With preparations well underway for its Pre-ICO on 30 November, Darico is set to reshape the cryptocurrency environment by providing a safer, more accessible route to crypto investment. We spoke to Mojtaba Asadian, founder and CEO, to learn more about him and his vision for Darico.
Tell us a little about yourself and your background.
Well, I’m Mojtaba Asadian, the founder of Darico. I am a serial entrepreneur with an extensive background in both the institutional and retail sides of investment banking. This has given me a great all-round view of the finance sector and it’s been a privilege to work with so many different types of clients.
How did you first encounter cryptocurrencies?
I first heard about Bitcoin in 2012, on a Bloomberg news item. It had cropped up in the media because of the associations with The Silk Road and the Dark Web but despite these associations, I was intrigued and began to make a point of learning more about Bitcoin and cryptocurrencies in general.
What excited you most about cryptocurrencies?
By 2015, I’d learned a lot about Blockchain technology and could see the potential for it to disrupt the finance sector, not only as a platform for currencies but also in administrative roles. I was genuinely excited about the enormous range of possibilities.
Talking about coins and investments. What coins do you own, yourself?
Like all good investment managers, I try to maintain a diversified portfolio and so have built holdings in a number of cryptocurrencies that interest me, including Bitcoin Ether, Dash and Zcash.
Would you like to share what your investment strategy is?
As I mentioned, diversification is the overall strategy but at the same time, I’m not going to buy a coin just because it exists, there has to be a reason — an understandable pathway that means I can see how the currency can reach its potential.
I chose Bitcoin of course, because it’s the first, the original pioneer cryptocurrency. I’m sure it’s got a great future ahead, so I’m going to stick to Bitcoin and keep increasing my holding.
Ethereum and Ether are interesting to me because it’s an advanced network designed to operate smart contracts. This gives it plenty of potential. I also use Ether to transact on an Ethereum virtual machine, which gives a practical reason for holding it.
Dash has a great community, which is one of the first signs that a cryptocurrency could be successful. I recently attended their first conference in London and enjoyed learning more and becoming a part of the community. With Zcash, I think the anonymity features are interesting.
Now you’ve taken your interest a step further and have launched your own currency — Darico. What convinced you to do that?
When you analyse cryptocurrencies and crypto assets, you can see that they are affected by a range of issues when comparing them to traditional asset classes. The first and foremost is an issue that everyone can relate to — volatility.
Prices tend to fluctuate, maybe 10%, 15%, sometimes up to 20% a day. That’s not healthy for a portfolio. Especially, if you have a large portfolio — that’s risky and you want to avoid that.
The second issue I identified was market illiquidity. The market was really small up to the end of last year. We began 2017 with a 10 billion dollar market cap and today we are at 210 billion but this is still a fraction of the size of the traditional asset markets and one reason for this is the difficulty people have with buying, selling and converting their crypto assets. There’s a long way to go before the crypto markets rival the 5 trillion dollar FX market and increasing liquidity will be essential to achieving this.
The very last issue, one that a good portfolio manager would notice, is the high correlation between crypto assets. They have similar characteristics and tend to move up and down in the same direction, making it more difficult to build a truly diversified portfolio.
It was the identification of these three issues that led to Darico coming into existence.
How did you design Darico and features like the Genesis account?
Darico stands for decentralized, asset-backed, return-focused, investment-grade coin and it describes the concept of a cryptocurrency that’s backed by a basket of assets. Once we had the idea, we looked into it further and identified a formula — ⅔ crypto assets and ⅓ safe haven assets like gold, as being the most effective at providing exposure to the potential growth of cryptocurrencies whilst being protected by a safety net. The final proportions of assets used to back Darico ar 55% Bitcoin, 35% gold and 10% Ether.
Initially, the coins are going to be fully backed by the assets, and this is made possible by the contributions that come from the ICO. People who invest at this first stage will also benefit from being provided with Genesis Accounts that will generate new coins over an 18 year period.
Both Darico Coins and the Genesis Accounts will be tradable on exchanges, enabling people to benefit from performance on the secondary markets.
How is Darico different from other currencies?
Although Darico will initially be managed by Darico AG in Switzerland, the longer term aim is to Darico pass control of the Coin to the Darico community. We want Darico holders to be able to propose and vote ideas to enhance the coin. These proposals could include changes to the assets backing the coin or other aspect. Just as long as they’re aimed at improving returns or the coin’s stability.
What role do you see Darico playing in the crypto world and why do you think people should buy Darico coins?
Darico is an excellent choice for people looking for a way to enter the world of crypto investment but who aren’t sure how to do it or who are put off by the volatile nature of the crypto markets.
Darico represents one of the safest ways to invest in cryptocurrencies and we believe there’s a strong market for less volatile crypto assets.
As well as first time and risk averse crypto investors, we believe Darico has a big role to play in diversifying existing portfolios.
Will the value of Darico only follow the NAV of its assets?
We believe that demand for Darico will probably create some level of premium that will have an impact on the market price.