if you join their platform. On the other hand, new managers in Betoken will be able to immediately start working for a full-fledged fund. It's the difference in difficulty between starting your own company and getting a job at an established company. -* Numerai is a hedge fund that uses an interesting auction system that lets data scientists compete to provide the best algorithms for predicting stock prices. The top rated algorithms will be used to make investment decisions for the hedge fund. [[source](https://numer.ai/whitepaper.pdf)] Numerai's model is inferior to Betoken's almost in every respect, because - * In Betoken, the commission managers get is proportional to the size of the fund's assets, while the same is not necessarily true in Numerai. - * The bets data scientists make in Numerai have binary results: either you lose all of your staked tokens or you lose none. In contrast, decisions in Betoken have much more granular results. This makes Betoken appeal better to risk-averse managers. - * Numerai's model rewards algorithms that fit past data best, rather than algorithms that will perform well in real investment decisions, so there's a gap between the model's optimization goal and the actual goal. Betoken's model, on the other hand, rewards managers who **actually make the best decisions/most profit**. - * There is a steep learning curve for joining Numerai as a manager, while all you have to do to start making decisions for Betoken is getting some Kairo. -* Quantopian and Quantiacs are crowdsourced hedge funds using similar but slightly better models compared to Numerai: - * Users enter their algorithms in trading competitions, and the best algorithms are used for actual investing. - * There's no staking or betting involved; anyone can enter competitions at no cost. - * Algorithms don't have to use machine learning, so managers don't have to be data scientists. - * The algorithms come in the form of trading bots, so they're far more connected to actual trading than Numerai's machine learning algorithms. - * Developers of winning algorithms actually get a cut of all profits generated by their algorithms. - -Since one manager can make decisions for as many hedge funds/platforms they like, competition for managers probably won't be as fierce as that for investors. However, we believe that Betoken will be the prime choice for the vast majority of managers. We list out below the pros and cons of joining Betoken from the perspective of managers. - -##### 3.1.2.1 Pros for Choosing Betoken as a Manager - -* Low barrier of entry. No need to learn a specific language, API, or type of algorithm, or even anything about programming; all you need to do is get some Kairo and start making decisions. -* No bootstrapping effort needed. New managers in Betoken will be able to immediately start working for a full-fledged fund, rather than having to bootstrap a fund by themselves. -* Higher returns. The ROI for making decisions in Betoken is even higher than that of directly investing into the tokens, and the commission you get is proportional to the fund's assets. No middleman taking away a large portion of your profits for no good reason. -* Automation: Betoken will automate the whole buying, selling and reporting process. See part 1.3.4 Reduction of operational costs. - -##### 3.1.2.2 Cons for Choosing Betoken as a Manager - -The parameters used in the fund, such as commission rates, cannot be changed by the will of a single manager, so if a manager wants full freedom in selecting such parameters alternatives like ICONOMI and Melon would be better. - -### 3.2 Demand for Decentralized Cryptocurrency Hedge Funds - -#### 3.2.1 Demand from Investors - -One of Betoken's competitors, ICONOMI, has seen rapid growth in user count and book value. Quoting ICONOMI's [Q4 2017 Financial Report](https://medium.com/iconominet/iconomi-financial-report-q4-2017-17da25349f3d): - -> Our user base increased more than 50% in the last quarter, and **in January we added more than 10,000 new users**. Our book value increased to \$327 million USD, which is 173% more than in Q3. But even more important than book value is the revenue the platform is generating. **DAAs have** **generated over \$200,000** **in revenue in one quarter**, an increase of more than four times over Q3. - -From this evidence, it is clear that the demand for decentralized cryptocurrency hedge funds is real and fast growing. - -If we look at cryptocurrency hedge funds in general, the numbers are even more promising: according to [Morgan Stanley](http://www.businessinsider.com/morgan-stanley-on-financial-institutions-interest-in-bitcoin-2017-12), investors have put over **$2 billion USD** into hedge funds specialized in cryptocurrency investments in 2017, and 2018 will likely be bigger. - -The latest estimate of the number of crypto funds is 226 at the beginning of 2018, with $3.5 - 5 billion in assets under management [[source](https://next.autonomous.com/cryptofundlist/)]. 2018 could be on the same order of magnitude as 2017. And according to the [Eurekahedge Crypto-Currency Hedge Fund Index](http://www.eurekahedge.com/Indices/IndexView/Eurekahedge/682/Eurekahedge_Crypto_Currency_Hedge_Fund_Index), we’ve witnessed a 1,708.49% return for the 9 best crypto funds in 2017. With this kind of performance, we could witness a massive influx of new investors in the next months. - -#### 3.2.2 Demand from Managers - -There is evidence that quants and data scientists are interested in participating in hedge funds. - -- According to Quantopian's [website](https://www.quantopian.com/about), over 700,000 algorithms have been submitted to their platform throughout its lifetime. -- According to a Wired [article](https://www.wired.com/2016/12/7500-faceless-coders-paid-bitcoin-built-hedge-funds-brain/), over 7,500 data scientists joined Numerai's competitions in 2016. -- The market cap for the ICONOMI token, which will be used for creating hedge funds on ICONOMI's platform [[source](https://iconomi.zendesk.com/hc/en-us/articles/115002851065-ICN-token)], is currently over $156 million USD. (Coinmarketcap, Feb 8 2018) - -## 4. Road map - -### Jan 2018 -* MVP -* Landing page -* Testnet Alpha - -### Feb-March 2018 -* UI & UX improvements -* Further smart contract development -* Internal contract audit & testing -* Incentive model analysis & adjustments - -### Q2-Q3 2018 -* Whitepaper 1.0 -* Legal consulting & paperwork -* Expanding Incentivized Meritocracy to other applications -* Testing Incentivized Meritocracy in existing organizations -* Third-party smart contract audits -* Customer research & community outreach - -### Q4 2018 -* Mainnet Pilot -* Official release - -## 5. The team - -#### Zebang (Zefram) Liu - -Zefram is the cofounder and lead developer of Betoken. He currently studies Computer Science at UC San Diego. He is passionate about crypto-economics and mechanism design. - -#### Surya Krishnan - -Surya is the cofounder and frontend developer of Betoken. Currently, he studies computer science at UC San Diego and Surya's goal is to build technology that enables people to realize their ideas. - -#### Guillaume Palayer - -Guillaume is the cofounder of Betoken. His mission is to design and code the front end experience of the dApp. He's also an user researcher passionate by the token economy and the decentralized Web. - -## 6. Acknowledgement - -We thank our friends, namely Surya Krishnan, Angélique Rebardel, and Maxime Ruiz for their feedback on the earlier version of this paper. +# Betoken Whitepaper + +A meritocratic hedge fund built on the Ethereum blockchain. + +## Authors + +Zebang (Zefram) Liu, Guillaume Palayer + +Contact: hello@betoken.fund + +## Introduction + +Betoken is a decentralized hedge fund built on the Ethereum blockchain that invests in ERC20 tokens. Betoken relies on a large pool of managers to make investment decisions, each of whom maintains a portfolio using a portion of the fund. Individual portfolios are compiled into good investment decisions on the fund level using a unique decision making system we call "Incentivized Meritocracy", where control over investment decisions is continuously redistributed to managers who make the most profitable investments. + +The core ideas behind Betoken's Incentivized Meritocracy are: + +* The control over decisions is tokenized. +* The control tokens are valuable. +* Good decisions are rewarded with control tokens proportional to both the quality and the quantity of their benefits. +* Bad decisions receive penalties in control tokens proportional to both how bad of a decision they were and how much damage they caused. + +Betoken is for everyone: anyone can join, anyone can invest, anyone can make decisions for the fund and be rewarded for making good ones. And anyone can rise to the top if they have the merit. + +Betoken is unstoppable: it is a completely decentralized application built on the censorship-resistant Ethereum blockchain. + +Betoken is transparent: all statistics and decisions are publically available, and all fees and clauses are written in immutable open-source smart contracts. + +Betoken will make investing in crypto-assets as simple as deposit-and-profit. Research and due diligence will be done by managers in the investors' stead, all with minimal need for trust between anyone. + +Besides serving as a fund, Betoken will facilitate the collection, consolidation and sharing of data for reporting, risk management and supervisory purposes. + +## 1. The Betoken Model + +### 1.1 Incentivized Meritocracy + +An **Incentivized Meritocracy** is a system where + +* The amount of control each actor has is proportional to their ability to make good decisions. +* Actors are financially incentivized to maximize their control (therefore their decision-making ability). + +The above definition is not rigorous, since "control" and "ability to make good decisions" are not clearly defined, but it provides a general idea of how an Incentivized Meritocracy should behave. To sum it up in one sentence: the best people are in charge, and everyone wants to be in charge. The first point is the desired result, and the second point is the means of achieving it. + +Having the people with the most merit in charge is clearly good for an organization as a whole. In a hedge fund like Betoken, having the people who are the best at making investments handle the fund's investments means that the ROI (Return On Investment) of the fund is going to be of a high standard. + +Incentivized Meritocracies have never been successfully implemented before, since it is near impossible to have a centralized actor that can judge everyone impartially. However, newly-invented smart-contract-enabled blockchains such as Ethereum allow us to construct **decentralized** actors that can uphold unbreakable rules, making implementing an actual Incentivized Meritocracy possible. Betoken is the first decentralized application that incorporates an implementation of Incentivized Meritocracy. + +--- + +**Important Note:** The rest of Section 1 will be a high level description of Betoken's implementation of Incentivized Meritocracy. It will only be within the context of the Betoken hedge fund, rather than a generalized Incentivized Meritocracy. + +However, a formal and generalized description of Incentivized Meritocracies, as well as proof that Incentivized Meritocracies are indeed able to optimize the system's value, has been written. It can be found here: https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf + +--- + +### 1.2 Betoken's Solution + +There are four central ideas behind Betoken's solution to Incentivized Meritocracy: + +1. Control is denoted using Kairo (KRO) — Betoken's custom ERC20 token — that must be staked when making investments for the fund, and the amount of the stake is proportional to the amount of investment. +2. The control token KRO is valuable, in that holders of the token can expect income proportional to the amount of KRO they hold. +3. Good investment decisions are rewarded with KRO proportional to both the quality (ROI) and the quantity (profit / prevented loss) of the investment decision. +4. Bad investment decisions receive penalties in KRO proportional to both how far below 0 the ROIs were and how much money they lost. + +We provide below a description of how Betoken functions and details of Betoken's Incentivized Meritocracy. + +--- + +The Betoken fund runs in investment cycles, and at the start of each cycle there is a period of time where investors can deposit & withdraw their funds: the Intermission phase. When a user deposits $X$ Ether, they are given some amount of *Betoken Shares*, a custom ERC20 token, the amount of which is determined by the following equation: + +$$ +shares = \frac{X}{totalFunds} \times totalShareSupply +$$ +When they withdraw $X$ Ether, they have to burn some of their shares, the amount of which is determined by the same equation. During the first cycle, when there's no money in the fund, we simply use: +$$ +shares = constant \times X +$$ +After the Intermission phase, managers can start making investment decisions for the fund by staking some Kairos — the name we use for control tokens. Decisions are immediately turned into actual investments using the equation + +$$ +investmentAmount = totalFunds \times \frac{decisionStake}{totalKairoSupply} +$$ +During the Manage phase, managers can also sell any asset they invested in whenever they want at the current market price. After an asset has been sold, the fund's smart contract automatically determines how profitable the investment was and rewards/takes away Kairo based on the results. The amount of Kairos a user gets back after selling an asset is $stake \times (1 + ROI)$, so if one of your investments had a 20% ROI, you would get 20% more Kairos back. + +All investments should be sold before the end of the decision-making phase, or one's staked Kairos would be lost. + +After the Manage phase is over, a certain proportion (20%) of total profits is set aside as commission and distributed among Kairo holders proportional to the amount they hold. A certain proportion of fund assets (0.1%) is also set aside and distributed among Kairo holders. + +### 1.3 Additional Reasons of Why Betoken Will be Successful + +While we do have a [formal proof](https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf) that Betoken's Incentivized Meritocracy will optimize the fund's profits, we feel it best to provide some additional reasons of why Betoken will be successful that are more intuitive and more closely related to reality. They will be laid out below. + +#### 1.3.1 Better Than Direct Investment + +To be able to attract people with flair in investing, we must make participating in Betoken's investment process more lucrative than directly investing in the tokens oneself. There are three main reasons why being a Betoken manager is more profitable: + +1. **Leverage:** Being part of a large fund means you can manage, and profit from, more money than you otherwise would've been able/willing to invest yourself. It's similar to having a leverage. +2. **Less risk:** Since managers are paid commissions even if the fund did not profit, they are subject to less risk and can ensure a minimum income. +3. **No custody cost:** Betoken handles the safekeeping of the assets, so managers don't have to spend time and money on asset custody. +#### 1.3.2 Analogous to Markets + +Betoken's Incentivized Meritocracy shares many similarities to markets of investable assets, such as the stock market and the cryptocurrency market. In fact, staking in an investment decision is almost exactly the same as directly investing the token, except that the ROI is better. Therefore, we can estimate Betoken's success as a meritocracy by looking at how meritocratic the stock market and other markets currently are. + +To our knowledge, there is no evidence that they are not meritocratic: no one's heard of a dumb and inexperienced investor besting market growth, and smart people (like those at Renaissance Technologies) have achieved amazing ROIs (71.8% annual on average! [[source](https://en.wikipedia.org/wiki/Renaissance_Technologies)]). Thus, we can expect that Betoken will also be meritocratic. + +#### 1.3.3 Friendly to Beginner Managers +Since the launch of our Testnet Alpha, some people have told us that they haven't had time before to do their due diligence researching and accumulating knowledge about the best crypto-assets, but want to get better at it. Betoken offers beginner managers a safe environment to grow, since they can first observe how veteran managers make investments and let the community handle the fund's money, before dipping their toes into making decisions for an already full-fledged hedge fund. + +Compared to ICONOMI and Melon, where you have to bootstrap a new hedge fund completely on your own, Betoken is much more beginner-friendly. It's the difference between getting a job at a well-established company and starting your own company. This trait facilitates the inflow of new managers into the Incentivized Meritocracy, which is essential to keeping Betoken's model effective in making decisions. + +#### 1.3.4 Cost-effective +One major painful oversight for crypto fund managers and individual investors is operations. We aim to be part of a new wave of tools to service funds and individual investors by **automating the whole buying, selling and reporting process**. Facilitating the collection, consolidation and sharing of data for tax and legal purposes is also one of the potential key benefits of Betoken. + +### 1.4 Potential challenges + +#### 1.4.1 The Existing Regulatory Framework + +Existing regulations do not provide an appropriate framework to existing and future blockchain projects and should not be applied to those projects as-is. + +The regulatory wait-and-see policies represent a significant obstacle. Simple things such as the choice of company’s location or the fact that at any time, a directive or a legal decision can make your activity illegal. + +Betoken aims to evolve quickly if the framework and rules are updated by the regulators. The use of blockchain technology in the markets induces a change of paradigm. Since the development of blockchain-based “disintermediation” exchanges, the current regulatory regime appears to be ill-suited to facilitating growth and innovation in the Fintech community. + +More details about the constraints of applying a blockchain technology to finance can be found here: [https://www.esma.europa.eu/sites/default/files/library/dlt_report_-_esma50-1121423017-285.pdf](https://www.esma.europa.eu/sites/default/files/library/dlt_report_-_esma50-1121423017-285.pdf). + +#### 1.4.2 Approval, Licensing and Operating Requirements + +Betoken could need to get an approval and licensing from a national regulator, according to specific requirements in terms of operating rules, organizational structure, and human and material resources. +Once authorized, Betoken could be subject to a certain number of organizational rules, market surveillance and conduct requirements, in order to ensure that the markets are fair, transparent and efficient places, and to provide customer protection. + +#### 1.4.3 KYC and AML Compliance + +On the question of fraudulent activities and AML (Anti-Money Laundering), a robust governance would ensure that only trustworthy participants are accepted. In addition, the Ethereum network would allow for more transparency on transaction history and beneficial owners, which would enhance KYC (Know Your Customer) and help trace and prevent fraud. + +#### 1.4.4 Tax Burden + +Some challenges could also arise from the transnational nature of the blockchain. For example, a tax may apply on a given transaction depending on its place of execution. The law applicable to blockchain networks should be specified in advance to avoid conflicts. + +#### 1.4.5 Operational risks + +A mistake in the coding of smart contracts or reference data might affect a great number of participants. What would happen if the external data are flawed or become unavailable? + +#### 1.4.6 Interoperability + +Supporting cross-chain crypto-asset investment will be a major opportunity for Betoken. Solutions are emerging to handle this issue in the near future (Polkadot, Cosmos, Kyber Network). + +## 2. Implementation Details + +### 2.1 Kairo's Distribution + +#### 2.1.1 Initial Distribution + +We plan to use what we call **Initial Account Offering (IAO)** to handle Kairo's initial distribution. + +Betoken's IAO has the following properties: + +* Instead of releasing Kairo as a normal ERC20 token that can be freely traded, we will make Kairo a **non-transferrable** token that still uses the ERC20 standard. This way, Kairo will be more like experience points in a game and less like a speculative security, *which will ensure that only actual users of Betoken will have Kairo.* +* Instead of letting buyers purchase any amount of tokens they want, we will use a scheme that's more similar to getting a Netflix account: each person can purchase a Betoken manager account that's loaded with Kairos, and the amount of Kairo they initially have depends on how much they paid. There will be three price tiers: \$10, \$50, and \$100. Unlike a Netflix subscription, you only have to pay once in your account's lifetime. *This setup decreases whales' incentive to manipulate Kairo, and ensures that most managers will start on a level playing field.* +* A referral program will be available, where anyone who refers others and anyone who is referred by someone else will get some bonus Kairo (ex. 5% of the new account's price). *This will help Betoken to acquire the critical amount of managers needed to display it's effectiveness.* + +#### 2.1.2 Continuous Distribution + +After the IAO, new manager accounts will still be created in the same fashion. However, the price will become dynamic, determined by the following formula: +$$ +kairoPrice = max(\frac{totalFunds}{totalKairoSupply}, 2.5) +$$ +where the unit is $DAI/KRO$. The maximum amount of Kairo a new manager can have will also become dynamic, determined by the following formula: +$$ +maxKairoPurchase = totalKairoSupply \times 1\% +$$ +The funds paid by new managers will be distributed in the following way: + +* During the Intermission phase, the funds will be sent to the development team's account as project funding. +* During the Manage phase, the funds will be distributed among the investors on a pro rata basis. + +The reason for not giving the proceeds in the Intermission phase to the investors as well is to prevent the following type of attack. An attacker could deposit a large amount into the Betoken fund at the beginning of the Intermission phase, withdraw it near the end of the Intermission phase, and steal a large portion of the proceeds from new managers. The stolen amount can be calculated using the following formula (assuming only the attacker is depositing): +$$ +stolenAmount = \frac{attackerDeposit}{totalFunds + attackerDeposit}\times newManagerProceeds +$$ +Compared to giving the proceeds to some attacker, we've decided it's better to give it to the development team as additional funding. + +### 2.2 Cycle Phases + +Each cycle is divided into 2 phases: + +* Intermission + * Deposit & Withdraw: Investors can deposit and withdraw their funds. + * Redeem Commission: Kairo holders can redeem their commission. +* Manage: When managers stake Kairo to make investments for the fund. + +The lengths of each phase are as follows: + +* Intermission: 3 days +* Manage: 27 days + +Totaling 30 days. + +For the functions that transitions the fund to the next phase, the successful caller can get a reward in Kairo. + +### 2.3 Token Exchange + +Betoken uses Kyber Network as the token exchange platform for executing all of its investments. + +Kyber Network is "a decentralized liquidity network that anyone can tap into for a wide variety of inter-token use cases."[[source](https://kyber.network/about/company)] The inclusion of Kyber Network can minimize the number of moving parts in Betoken's operation and significantly reduce Betoken's attack surface, reducing Betoken's running and maintenance costs and increasing its security. + +Betoken uses [Compound Finance](https://compound.finance/) and [Fulcrum](https://fulcrum.trade/) as the margin trading platforms for executing leveraged long & short trades. + +### 2.4 Governance + +In order to provide a simple user experience while maintaining a high decentralization level for the project, Betoken uses a unique governance system called **opt-out governance** to handle its smart contract upgrades. + +For each upgrade, there will be roughly four stages: + +1. Decide whether or not an upgrade is needed +2. Decide which upgrade to accept +3. Investors withdraw funds if they don't like the upgrade +4. Migrate to upgraded contract + +There are three possible ways an upgrade may occur: + +1. **Developer-initiated upgrade**: The developer of Betoken, who is specified by the existing smart contract, may unilaterally decide to initiate an upgrade. + + During the Intermission phase of each cycle, the developer may decide to initiate an upgrade, and provide the new smart contract's address at the same time. The managers may review the new contract during the cycle's Manage phase, after which investors may withdraw their funds if they don't approve of the upgrade. Given that the managers do not object, Betoken will migrate to the new smart contract after the next cycle's Intermission phase has ended. + +2. **Manager-initiated upgrade**: The manager community may collectively decide to initiate an upgrade, without the need for the developer's approval. + + (Note: the quorum for all votes mentioned below is 10%) + + During the Intermission phase of each cycle, the manager community may decide to initiate an upgrade via a simple majority vote using their Kairo. If the vote passed, then during the Manage phase managers may use their Kairo to vote on which smart contract should be accepted as the new version. + + When voting for the upgrade target, the 27-day Manage phase is divided into nine 3-day chunks. The first chunk is reserved for letting the news of the upgrade spread sufficiently. In the second chunk, on the first day, the manager with the most Kairo (among managers who want to propose upgrades) proposes the candidate smart contract to vote on. During the remaining two days, managers other than the candidate's proposer may use Kairo to vote on whether or not to accept this candidate as the upgrade target. + + * If a super-majority (>75%) voted yes, then the candidate is accepted as the upgrade target. No further voting is needed. + * If <=75% voted yes or the quorum was not reached, then we repeat the same process in the next chunk, where the manager with the most Kairo, excluding previous proposers, gets to propose the candidate. + * Proposers may not participate in the current and future votes. + + * If no vote has passed after 5 votes (15 days), the upgrade is aborted. The last 3 chunks (9 days) are reserved for reviewing the upgrade target's code in the case where the 5th vote was successful. + + After the unhappy investors withdraw their funds, Betoken will migrate to the new contract. + +3. **Managers override developer's upgrade**: After the developer initiates an upgrade, if the manager community decides that the upgrade is bad/malicious, they may override the developer's decision by proceeding with the manager-initiated upgrade process during the Manage phase. If the managers decided on an upgrade target after the Manage phase, then that target will be used. If not, then the developer's upgrade will continue normally. + +There are several advantages of using the opt-out governance system: + +1. Given that the developer behaves honestly, this system would have minimal disturbance on Betoken's normal operations. This ensures that Betoken's user experience, for both managers and investors, will be unaffected by smart contract upgrades, which is crucial for any consumer-facing product. + + If the developer behaves dishonestly/maliciously, the community would be able to override the developer's decisions, and the investors can simply withdraw their funds if even that fails, so the security of the system and of the funds would still be maximally guaranteed. + +2. While the developer is important to the governance system, they are not required for updates to occur. This means Betoken does not need any centralized authority to function, which ensures Betoken's robustness against attacks on the developer. + +### 2.5 Risk Threshold + +While Betoken's Incentivized Meritocracy can already deal with managers who don't make any investments but still redeem their commissions every month (AKA freeloaders), it does so too slowly to disincentivize managers from freeloading. Thus, we have introduced a mechanism we call Risk Threshold to better handle freeloaders. + +The Risk Threshold mechanism measures the amount of risk each manager has taken in a cycle, and only gives them the full commission amount if the risk they've taken exceeds a certain threshold. We measure the risk a manager has taken using the formula: +$$ +Risk = \sum_{i\in Investments} Duration(i) \times Stake(i) +$$ +And the threshold we have chosen for each manager is: +$$ +Threshold = KairoBalanceAtCycleStart \times (3 \text{ days}) +$$ +The proportion of the full commission that each manager will receive is: +$$ +min(1, \frac{Risk}{Threshold}) +$$ +To illustrate this mechanism in an example, say at the beginning of a cycle Alice has 100 Kairo and Bob has 10 Kairo. Alice stakes 50 Kairo in an investment for 7 days, Bob stakes 1 Kairo in an investment for 15 days and 2 Kairo in another investment for 5 days. The risk Alice has taken is $50\times7=350$, and her risk threshold is $100 \times 3 = 300$, so she will receive the full commission amount. The risk Bob has taken is $1 \times 15 + 2 \times 5 = 25$, and his risk threshold is $10 \times 3 = 30$, so he has not exceeded the risk threshold, and will receive $\frac{25}{30} = 83.33\%$ of the full commission amount. + +The commission penalty each manager receives is put into the commission pool of the next cycle. + +### 2.6 Purging "Dead" Managers + +As the bottom line for manager is participation rate, managers who have been inactive for 2 cycles or above will lose their entire Kairo balance. Inactivity is defined as not making any investments or margin trades. + +This measure is meant to solve two problems: + +1. If a manager joined Betoken with a relatively low initial Kairo balance, it's likely that they will lose interest and abandon their account, since they didn't put in much money to begin with. However, the stale Kairo owned by their account still represents control over some portion of the fund assets. This means that as the number of inactive managers rises, a nonnegligible portion of the investors' capital will simply sit in the fund, not being invested in anything, which would negatively impact the efficiency of Betoken. +2. If a prominent manager with a large amount of Kairo unfortunately passes away, and they made no arrangements to pass on their manager account to someone else, the capital under their management will never be invested in anything, which may greatly reduce the efficiency of Betoken. + +### 2.7 Inflation Funding for Development + +In order to providing funding for its maintenance and future development, Betoken will mint Betoken Shares and send them to the current development team. The amount will be equal to 0.1% of the current Betoken Shares total supply, and it will occur at the end of every cycle. + +## 3. Market Analysis + +### 3.1 Competitors + +Betoken faces two types of competition: competition for investors, and competition for managers. We will discuss them below. + +#### 3.1.1 Competition for Investors + +Since Betoken invests solely in cryptocurrencies, our customer base is different from that of traditional hedge funds that invests in stocks and bonds. Specifically, our customer base will mainly consist of open-minded accredited investors and individual cryptocurrency investors. There are two types of competitors for this customer base: + +* Traditional hedge funds that have included cryptocurrencies as a new investment option. +* (Partly-)Decentralized cryptocurrency hedge fund platforms, such as ICONOMI and Melon. ICONOMI and Melon are both platforms where users can build their own traditional-style hedge funds that invest in cryptocurrencies. They do appeal to the same customer base as Betoken, but the fund managers on their platforms each keep their own information and investment strategies, whereas Betoken is able to combine the skills and resources of its managers for the good of the fund. + +To investors, only two metrics have significance: risk and ROI. + +* Betoken is definitely going to be riskier than traditional hedge funds. Compared to other decentralized hedge funds, Betoken's risk is on the same order of magnitude. +* Betoken's ROI mostly depends on the effectiveness of its Incentivized Meritocracy, which we cannot estimate at this point. + +Therefore, the intensity of competition that Betoken will face largely depends on its ROI. + +- If it is significantly better than anything else, then great. None of the competitors mentioned above will be relevant. Copycats may emerge, but network effect and first mover advantage will keep Betoken at the top. +- If it is on the same level as the aforementioned competitors, then Betoken will go head to head with ICONOMI and Melon, both of which will already have been launched for a long time when Betoken launches. Competition will be fierce, but Betoken will hold its place as the only crowdsourced cryptocurrency hedge fund. + +#### 3.1.2 Competition for Managers + +There are several competitors in this area: + +* ICONOMI and Melon are platforms that allow managers to create their own hedge funds with customizable rules. The freedom of customization may appeal to some managers, but it comes with its own downside: you'd have to bootstrap a fund---its investment methods, its customer base, its reputation, etc.---from scratch if you join their platform. On the other hand, new managers in Betoken will be able to immediately start working for a full-fledged fund. It's the difference in difficulty between starting your own company and getting a job at an established company. +* Numerai is a hedge fund that uses an interesting auction system that lets data scientists compete to provide the best algorithms for predicting stock prices. The top rated algorithms will be used to make investment decisions for the hedge fund. [[source](https://numer.ai/whitepaper.pdf)] Numerai's model is inferior to Betoken's almost in every respect, because + * In Betoken, the commission managers get is proportional to the size of the fund's assets, while the same is not necessarily true in Numerai. + * The bets data scientists make in Numerai have binary results: either you lose all of your staked tokens or you lose none. In contrast, decisions in Betoken have much more granular results. This makes Betoken appeal better to risk-averse managers. + * Numerai's model rewards algorithms that fit past data best, rather than algorithms that will perform well in real investment decisions, so there's a gap between the model's optimization goal and the actual goal. Betoken's model, on the other hand, rewards managers who **actually make the best decisions/most profit**. + * There is a steep learning curve for joining Numerai as a manager, while all you have to do to start making decisions for Betoken is getting some Kairo. +* Quantopian and Quantiacs are crowdsourced hedge funds using similar but slightly better models compared to Numerai: + * Users enter their algorithms in trading competitions, and the best algorithms are used for actual investing. + * There's no staking or betting involved; anyone can enter competitions at no cost. + * Algorithms don't have to use machine learning, so managers don't have to be data scientists. + * The algorithms come in the form of trading bots, so they're far more connected to actual trading than Numerai's machine learning algorithms. + * Developers of winning algorithms actually get a cut of all profits generated by their algorithms. + +Since one manager can make decisions for as many hedge funds/platforms they like, competition for managers probably won't be as fierce as that for investors. However, we believe that Betoken will be the prime choice for the vast majority of managers. We list out below the pros and cons of joining Betoken from the perspective of managers. + +##### 3.1.2.1 Pros for Choosing Betoken as a Manager + +* Low barrier of entry. No need to learn a specific language, API, or type of algorithm, or even anything about programming; all you need to do is get some Kairo and start making decisions. +* No bootstrapping effort needed. New managers in Betoken will be able to immediately start working for a full-fledged fund, rather than having to bootstrap a fund by themselves. +* Higher returns. The ROI for making decisions in Betoken is even higher than that of directly investing into the tokens, and the commission you get is proportional to the fund's assets. No middleman taking away a large portion of your profits for no good reason. +* Automation: Betoken will automate the whole buying, selling and reporting process. See part 1.3.4 Reduction of operational costs. + +##### 3.1.2.2 Cons for Choosing Betoken as a Manager + +The parameters used in the fund, such as commission rates, cannot be changed by the will of a single manager, so if a manager wants full freedom in selecting such parameters alternatives like ICONOMI and Melon would be better. + +### 3.2 Demand for Decentralized Cryptocurrency Hedge Funds + +#### 3.2.1 Demand from Investors + +One of Betoken's competitors, ICONOMI, has seen rapid growth in user count and book value. Quoting ICONOMI's [Q4 2017 Financial Report](https://medium.com/iconominet/iconomi-financial-report-q4-2017-17da25349f3d): + +> Our user base increased more than 50% in the last quarter, and **in January we added more than 10,000 new users**. Our book value increased to \$327 million USD, which is 173% more than in Q3. But even more important than book value is the revenue the platform is generating. **DAAs have** **generated over \$200,000** **in revenue in one quarter**, an increase of more than four times over Q3. + +From this evidence, it is clear that the demand for decentralized cryptocurrency hedge funds is real and fast growing. + +If we look at cryptocurrency hedge funds in general, the numbers are even more promising: according to [Morgan Stanley](http://www.businessinsider.com/morgan-stanley-on-financial-institutions-interest-in-bitcoin-2017-12), investors have put over **$2 billion USD** into hedge funds specialized in cryptocurrency investments in 2017, and 2018 will likely be bigger. + +The latest estimate of the number of crypto funds is 226 at the beginning of 2018, with $3.5 - 5 billion in assets under management [[source](https://next.autonomous.com/cryptofundlist/)]. 2018 could be on the same order of magnitude as 2017. And according to the [Eurekahedge Crypto-Currency Hedge Fund Index](http://www.eurekahedge.com/Indices/IndexView/Eurekahedge/682/Eurekahedge_Crypto_Currency_Hedge_Fund_Index), we’ve witnessed a 1,708.49% return for the 9 best crypto funds in 2017. With this kind of performance, we could witness a massive influx of new investors in the next months. + +#### 3.2.2 Demand from Managers + +There is evidence that quants and data scientists are interested in participating in hedge funds. + +- According to Quantopian's [website](https://www.quantopian.com/about), over 700,000 algorithms have been submitted to their platform throughout its lifetime. +- According to a Wired [article](https://www.wired.com/2016/12/7500-faceless-coders-paid-bitcoin-built-hedge-funds-brain/), over 7,500 data scientists joined Numerai's competitions in 2016. +- The market cap for the ICONOMI token, which will be used for creating hedge funds on ICONOMI's platform [[source](https://iconomi.zendesk.com/hc/en-us/articles/115002851065-ICN-token)], is currently over $156 million USD. (Coinmarketcap, Feb 8 2018) + +## 4. Road map + +### Jan 2018 +* MVP +* Landing page +* Testnet Alpha + +### Feb - Jun 2018 + + - UI and UX improvements + - Further smart contract development + - Internal contract audit and testing + - Incentive model analysis and adjustments + +### Jul - Aug 2018 + +- Legal consulting +- Community outreach +- Frontend development +- Testnet Beta + +### Sep - Dec 2018 + +- Token sale +- Smart contract audits +- Mainnet Pilot + +### Q1 2019 + +- Official release + +### Q2 2019 + +- Tax & legal tools +- Python API to support Machine Learning agents + +### Q3 2019 + +- Pro UI with more features and customizability +- More API support + +## 5. The team + +#### Zebang (Zefram) Liu + +Zefram is the cofounder and lead developer of Betoken. He currently studies Computer Science at UC San Diego. He is passionate about crypto-economics and mechanism design. + +#### Guillaume Palayer + +Guillaume is the cofounder of Betoken. His mission is to design and code the front end experience of the dApp. He's also an user researcher passionate by the token economy and the decentralized Web. + +## 6. Acknowledgement + +We thank our friends, namely Surya Krishnan, Angélique Rebardel, and Maxime Ruiz for their feedback on the earlier version of this paper. diff --git a/BetokenWhitepaper.pdf b/BetokenWhitepaper.pdf index 942b32b..61ed2ce 100644 Binary files a/BetokenWhitepaper.pdf and b/BetokenWhitepaper.pdf differ diff --git "a/jp/Betoken\343\203\233\343\203\257\343\202\244\343\203\210\343\203\232\343\203\274\343\203\221\343\203\274.md" "b/jp/Betoken\343\203\233\343\203\257\343\202\244\343\203\210\343\203\232\343\203\274\343\203\221\343\203\274.md" new file mode 100644 index 0000000..76b6cf2 --- /dev/null +++ "b/jp/Betoken\343\203\233\343\203\257\343\202\244\343\203\210\343\203\232\343\203\274\343\203\221\343\203\274.md" @@ -0,0 +1,417 @@ +# Betokenホワイトペーパー +Ethereumブロックチェーン上に構築された能力主義的ヘッジファンド。 + +## 著者 +Zebang (Zefram) Liu, Guillaume Palayer + +日本語訳： [Crypto Chick（通称:ひよこ）](https://twitter.com/CCassets) + +連絡先：hello@betoken.fund + +## 前書き +Betokenは、ERC20トークンに投資するEthereumブロックチェーン上に構築された分散型ヘッジファンドです。 +Betokenは投資判断を下すために多数のマネージャーを頼りにしており、それぞれのメンバーはファンドの一部を使ってポートフォリオを維持しています。 +個々のポートフォリオは、最も収益性の高い投資を行うマネージャーに継続的に再配分される「インセンティブメリットクラシー（Incentivized Meritocracy）」と呼ばれるユニークな意思決定システムを使用して、 +投資配分をコントロールしファンドレベルで良好な投資決定を行います。 + +Betokenの要点となる「Incentivized Meritocracy」のアイデアは次のとおりです。 + +* 投資決定に対するコントロールはトークン化される。 +* コントロールトークン（KRO Token）は貴重です。 +* 優れた意思決定は、その利益の質と量の両方に比例したコントロールトークンで報いられます。 +* 悪い決断は、それがどれほどのダメージをファンドに与えたかに比例して、コントロールトークンにペナルティを受けます。 + +　Betoken is for everyone：誰もが参加することができ、誰でも投資することができ、誰でもファンドの決定を下し、良い成績から報酬を得ることができます。 +そして、誰もがトップに上がることができます。 + +　Betoken is unstoppable：Betokenは止まらず、検閲に抵抗するEthereumブロックチェーン上に構築された、完全に分散されたアプリケーションです。 + +　Betoken is transparent：Betokenは透過的です。すべての統計と意思決定は一般に公開されており、すべての手数料と条項は不変のオープンソースのスマート契約で書かれています。 + +Betokenは、預金と利益のように単純な暗号資産への投資を行います。リサーチとデューデリジェンスは、投資家の代わりにファンドマネージャーによって行われ、誰でも最小限の信頼しか必要としません。 + +また、ファンドとして機能する以外にも、リスク管理や監督目的のデータの収集、整備、共有を容易にします。 + +## 1. Betokenモデル + +### 1.1「 Incentivized Meritocracy 」 +能力主義によるインセンティブシステムです。 + +* 各ファンドマネージャーの資金コントロール量は、良い意思決定を行う能力に比例します。 +* ファンドマネージャーは、意思決定能力を最大限にするために、財政的なインセンティブがあります。 + +しかし上記の定義は厳密ではない。なぜなら「統制」と「良い決定を下す能力」は明確に定義されていないからである。 +それはIncentivized Meritocracyがどのように行動すべきかという一般的な考えを提供する。 +一言でまとめると、最高の人になり誰もが担当したいと考えています。第1は所望の結果であり、第2はそれを達成する手段である。 + +最も有能な人を持つことは、組織全体にとって明らかに良いことです。Betokenのようなヘッジファンドでは、投資を行う上で最善の人がファンドの投資を処理するということは、ファンドのROI（投資収益率）が高い水準になることを意味します。 + +Incentivized Meritocraciesのような仕組みは、公平に判断できる中央管理者を持つことがほとんど不可能であるため、これまでに成功したことはありません。 +しかし、新しく発明されたスマート・コントラクト対応のEthereumのようなブロックチェーンは、破綻しないルールを維持することができる分散型アクターを構築し、実際のIncentivized Meritocracyを実現することを可能にします。 +Betokenは、Incentivized Meritocracyの実装を組み込んだ最初の分散アプリケーションです。 + +--- + +**重要な注記：**第1節の残りの部分は、BetokenのIncentivized Meritocracyの実装についてのハイレベルな記述である。 +それは、一般化されたIncentivized MeritocracyよりむしろBetokenヘッジファンドの中にのみあるでしょう。 + +Incentivized Meritocraciesの正式で一般的な記述、そしてIncentivized Meritocraciesが実際にシステムの価値を最適化できるという証拠が書かれています。 +それはここに見つけることができます：https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf + +--- + +### 1.2 Betokenの解決策 +Incentivized Meritocracyに対するBetokenのソリューションには、4つの中心的なアイデアがあります。 + +1. コントロールは、Kairo(KRO)- BetokenのカスタムERC20トークンを使用して表示されます。 +このトークンは、ファンドに投資する際には掛け金をかける必要があり、その金額は投資額に比例します。 +2. コントロールトークンKROは、トークンホルダーのKROの量に比例した収入を期待できる点で価値があります。 +3. 優れた投資決定は、投資判断の質（ROI）と量（利益/予防損失）の両方に比例してKROで報酬を与えられます。 +4. 悪い投資決定は、ROIがどれくらい下にあるか、そしてどれだけの金額を失ったかに比例して、KROの罰則を受けます。 + +Betokenの機能とBetokenのIncentivized Meritocracyの詳細について、以下で説明します。 + +--- + +Betokenファンドは投資サイクルで運用され、各サイクルの開始時に投資家が資金を預け入れすることができる期間があります。 +ユーザーがEtherをデポジットすると、いくつかのBetoken Shares（カスタムERC20トークン）が与えられます。 +このトークンの量は、次の式で決まります。 + +* $shares = \frac{X}{totalFunds} \times totalShareSupply$ + + Etherを撤収するとき、sharesのいくつかを燃やさなければならない。 +その量は同じ方程式によって決まる。最初のサイクルで、ファンドに資金がないときは以下を使用します。 + +* $shares = constant \times X$ + +入金・払い戻しの後、ファンドマネージャーはコントロール・トークンに使用するKairosを賭けて、ファンドの投資決定を開始することができます。 +決定は下記の式を使用してすぐに実際の投資に変わります + +* $investmentAmount = totalFunds \times \frac{decisionStake}{totalKairoSupply}$ + +意思決定段階では、ファンドマネージャーは投資した資産を現在の市場価格でいつでも売ることができます。 +資産が売却された後、ファンドのスマート・コントラクトは投資の利益を決定し、結果に基づいてKROで報酬を出すか、罰則として徴収する。 +ユーザーが資産を売却した後に戻ってくるKairosの金額は$ stake \times（1 + ROI）$です。したがって、ROIが20％の投資があれば、Kairosを20％上回ります。 + + +すべての投資は、意思決定フェーズの終了前に売却されるべきです。そうでなければ、Kairosは失われます。 + +意思決定フェーズが終わったら、総利益の一定割合（20％）をコミッションとして控え、Kairoホルダーにその量に比例して分配する。 +特定の割合のファンド資産（0.1％）も脇に置かれ、Kairoホルダーに分配され、Betokenの開発者には、将来の支援資金として0.1％が支払われます。 +さらに、資金を引き出すたびに出口手数料（3％）が請求されます。 + +### 1.3 Betokenが成功するその他の理由 +BetokenのIncentivized Meritocracyがファンドの利益を最適化するという[正式な証拠](https://github.com/Betoken/documents/blob/master/Incentivized%20Meritocracies/Incentivized%20Meritocracies.pdf)がありますが、 +Betokenがより直感的でより密接に関係する理由についていくつか考察することをお勧めします。 +それらは下記の通りです。 + +#### 1.3.1　直接投資よりも良い +投資意欲を持つ人々を引き付けるためには、Betokenの投資プロセスに直接参加することが必要です。 +Betokenのマネージャーがより多くの利益を上げる主な理由は3つあります。 + +1. **レバレッジ：**大規模なファンドの一部であるということは、あなた自身が投資するものよりも多くのお金を管理し、利益を上げることを意味します。 +それは、レバレッジを持つことに似ています。 +2. **リスクの軽減：**ファンドが利益を得なくても報酬が支払われるため、リスクが少なく、最低所得を保証することができます。 +3. **カストディコストなし：**Betokenは資産の保管を処理するので、資産管理に時間と費用を費やす必要はありません。 + +#### 1.3.2　市場の類似性 +BetokenのIncentivized Meritocracyは、株式市場や暗号通貨市場など、投資可能資産の市場と多くの類似点を共有しています。 +実際、ROIが優れているという点を除いて、投資決定はトークンの直接投資とほぼ同じです。 +したがって、株式市場やその他の市場がどのようにメリットがあるかを見て、Betokenの成功を資質主義として見積もることができます。 + +我々が知っているように、市場は能力主義的である：市場の成長を熟知していて愚かで経験の浅い投資家は誰も聞いたことがなく、賢明な人たちは素晴らしいROIを達成している。 +このようにBetokenも能力主義的になると期待できます。 + +#### 1.3.3　初心者に優しい +Testnet Alphaの発売以来、ファンドマネージャーは最善の暗号資産についての調査と分析を行い、より良いものにしたいと思っています。 +Betokenは初心のファンドマネージャーに成長するための安全な環境を提供しています。 +彼らは本格的なヘッジファンドへの投資を行うまでに、ベテランのマネージャーがどのように投資を行い、コミュニティが資金をどのように処理するのかを最初に観察できます。 + +ICONOMIやMelonと比較して、新しいヘッジファンドをあなた自身で完全にブートストラップする必要がある場合、Betokenははるかに初心者フレンドリーです。 +それは、確立された会社に就職するのと自分の会社を設立することとの違いです。 +この特徴は、新たなファンドマネージャーのIncentivized Meritocracyへの流入を促進します。これはBetokenモデルの意思決定を有効に保つために不可欠です。 + +#### 1.3.4　高い費用対効果 +暗号ファンドマネージャーと個人投資家との一つの違いは資金の操作性です。 +Betokenは、購入、売却、報告プロセス全体を自動化することにより、個人投資家とその資金に新しいサービスツールを提供することを目指しています。 +税金や法律上の目的で、データの収集、統合、共有を促進することもBetokenの潜在的な主な利点の1つです。 + +### 1.4　潜在的な課題 + +#### 1.4.1　既存の規制枠組み +既存の規制は、現在及び将来のブロックチェーンプロジェクトに適切な枠組みを提供するものではなく、それらのプロジェクトにそのまま適用すべきではありません。 + +規制動向への注目は大きな障害となっています。 +会社の場所の選択や、指示や法的な決定があなたの活動を違法にする可能性があるという事柄です。 + +Betokenは、規制当局によってフレームワークとルールが更新されれば、迅速に進化することを目指しています。 +市場におけるブロックチェーン技術の使用は、パラダイムの変化を引き起こします。 +ブロックチェーンをベースとした「仲介者の不在」取引の発展以来、現行の規制制度はFintechコミュニティの成長とイノベーションを促進するのに適していないようです。 + +ブロックチェーンテクノロジーを金融に適用する際の制約については、[https://www.esma.europa.eu/sites/default/files/library/dlt_report_-_esma50-1121423017-285.pdf](https://www.esma.europa.eu/sites/default/files/library/dlt_report_-_esma50-1121423017-285.pdf)を参照してください。 + +#### 1.4.2　承認、ライセンス、および動作要件 +Betokenは、運営規則、組織構造、人的および物的資源に関する特定の要件に従って、国家規制機関からの承認とライセンス供与を受ける必要があります。 +承認されたBetokenは、市場が公正で透明かつ効率的な場所であることを保証し、顧客保護を提供するために、一定の組織規則、市場監視および行動要件の対象となる可能性があります。 + +#### 1.4.3 KYCおよびAML準拠 +詐欺的な活動やAML（マネーロンダリング防止）の問題については、信頼できる参加者だけが受け入れられることを確実なガバナンスで保証します。 +さらにEthereumネットワークは、取引履歴と有益な所有者の透明性を高め、KYC（顧客を知る）を強化し、詐欺の追跡と防止に役立ちます。 + +#### 1.4.4　税負担 +ブロックチェーンの国境を越えた性質からもいくつかの課題が生じる可能性があります。たとえば実行場所に応じて、特定の取引に税が適用されることがあります。 +紛争を避けるために、ブロックチェーンネットワークに適用される法律を事前に指定する必要があります。 + +#### 1.4.5　操作上のリスク +スマートコントラクトや参照データのコーディングにおける間違いは、多数の参加者に影響を与える可能性があります。 +外部データに欠陥があるか利用できなくなった場合も同様です。 + +#### 1.4.6　相互運用性 +Cross-chain Crypto-Asset投資をサポートすることは、Betokenにとって大きなチャンスです。 +近い将来この課題に対処するソリューションが登場してきます（Polkadot、Cosmos、Kyber Network）。 + +## 2.実装の詳細 + +### 2.1　Kairo'sの分布 + +#### 2.1.1　初期分布 +私たちは、Kairo'sの初期配布を処理するために、初期口座開設（IAO）と呼ぶものを使用する予定です。 + +BetokenのIAOには、以下の特性があります。 + +* 自由に取引することができる通常のERC20トークンとしてKairoを解放するのではなく、ERC20標準を使用しますが譲渡不可能なトークンになります。 +* Kairoはゲームの経験値に似ており、Betokenの実際のユーザーだけがKairoを持つことになります。投機的なトークン等とは似ていません。 +* バイヤーが望む任意の金額のトークンを購入させるのではなく、Netflixアカウントを取得する方法に似たスキームを使用します。 +　各ユーザーはKairosが充填されたBetokenのマネージャーアカウントを購入できます。$ 10、$ 50、$ 100という3つの価格層があります。 +Netflixの定期購読とは異なり、アカウントに一度だけの支払いが必要です。 +この設定は、Kairoを操作するための大口ホルダーのインセンティブを減少させ、ほとんどのマネージャーが平等な競技場でスタートすることを保証します。 +* 紹介プログラムが利用可能になります。 +　他人を紹介した人と被紹介者は、新しいKairo（例えば、新しい口座の価格の5％）を得るでしょう。 + これは、Betokenが効果を発揮するために必要なファンドマネージャーを得るのに役立ちます。 + +#### 2.1.2　継続的な配布 +IAOの後は若干高い価格になりますが、新しいマネージャーアカウントは同じ方法で作成されます。 +これにより、IAOに参加したかどうかにかかわらず、誰でもBetokenにマネージャーとして参加できるようになります。 +さらに、新しいファンドマネージャーを参加させることによって引き起こされたKiroのインフレは、非アクティブなマネージャーの手数料を減らし、BetokenのIncentivized Meritocracyの有効性を向上させるのに役立ちます。 + +### 2.2　サイクルフェーズ +各サイクルは2つのフェーズに分かれています。 + +* 休憩 + * 入金と引き出し：投資家は入金や引き出しができます。 + * コミッション償還：Kairoホルダーはコミッションを償還することができます。（一回の操作） +* 管理：マネージャーがファンドに投資するためにKairoを使います。 + +各フェーズの長さは次のとおりです。 + +休憩：3日間 +管理：27日間 +合計30日間。 + +ファンドを次の段階に移行させる時に、成功したファンドマネージャーはKairoで報酬を得ることができます。 + +### 2.3　トークン交換 +Betokenは、すべての投資を実行するためのトークン交換プラットフォームとしてKyber Networkを使用しています。 + +Kyber Networkは「トークン使用のさまざまなケースに対して誰でも利用できる分散型流動性ネットワーク」です。 +Kyor Networkを組み込むことで、Betokenの動作量を最小限に抑え、Betokenの被攻撃面を大幅に減らすことができます。 +また、Betokenの運用コストと保守コストを削減し、セキュリティを強化します。 + +### 2.4　ガバナンス +プロジェクトの高度な分散化レベルを維持しながら簡単なユーザーエクスペリエンスを提供するため、Betokenはオプトアウトガバナンスと呼ばれるユニークなガバナンスシステムを使用してスマート契約のアップグレードを処理します。 + +アップグレード毎に、およそ4つの段階があります： + +1. アップグレードが必要かどうかを決定する +2. 受け入れるアップグレードを決定する +3. 投資家はアップグレードが気に入らなければ資金を引き出す +4. アップグレードされた契約に移行する + +アップグレードには、次の3つの方法があります。 + +1. **開発者主導のアップグレード：**既存のスマート契約によって指定されたBetokenの開発者は、一方的にアップグレードを開始することを決定する可能性があります。 +各サイクルの中断段階では、開発者はアップグレードを開始し、新しいスマート契約のアドレスを同時に提供することを決定することができます。 +マネージャーは、サイクルの管理フェーズで新しい契約を確認します。投資家はアップグレードを承認しない場合、資金を引き出すことができます。 +マネージャーが異議を唱えることがない場合は、Betokenは次のサイクルの中断段階の後に新しいスマート契約に移行します。 + +2. **マネージャーによるアップグレード：**マネージャーコミュニティは、開発者の承認の必要なしに、アップグレードを開始することを総括的に決定する場合があります。 + （注：下記のすべての投票の定足数は10％です） + 各サイクルの中断フェーズ中に、マネージャーコミュニティはKairoを使用して単純な多数決でアップグレードを開始することを決定する場合があります。 + 投票が合格した場合、管理フェーズのマネージャーはKairoを使用して、どのスマート契約を新しいバージョンとして受け入れるべきかを投票することができます。 + アップグレード対象を投票する場合、27日間の管理フェーズは9日間の3つのチャンクに分割されます。 + 最初のチャンクでは、最初の日に、アップグレードを提案したいマネージャーの中で最もKairoを持つマネージャーが投票候補者を決定します。 + 残りの2回のチャンクで、候補者の提案者以外のマネージャーはKairoを使用して、この候補をアップグレード対象として受け入れるかどうかについて投票することができます。 + - 大多数（> 75％）が「はい」と投票した場合、その候補はアップグレードの対象として受け入れられます。それ以上の投票は必要ありません。 + - 75％以下が「はい」と答えた場合、または定足数に達していない場合は、次のチャンクで同じプロセスを繰り返します。 + 以前の提案者を除いたKairoが最も多いマネージャが候補を提案します。 + 提案者は、現在および将来の投票に参加することはできません。 + - 6票以上の投票が無いまま18日間（２チャンク間）経過した場合、アップグレードは中断されます。 + 　　最後の第三チャンク（9日間）は、6票の投票が成功した場合のアップグレード対象のコードを確認するために予約されています。 + + アップグレードに反対する投資家が資金を撤回した後、Betokenは新しい契約に移行する。 + +3. **マネージャーは開発者のアップグレードを上書きします：**開発者がアップグレードを開始した後、マネージャーコミュニティがアップグレードが悪い/悪意のあると判断した場合、管理フェーズでマネージャーが開始したアップグレードプロセスに進み、開発者の決定を上書きできます。 + マネージャーが管理フェーズ後にアップグレードターゲットを決定した場合、そのターゲットが使用されます。そうでない場合、開発者のアップグレードは正常に続行されます。 + + +オプトアウトガバナンスシステムを使用することには、いくつかの利点があります。 + +1. 開発者が正直に行動することを考えれば、このシステムはBetokenの通常の操作にほとんど影響を与えません。 + これにより、Betokenのユーザーエクスペリエンスは、マネージャーと投資家の両方にとって、スマートな契約のアップグレードによって悪影響を受けないことが保証されています。 + これは消費者向けの製品には不可欠です。 + + 開発者が不正/悪意のある行為をした場合、コミュニティは開発者の決定を無効にすることができます。 + 投資家は、それが失敗した場合でも資金を引き出すことができるため、システムと資金のセキュリティは最大限保証されます。 + +2. 開発者はガバナンスシステムにとって重要ですが、更新が発生する必要はありません。 + これは、Betokenが機能するための中央の権限を必要としないことを意味し、開発者への攻撃に対するBetokenの堅牢性を保証します。 + +## ３．市場分析 + +### 3.1　競合他社 +Betokenは、投資家のための競争と経営者のための競争の2種類の競争に直面しています。以下でそれらについて説明します。 + +#### 3.1.1　投資家のための競争 +Betokenは独占的に暗号通貨に投資するため、当社の顧客基盤は、株式や債券に投資する従来のヘッジファンドとは異なります。 +具体的には、当社の顧客基盤は、主にオープンな認定投資家と個々の暗号通貨投資家で構成されます。 +この顧客ベースには、次の2つのタイプの競合があります。 + +* cryptocurrenciesを新しい投資オプションとして含む伝統的なヘッジファンド。 +* （部分的に）ICONOMIやMelonなどの分散型暗号通貨ヘッジファンドプラットフォーム。 + 　　ICONOMIとMelonはどちらも、ユーザーが暗号通貨に投資する独自の伝統的なスタイルのヘッジファンドを構築できるプラットフォームです。 + 　　彼らはBetokenと同じ顧客基盤にアピールしますが、プラットフォーム上のファンドマネージャーはそれぞれ独自の情報と投資戦略を保ちます。 + 　　Betokenはマネージャーのスキルとリソースを組み合わせてファンドの利益を得ることができます。 + +投資家には、リスクとROIという2つの指標だけが重要な意味を持ちます。 + +* Betokenは、伝統的なヘッジファンドよりもリスクが高くなるはずです。 +　　他の分散型ヘッジファンドと比較して、Betokenのリスクは同等である。 +* BetokenのROIは、主にIncentivized Meritocracyの有効性に依存しており、現時点では推測できません。 + +したがって、Betokenが直面する競争の強さは、ROIに大きく依存します。 + +* それが他のものよりも著しく優れているなら素晴らしい。上記の競合他社のどれも関連性がありません。 +コピーキャットが出現するかもしれないが、ネットワーク効果と最初のムーバーの優位性がBetokenを一番上に保つだろう。 +* 前述の競合他社と同じレベルであれば、BetokenはICONOMIとMelonで頭を下げていきます。どちらもすでにBetokenが発売される前から長時間立ち上げられています。 +　　競争は激しくなるだろうが、Betokenは唯一のクラウドソース暗号通貨ヘッジファンドとしての地位を保持する。 + +#### 3.1.2　マネージャーのための競争 +この分野にはいくつかの競合があります： + +* ICONOMIとMelonは、マネージャーがカスタマイズ可能なルールで独自のヘッジファンドを作成できるプラットフォームです。 +　　カスタマイズの自由はいくつかのマネージャーにアピールするかもしれませんが、それには独自の欠点があります。 +　　あなたが加入すれば、そのプラットフォームでのファンドの投資方法、顧客基盤、評判などを一からブートストラップする必要があります。 +　　一方、Betokenの新しいマネージャーは、すぐに本格的なファンドのために働くことができるようになります。 +　　それはあなた自身の会社を立ち上げることと確立された会社に就職することの間の難しさの違いです。 + +* Numeraiは、データ科学者が株価を予測するための最良のアルゴリズムを提供するために競争できる、興味深いオークションシステムを使用するヘッジファンドです。 +　　最高格付けアルゴリズムは、ヘッジファンドの投資決定に使用されます。 +　　NumeraiのモデルはBetokenのモデルよりもすべての点で劣っています。 +　　なぜなら、 + * Betokenでは、コミッションはファンド資産の規模に比例しますが、Numeraiでは必ずしもそうではありません。 + * 科学者たちがNumeraiで作るベットデータにはバイナリの結果があります。ステークトークンをすべて失うか、失うことがないか。 +　　　対照的にBetokenの決定には、はるかに詳細な結果があります。これにより、Betokenはリスクを回避するマネージャーの方がより魅力的です。 + * Numeraiのモデルは、実際の投資判断で優れたアルゴリズムではなく、過去のデータに最も適したアルゴリズムに報酬を与えるため、モデルの最適化目標と実際の目標との間にはギャップがあります。 +　　　一方、Betokenのモデルは、実際に最良の決定/最も利益を上げるマネージャーに報酬を与える。 + * マネージャーとしてNumeraiに参加するための急速な学習曲線がありますが、Betokenの投資決定を開始するために必要なものはKairoだけです。 + +* QuantopianとQuantiacsは、Numeraiに似ているが若干優れたモデルを使用して、クラウドソーシングされたヘッジファンドです。 +　　ユーザーは取引競争でアルゴリズムを入力し、実際の投資には最高のアルゴリズムが使用されます。 + * ステークやベットはありません。誰でも無料で競技会に参加することができます。 + * アルゴリズムは機械学習を使用する必要はないため、管理者はデータ科学者である必要はありません。 + * アルゴリズムは取引ボットの形で提供されるため、Numeraiの機械学習アルゴリズムよりも実際の取引とかなり関連しています。 + * アルゴリズムを獲得する開発者は、アルゴリズムによって生成されるすべての利益を実際に得ます。 + +ファンドマネージャーは自分が気に入っている複数のヘッジファンド/プラットフォームの意思決定を行うことができるので、マネージャーの競争は投資家の競争ほどおそらく熾烈ではありません。 +しかし私たちはBetokenが大部分のマネージャーのための主要な選択であると信じています。 +私たちは以下のリストとマネージャーの観点からBetokenに参加することの長所と短所を挙げます。 + +##### 3.1.2.1 Betokenをマネージャーとして選択するための利点 +* エントリの低い障壁。特定の言語、API、またはアルゴリズムのタイプ、あるいはプログラミングに関するものを学ぶ必要はありません。 +　　あなたがする必要があるのは、いくつかのKairoを取得し、決定を下すことだけです。 + +* ブートストラップの努力は必要ありません。Betokenの新しいマネージャーは、資金を自分で立ち上げるのではなく、すぐに本格的なファンドのために働くことができます。 + +* より高いリターン。Betokenでの意思決定のROIは、トークンに直接投資するROIよりも高く、得られるコミッションはファンドの資産に比例します。 +　　あなたの利益の大部分を正当な理由で取り除く仲買人はいません。 + +* 自動化：Betokenは、購買、販売、報告プロセス全体を自動化します。パート1.3.4運用コストの削減を参照してください。 + +##### 3.1.2.2　マネージャーとしてBetokenを選ぶための短所 +手数料率などのファンドで使用されるパラメータは単一のマネージャーの意思によって変更することはできませんので、 +マネージャーがICONOMIやMelonのような代替案を選択することが完全に自由であれば、それはより良いでしょう。 + +### 3.2　分散型暗号通貨ヘッジファンドの需要 + +#### 3.2.1　投資家からの需要 +Betokenの競合企業の1つであるICONOMIでは、ユーザー数と簿価が急速に伸びています。 +[ICONOMIのQ4 2017財務報告書](https://medium.com/iconominet/iconomi-financial-report-q4-2017-17da25349f3d)を引用： + +> 前四半期のユーザベースは50％以上増加し、**1月には1万人以上の新規ユーザが追加されました。** +> 当社の簿価は3億2,700万ドルに増加し、これは第3四半期に比べ173％増加した。 +> しかし、帳簿価格よりもさらに重要なのは、プラットフォームが生み出す収益です。 +> **DAAは、1四半期に20万ドル以上の収益を上げ**、第3四半期に比べて4倍以上に増加しました。 + +この証拠から、分散型暗号通貨ヘッジファンドに対する需要は、現実的かつ急速に増加していることは明らかです。 + +[Morgan Stanley](http://www.businessinsider.com/morgan-stanley-on-financial-institutions-interest-in-bitcoin-2017-12)によれば、投資家は2017年の暗号通貨投資に特化したヘッジファンドに**20億ドル**以上を投資しており、2018年はおそらくもっと大きくなるでしょう。 + +最新の暗号通貨ファンドの見積もりは、2018年の初めに226件であり、管理下の資産は3.5〜50億ドルである。 +2018年は2017年と同じオーダーである可能性があります。 +また、[Eurekahedge Crypto-Currency Hedge Fund Index](http://www.eurekahedge.com/Indices/IndexView/Eurekahedge/682/Eurekahedge_Crypto_Currency_Hedge_Fund_Index)によれば、2017年に最高の9つの暗号通貨ファンドで1,708.49％の収益を目撃しました。 +このような業績で、次の数ヶ月間に新しい投資家が大規模に流入する可能性があります。 + +#### 3.2.2　マネージャからの需要 +クオンツとデータ科学者がヘッジファンドに参加することに興味があるという証拠があります。 + +* Quantopianの[ウェブサイト](https://www.quantopian.com/about)によると、70万以上のアルゴリズムが生涯にわたってそのプラットフォームに提出されています。 +* [Wiredの記事](https://www.wired.com/2016/12/7500-faceless-coders-paid-bitcoin-built-hedge-funds-brain/)によると、7,500人以上のデータ科学者が2016年にNumeraiの競技に参加しました。 +* ICONOMIのプラットフォーム上でヘッジファンドを作成するために使用されるICONOMIトークンの市場キャップ、現在は156万ドル以上です。（Coinmarketcap、2018年2月8日） + +## 4.ロードマップ + +### 2018年1月 +* MVP +* ランディングページ +* テストネットアルファ + +### 2018年2月〜6月 +* UIとUXの改善 +* さらなるスマートな契約開発 +* 内部契約監査とテスト +* インセンティブモデルの分析と調整 + +### 2018年7月〜8月 +* 法律コンサルティング +* コミュニティ活動 +* フロントエンド開発 +* Testnet Beta + +### 2018年9月〜12月 +* トークンの販売 +* スマート契約監査 +* メインネットパイロット + +### Q1 2019 +* 公式リリース + +### Q2 2019 +* 税金＆法律ツール +* 機械学習エージェントをサポートするPython API + +### Q3 2019 +* より多くの機能とカスタマイズ性を備えたプロUI +* より多くのAPIサポート + +## 5.チーム +#### Zebang (Zefram) Liu +ZeframはBetokenの共同創業者でリード開発者です。 +彼は現在、UCサンディエゴでコンピューターサイエンスを学んでいます。彼は暗号経済学とメカニズム設計に熱心です。 + +#### Guillaume Palayer +GuillaumeはBetokenの共同設立者です。 +彼の使命は、dAppのフロントエンドの経験を設計しコード化することです。 +彼はまた、トークン経済と分散されたWebに熱心なユーザー調査者です。 + +## 6.謝辞 +このペーパーの以前のバージョンに対するフィードバックについては、友人、Surya Krishnan、Angélique Rebardel、Maxime Ruizに感謝します。 \ No newline at end of file diff --git "a/jp/Betoken\343\203\233\343\203\257\343\202\244\343\203\210\343\203\232\343\203\274\343\203\221\343\203\274.pdf" "b/jp/Betoken\343\203\233\343\203\257\343\202\244\343\203\210\343\203\232\343\203\274\343\203\221\343\203\274.pdf" new file mode 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