- INDX provides the benefits of masternodes without the hassle – pure passive income.
- Security token regulations have brought “huge hurdles”, something that INDX is looking to overcome.
- Crypto winter has swept away “opportunistic jokers” according to INDX CEO Jonathan DeCarteret.
INDX is one of the new tranche of cryptocurrencies making their way to market that has got investors feeling pumped – security tokens. INDX Capital itself is designed for those who want exposure to the passive income that masternodes provide, but don’t have the time or expertise to run them themselves – INDX will select, buy, operate, and sell the masternodes in line with market trends, as well as operating a hedging service to cater for cryptocurrency’s noted volatility… so all the token holders need to do is sit back and take in the profits.
Following our introduction to the project, one of our writers, Mark Hunter, sat down with INDX CEO Jonathan DeCarteret to discuss INDX and the wider STO market.
MH: How would you describe masternodes to the uninitiated and what is their appeal?
JDC: Simply put, masternodes are the next generation of mining. They differ from Bitcoin mining since they do not require powerful computers with huge electricity costs. Instead you are required to deposit a financial stake. Once they are up and running, they constantly generate revenue.
MH: Why does the crypto world need INDX instead of individuals running their own masternodes?
JDC: Operating a masternode is often tricky and highly complex. You need to run them on enterprise level VPN servers, configure them in Linux and constantly update and secure the wallets to ensure they are synched to the chain and receiving rewards. Trickier still is deciding which to invest in from over 500 available.
MH: How does INDX pick which masternodes to feature?
JDC: The INDX algorithm. In layman’s terms, the algorithm applies a series of filters to remove unwanted masternodes from the investable universe. We then take a risk-adjusted position, in a basket of the best performing masternodes to maximise returns. The algo rebalances each month. Simple really.
MH: How did you come up with the idea for INDX and how different is it than your initial vision? JDC: Since crypto trading and investing is super time-intensive, I started looking around for passive income plays. At the same time I was researching crypto indexes that give you diversified exposure. INDX was my lightbulb moment to combine the two and create a portfolio of masternodes. INDX today is much more sophisticated model, but the principle has remained the same.
MH: You are classed as a security token, what challenges has that brought?
JDC: Huge hurdles. We started out knowing we wanted to pay a dividend, which clearly makes us a security, but this was before the term STO was around. There wasn’t a regulator that would allow us to tokenize the fund or invest in the alternative asset class of crypto, and there was no issuance technology to keep a dynamic register of the cap table or ensure only qualified investors participate. There weren’t even any regulated crypto security exchanges. Needless to say all those problems have now been resolved.
MH: Has the bear market affected your progress with INDX?
JDC: With our MVP progress, no. With our token sale, yes.
MH: What are the biggest challenges facing INDX at the moment, and what challenges do you see down the line?
JDC: We’ve solved all the major challenges, so we’re into optimization mode. We introduced a hedging strategy to protect the assets under management from a flash market crash and there’s lots of back-testing to refine performance. We’re starting to design the investor dashboard, which is the fun bit after the backend tech.
MH: What was your route into crypto, and is INDX your first crypto venture?
JDC: New Years Eve 2012, The Keepers Pub, Cotswolds. A dear friend sat me down and explained how Austrian economics, cryptology, and blockchain had given birth to Bitcoin. I was hooked from the get-go. I’ve founded media and fintech startups my whole adult life, most notably Switch Media, which I grew to the UK’s 60th fastest growing company. After launching a property crowdfunding PLC I began investing in crypto and ICO’s. INDX is my first pure crypto venture.
MH: What advice would you give anyone starting a crypto project, particularly an STO?
JDC: Solve the regulation question first, as this will determine a lot of business fundamentals. Network hard, there’s a lot of smart operators with learnings to acquire. Constantly iterate your whitepaper, as it’s going to change a lot.
MH: If you could go back to the time you had the idea for INDX, what would you do differently? JDC: Better understand the mammoth journey ahead. Refine the team to the core talent. Ban Slack, it’s just noise.
MH: Your STO is launching in May. What do you make of the state of the STO market in general?
JDC: Overall good. The crypto winter swept away the opportunistic jokers and ICO madness, leaving just the veterans and smarter operators. It’s still a super nascent time for STOs and nobody knows how it’s all going to pan out. The good news is that the crypto market has emerged wiser, more mature, and better prepared for the next phase of growth. It’s sure to be a wild ride.
Thanks to Jonathan for taking the time to speak to us during what is a crazy time for him and the INDX team. You can find out more about INDX Capital, and register for their STO, on their website.