Our second Meetup was on the 28th of November with another Ethereum based project: Melonport - Technology Regulated Investment Funds. The event was sponsored by EY Switzerland (thanks also to our Treasurer Isabella Brom to make this happen) and was hosted in the nice Auditorium in the new headquarter near Hardbrücke. It was the day where Bitcoin broke through the USD 10’000, so the audience of about 70 enthusiasts was in a good mood that evening. After some opening words from me, the CEO & Co-Founder of Melonport Mona El Isa started her talk. First she brought up some details about her career. Mona is a former star-trader at Goldman Sachs, promoted to Vice President by the age of 26 and made the “top 30 under 30” list in Trader Magazine in 2008 and Forbes Magazine in 2011 after profitably trading the 2008 and 2011 crashes. Moved to Geneva-based macro fund Jabre Capital in 2011, before deciding in 2014 that the future of finance lay in Blockchain technology. She studied Economics & Statistics at the University College London.
What she got from there was that it’s very difficult und inefficient to start her own fund or hedge fund. So the idea of Melonport was born, a protocol to launch investment funds. For Mona Ethereum is a Blockchain Computer und Melonport is using these possibilities. In her view, all assets will be tokenized in the future. There are a lot of non-believers, but this has been the case for junk bonds, ETFs, emerging markets or commodities as well in the past. Those were niches in the 80s and 90s and today big markets with a high market capitalization.
The Melon-Protocol enables for costs of just around USD 45 to set up a fund with a certain structure directly on the Blockchain. This costs should even shrink in the future. The protocol already is quite sophisticated. So the available exchanges to get the asset universe can be chosen, the fees, data feed and risk management structure. The rules will be executed by smart-contracts, enforced by the Blockchain. The track record of this fund is always auditable in the Blockchain. The Melon Token allows the functionality of the funds. To get the investment fund started the Melon Tokens are needed as base currency. The Melon Token are also being an incentive for the Melon Chain Maintainers (Give them votes to care, a kind of delegate). Because of the issues with the Ethereum platform there is also an option to set up an own Blockchain in the future, but it’s not decided right now. If the Ethereum Network will be in a better shape in the future there is no need for it.
Mona brought up reasons, what will be in her view better with Melon instead of the existing, centralized Investment Funds:
-better performance due to lower barriers
-much lower fees
-More transparent Fees
-Reduced need for middle man
-Transparency of investment products
Madoff fraud or Lehman Brothers' fall for example could have been avoided. No room for conflict of interest, because there is the Blockchain which tracks the performance of the portfolio and all moves indelibly.
After these facts, Mona showed in a demo the test version of the Melonport protocol in the Ethereum Testnet. Because of gas-issues, no live demonstration was possible, but Mona had prepared a recording. It was quite impressive how it was possible with a few mouse clicks to set up a specific investment fund. She showed also how investments are booked and the performance will be measured.
Melon still have some Token left from the sale. Because there is no need to raise additional money the team will set up several contests where “Crypto Investment Managers” can participate in a crypto exchange game for a specific amount of time. This will be with play money, but the best mangers (best performance) will get paid with this Tokens – worth several million at the moment. So a great incentive to participate there!
After her talk Mona got a lot of questions from the audience. Finance and Blockchain is something where there is a lot of attention in Zürich. Mona received a big applause for this well prepared and interesting presentation. The community used the time after the official end for additional talks and discussions with Mona and getting some refreshments sponsored by EY.