WHITE PAPER ICO - Fx empire paper elpis ico - english.pdfElpis is a company with a dream: shaping...
Transcript of WHITE PAPER ICO - Fx empire paper elpis ico - english.pdfElpis is a company with a dream: shaping...
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WHITE PAPER ICO
AI Crypto-assets Investment Technologies
Elpis is going to start a cutting-edge hybrid investment-management company that brings together digital and investment fund expertise with the fresh, game-changing approach of a
start-up.
Elpis is a company with a dream: shaping the future together with ambitious investors who believe that great ideas, innovation, transparency, and fairness are the keys to be successful
in the new era of investing.
We have created an AI-based investment system that provides trading strategies tailored to investors’ needs and goals with total transparency.
We use technology with a clear purpose: maximize profits, minimizing risks and costs.
.
Version: 25/01/18
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TABLE OF CONTENTS
DISCLAIMER 3
The Abstract 4
Executive Summary 5
How does Elpis work? 6
The Third Wave of Investing 7
Digital Assets Fundraising: ICO 8
Crypto Equity Token ICO 9
Targets and Valuations of a crypto-equity token 10
Distribution of the tokens 11
Pre-Sale 12
Public ICO 12
Token Escrow 13
Token Earning Mechanism 13
Traditional Assets Fundraising: AUM 14
Blockchain Auditing and applications 15
Use of Blockchain 15
Use of Blockchain for crypto investors 16
The Market 17
Traditional Asset Management market 18
Crypto trading 21
The Product: Elpis Platform 23
Artificial Intelligence Trading 25
Machine Learning Strategies 26
Swarm Intelligence Portfolio Optimization 26
Our Track Record 27
Marketing 29
Value Proposition 30
Competition 31
SWOT Analysis 32
Team 33
Employees 33
Recruitment program 34
Advisors 35
Partners 35
Mission and Milestones 36
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DISCLAIMER
PLEASE READ THIS DISCLAIMER SECTION CAREFULLY. IF YOU ARE IN ANY
DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR
LEGAL, FINANCIAL, TAX, OR OTHER PROFESSIONAL ADVISOR(S).
The information set forth below may not be exhaustive and does not imply any elements of a contractual
relationship.
While we make every effort to ensure that any material in this White Paper is accurate and up to date, such material
in no way constitutes the provision of professional advice. The team of Elpis does not guarantee, and accepts no
legal liability whatsoever, arising from or connected to, the accuracy, reliability, currency, or completeness of any
material contained in this White Paper. Potential token holders should seek appropriate independent professional
advice prior to relying on, or entering into any commitment or transaction based on, material published in this
white paper, which material is purely published for reference purposes alone. Elpis tokens will not be intended to
constitute a guaranteed investment opportunity.
The content of this white paper has not been approved by an authorised person within the meaning of the Financial
Services and Markets Act 2000. Reliance on the white paper for the purpose of engaging in any investment activity
may expose an individual to a significant risk of losing all of the property or other assets invested.
Also, this document does not constitute a prospectus or offer document of any sort and it is not intended to
constitute an offer of securities or a solicitation for investment in securities in any jurisdiction. Elpis does not
provide any opinion or any advice to purchase, sell, or otherwise transact with its tokens and the fact of presenting
this White Paper shall not form the basis of, or be relied upon in connection with, any contract or investment
decision. No person is bound to enter into any contract or binding legal commitment in relation to the sale and
purchase of tokens, and no cryptocurrency or other form of payment is to be accepted on the basis of this White
Paper.
The token itself does not on its own fail the Howey and Reeves tests since it does not have voting rights, claim to
asset and claim to revenue. We can argue that a token holder can redeem shares (based on the agreement that’s
stated below). If the token holder should pass "shareholder" criteria of local jurisdiction before he holds shares it
would be subject to security law. This argument of redemption (whose shares are not yet in existence at company
house) can one day be classified as a regulated activity (not explicitly today) so we’re not closing that possibility.
However, even a "utility" token poses some risks of being regulated either as money, cryptocurrency, and even as
a security because of the intention of "investing".
What sets crypto equity or elpis' model apart from normal ICO activity is that the token has real market
fundamentals behind the token itself. You want to invest on the team, the potential of product and market. With
the token price following the share price (where the token is emitted and share does not circulate) that it should in
theory reflect that value. It can be argued the token to be close to a derivative but the underlying still does not
exist. Anyway, due to these multiple possibilities, we highly recommend KYC and AML requirements should be
in place, and Elpis has adopted this before purchasing.
Finally, we specify that the company raising through ICO is a technology company, not the fund, hence you are
contributing to the realization of the technology. The technology company will then register the regulated entity
and commence the operations only once the ICO is being done.
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The Abstract
Before we proceed to explain what we are doing and want to do, let us state where we come from.
The project was conceived and developed by a group of Italian experts and has rapidly outgrown our
deepest expectations, leaving us with a bigger project that the one we expected. Big projects, in startup
terms, are equivalent to big risks. Nowadays Venture Capital is for sure an expression that everybody
likes to use, but for some countries, like Italy, the approach of Venture Capitalist is still very often
inadequate and unrealistic.
The risk approach of Italian investors to young and hungry entrepreneurs like we are is inadequate to
take the actions necessary to sustain projects like ours. Luckily, the technologies and the disruptive
innovation we are using allow us to find the funding required to keep on building a disruptive project
of the magnitude we imagine. Finance more than any market requires openness and transparency,
fairness and trust, and taking advantage of the new possibilities opened by technology is not only an
opportunity but a moral obligation.
A hedge fund for regular people is no longer an impossible dream to realize, but a realistic goal that we
want to pursue to make a real difference in this environment.
Why Elpis? Elpis means Hope in Ancient Greek. The etymology perfectly symbolizes our vision and goals: we
dream and strive to build something completely new and unknown, to follow our dreams and achieve
results that might seem unthinkable: we hope and work for great results despite all the obstacles. Elpis
in the Greek Pandora’s myth described by Hesiod, represents the personification and spirit of hope.
Once Pandora opened the jar the gods gave her, all the evils come out to the world: the only thing left
when the lid of the Pandora’s jar was closed was Elpis, hope.
“Only Hope was left within her unbreakable house, she remained under the lip
of the jar, and did not fly away. Before she could, Pandora replaced the lid of
the jar. This was the will of aegis-bearing Zeus the cloud gatherer.” (cit.
Hesiod’s Works and Days)
Elpis, after all the evils had come out, despite all the difficulties and obstacles, despite all the evil, past
and present, was still there: there will always be hope for the ones who want to take on the challenge of
thinking the unthinkable, of creating what does not currently exist. There is always Elpis, there is always
hope for the ones who wish to overcome every obstacle to realize their dreams.
This is Elpis: a team of passionate individuals and believers, dedicated to shape the future of investing
in addition to been strongly committed to build a solid business. To grow together with investors who
also hope in the possibility of creating a new investing landscape. Through great ideas and passion,
efficiency and real innovation, transparency and fairness: these are Elpis keys to thrive in the new wave
of investing. Because we hope and because we work hard to shape a different future. With our clients,
not at their expenses.
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Executive Summary
Elpis is a cutting-edge hybrid company that brings together digital and investment fund expertise with
the fresh, game-changing approach of a start-up. Through state-of-the-art AI technologies, we have a
completely automated technology-driven trading tech able to provide the market with tailored,
transparent and efficient investment strategies. We value our future investors’ needs and goals: we built
AI technologies able to secure wealth and maximize returns. Our system crunches large quantities of
data, analyzing and selecting the most useful information in order to instantaneously implement the
customized strategies. The clients of our future fund will not only understand what’s happening to their
assets at any time, but they can also constantly monitor and follow every decision and movement of
their money through the blockchain ledger. Elpis is committed to give the highest levels of transparency,
maximizing the returns at the lower rates, minimizing all the risks and costs inherent to all the human-
based investment management systems.
Elpis is not only a hybrid company that unites financial expertise with technological innovation, it’s a
hybrid company also because of our unique way of approaching new markets and new opportunities.
Thanks to our technology and our outstanding team, we are able to create technologies to invest
using the same AI-based system both in assets and in cryptocurrencies: this is why Elpis is unique
and it’s going to build the first crypto-assets investments fund in the world.
Traditional finance is slowly dying as a whole
and requires a deep change in terms of
transparency and in the definition of a new
business model.
The problems in the financial markets are:
- LOW TRUST
- NO TRANSPARENCY
- HIGH COMMISSIONS
- LOW PERFORMANCE
The Market Demands more Simplicity,
Transparency, and Efficiency. We will be able to
offer the power of AI to the market of
Professionals and also Retail or non-professional
investors under the same umbrella and with a
clear objective in mind: maximize profits,
minimize risks and costs, striving for total
transparency and openness, hence creating trust
and developing long-term and everlasting
relations.
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How does Elpis work?
The asset management market needs a revolution!
It starts with the ICO token holders who will buy our token giving us the amount required to register
the new management company. The company will be responsible for managing the digital assets
collected during the ICO, moving them into the main crypto-fund that will be created.
Only after the ICO, we will create the regulated fund and acquire customers with a clear prospectus.
The fund will directly manage through Artificial Intelligence the Assets deposited and then invests and
trade the Assets and the digital Assets on the stock exchange and on the crypto market.
Finally, the profits generated from the operations in the market will come back to the main company
that will buy back the token holders that have originally helped us build the fund..
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The Third Wave of Investing
Elpis team of experts built a unique trading system through an innovative application of the latest AI
technologies. We use technology with a purpose: successfully invest our clients’ money to secure their
wealth and grow their profits. Our investors’ goals are our goals. Unlike all the other available digital
management systems, Elpis actually has the power to instantly implement the data analysis into
customized investment strategy, getting rid of the bias, misinterpretations and costs inherent to human
investments management. Our investors will transparently monitor at any time every step of their
investments. The technologic systems are finally the core of the new wave of investing, the real
breakthrough that will be achieved with technology will generate a major and more positive impact in
the market. Technology will develop new relationships between financial services firms and clients,
more trust and integrity, and Elpis wants to be in fact on the front line of this major transformation.
Automated
A technology for the new era: our trading algorithms are totally AI driven. Machine learning and AI
are at the core of our business. Every decision our system makes is not affected by the biases and
misinterpretations typical of human-based management systems: your investment strategy is
automatically and constantly updated and re-balanced.
User Friendly
An online platform easy to use: you are just a click away from all you need. We will conceive the best
possible user experience for our investors, every tool is easy to understand and simple to use: through
an intuitive and comprehensive dashboard, you can efficiently manage your portfolio and follow your
investment strategy step by step. Our customer will be able to reach us whenever he wants: our team
is here for you whenever you need.
Transparent
We are investor-oriented: our goal is to maximize your profits in the most transparent and efficient
way. We guarantee the highest transparency on the market: We have a transparent fee plan, you will
have all the information you need before entrusting us with the responsibility of managing your
money.
Efficient
A technology-driven system built to eliminate mistakes, maximizing your profits. Our trading system
is completely technology-driven and automated: large volumes of data are processed at a pace and
with an accuracy that is simply unreachable to any human-based investment system and automatically
used to implement the best possible investment decisions, free from human mistakes and biases.
Fair Commission Policy
We want to be one of the most transparent digital investment companies on the market. Our investors
will receive all the financial information they need before entrusting us with their money
management. That is why our investors become our partners: we want to be paid only for
performances we can achieve alongside them, not at their expense. We will therefore not ask for any
kind of Management Fees, but we will propose a clear and fair policy to get paid on a Performance
base only.
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Digital Assets Fundraising: ICO
Revolutionary projects require revolutionary fundraising processes and high risks. The economics of
the market taught us that without risk there is no reward: without the ability of taking risks and without
great ventures, no progress will be possible in the investing landscape. Humankind, came out of the
caves by means of constant innovation: taking extraordinary risks and believing and investing in new
ideas, ideas that at first might have seem unthinkable by the masses. Risks and great goals are the engine
of change.
We are on the verge of a massive revolution made possible by pushing further innovation and
objectives: exceptional goals and purposes permeate every technology we are creating and using. New
technologies are opening to innovative ways to funding, especially in the case of start-up companies
like Elpis. Venture Capital is no longer the only viable possibility. Startups built on blockchain
technology – distributed ledgers that power cryptocurrencies like Bitcoin – are now looking into a novel,
viable option called ICO (Initial Coin Offering). In a classic ICO model, companies issue their own
tokens, auctioned in a crowd-sale. The token's proceeds are used to fund the team to build the finished
product and fund its operations. These tokens normally represent early product access.
The analogy to be made is to an initial public offering, when a company traditionally lists on a stock
exchange. The difference is that whereas IPOs are well defined and understood by governments, ICOs
are murkier. The U.S. Securities and Exchange Commission and other regulatory agencies are currently
investigating the practice, with no strong direction on how tokens are to be regulated. Today, tokens are
still not regulated as a security, but yet not illegal. However if they carry properties of shares, failing
the Howey and Reeves tests, these tokens run the risk of being regulated as a security. Further
requirements suffice such as more stringent KYC and AML. Just like Bitcoin and Ether, tokens that do
not carry properties of shares are operating in a grey area in most jurisdictions. Regulating these
cryptocurrencies and tokens that act as cryptocurrencies (those that do not carry share properties), is
something that is yet to be defined in terms of regulatory framework.
The fundraising tactic, which is a sort of crypto-financial twist on a Kickstarter campaign, has several
advantages over disadvantages. First and foremost, its nature is eminently liquid. Backers’ funds are
traditionally tied up in their bets until the company’s “exit,” going public or selling out. In this case,
investors can cash in and out whenever they like, converting tokens into Bitcoin, Ether, and fiat currency
at their leisure. No wait is necessary.
Beyond flexibility, technologists view ICOs as enabling new business models for open source projects.
Today, it’s not uncommon for developers to volunteer on various collaborative efforts, tinkering in vital
code repositories free of charge. With ICOs, coders have a means of generating value; the more
successful a project, the higher market participants may appraise it, the more rewards contributors may
reap (assuming they are token holders). In theory, it’s a virtuous cycle.
The approach has already produced early successes. The market capitalization of Ether, a digital
currency associated with the distributed computing network Ethereum, which you can read about in this
Fortune feature, has rocketed more than 500% in value since the beginning of the year. It’s no surprising
that other projects are looking into the prospects of an ICO too.
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Crypto Equity Token ICO
Elpis is fundraising through the means of a token offering called Crypto Equity, in partnership with a
Crypto Equity platform, CapchainX. Crypto Equity represents a more sustainable way of conducting
an ICO, in which tokens represent an indirect percentage of the Elpis company and are created on the
Ethereum Blockchain. Crypto Equity is backing cryptographic tokens with company’s equity as a
derivative. This means that each “coin” or token auctioned can be exchanged for real company share
certificates in the future, if redeemed by an “eligible qualified” token holder with more than 20 million
ELP tokens. The tokens, nevertheless, can be traded in a secondary market, offering a more liquid option
to token holders. Once share certificates are redeemed, the tokens are destroyed and the token holder
becomes a “shareholder.” Token holders will need to meet eligibility criteria to become “shareholders,”
meaning that they need to pass the security’s KYC/AML procedures.
Our crypto equity will be enabled through the Ethereum technology, the commitment from users to
generate support from the community, and the collective intelligence of our users.
After the creation of cryptocurrencies, we believe Crypto Equity represents the next frontier, in fact,
rewards give token holders a sense of ownership of the product, project and process. Crypto Equity via
ICO is the secret to unlocking innovation capital and is the bridge across the chasm between crowd-
funding and public market liquidity.
The ICO will allow us to create the first token with real economic fundamentals. Our Crypto Equity
will be an indirect investment in our company, creating a speculative system and market where our
investors will be rewarded with an interest in our equity, increasing the value of the token itself. And
also, being supported on the Ethereum technology, the value will increase equally to the value of the
cryptocurrency itself.
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Targets and Valuations of a crypto-equity token
Our objectives require a funding of 20.000.000 $ to be collected through the ICO.
Being a crypto-equity ICO, the token will distribute derivatives of 2.5% of the company equity, and
hence the valuation will be:
In the event of raising $ 20m for 2.5% of the company:
o Valuation Pre-money: $780 m
o Valuation Post-money: $800 m
The company could increase the equity% after the ICO to prevent over valuation
250,000,000 (two hundred fifty million) Elpis tokens (Elpis Coin) authorised can be exchanged for
2.5% company equity upon which, Elpis Coin can be exchanged for 2.5% of Equity before any company
dilution due to new founding rounds or share emissions. Equity distributed after dilution will be
proportional to the new number of existing shares. The % equity that can be redeemed will be reduced
(diluted) but the number of tokens in circulation will be the same.
Please notice that: on the money we raise will depend the realization of the fund.
IMPORTANT: The more DAUM Elpis will manage, once the fund has been built, better the rewards
will be for its token holders.
P.s.: Tokens, will have a vesting and cliff period:
Vesting: 2 years
Cliff: 1 year
Please note that: The vesting and cliff period only concerns accredited pre-sale investors and Team
Members.
Eligibility to exchange a token for a share
The Term sheet during the pre-sale will state that a single token holder with (20,000,000 twenty million)
tokens are able to redeem share certificates any time after May 1st, 2018 if criteria are met on a case by
case scenario. Upon which, tokens will be destroyed and share certificates will be issued and authorized
under Companies House only if:
A.) Token Holder falls under the criteria of an eligible shareholder.
B.) Token Holder passes necessary KYC/AML and other procedures to be an eligible shareholder under
local jurisdiction.
Otherwise, Elpis Coin token holder will not be eligible to be authorised and issued share certificates.
Token holder will remain as token holder.
Transferable securities are denominated in amounts of at least EUR 100,000 (or the equivalent), the
investor should be a qualified/accredited investor.
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Distribution of the tokens
The funding will be allocated as follows:
Public Allocation: 80% will be dedicated as Asset Under Management (AUM) to be invested in
realizing the fund that will invest in the stock market. It will constitute the assets managed in the fund
that will produce rewards through market and crypto trading.
○ CAP: Everything generated over the 20 million cap will be allocated in to the fund to
be invested hence to generating rewards. Elpis will not use the funding otherwise*
Team: 10% In order to pay the efforts of the entire team which is working on the project, 10% with:
○ CAP: $ 2.000.000.
HR: 4% dedicated to new hires in the fields of Engineering, Sales and Marketing.
○ CAP: $ 800.000.
One-off Costs: 1% is required to open officially our Fund and being regulated by the MiFID.
○ CAP: $ 200.000.
Operations: 2% to sustain costs related to Legal, Consulting and other general expenses.
○ CAP: $ 400.000.
Marketing: 3% dedicated to our marketing campaign.
○ CAP: $ 600.000.
The total number of tokens generated in Ether will be 250.000.000 and will be distributed for:
Public token sale 90% of them: 225.000.000 Ether tokens.
Team members will vest 10%: 25.000.000 Ether tokens.
Given the CAP of $ 20m and the tokens generated for 2.5% of the company, the value per token started
at:
$ 20m/250m tokens = $ 0.08 per Ether token as of November 2017 the price may vary
depending of the increase in value of the Ethereum crypto-currency.
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Pre-Sale
Starting from the pre-sale we will sell our tokens at a special discounted value. Tokens sold during this
phase will be seen as a preferred shares during an IPO, different from common token sold during the
Public ICO. The investors here will have the opportunity to buy a token with power of being exchanged
or redeemed for a real company equity if the token holder will meet criteria.
The price started at $ 0.08 per token as the market price of ETH, and follows the ETH price.
Customers already got the public discount during three tiers: November to December and now we are
applying:
January 1st to March with No Discount
Discounted for professional qualified/accredited investors.
The Pre-Sale will continue until all tokens are all sold if there is low demand or until March 1st.
Discount holders will receive their tokens with discounts applied to the prices determined by March 1st,
2018 at 11:59pm UK time.
How to participate
The pre-sale and sale will happen on the Elpis website. The process will be straight forward:
1. Basic KYC and AML will be required for the transfers
2. Orders will be taken through a transfer of Ethers to a wallet address
3. Ethers will be stored on an escrow
4. Prices will be determined after the end of the Pre-sale
5. Tokens will be distributed after the Pre-sale period starting March 2, 2018.
6. During the sale period, we will process your tokens during orders
Public ICO
During the Public ICO the whole interested audience will have the opportunity to get a real, valuable
token, which has a value as a negotiable instrument that, as gold for old banknotes, has an indirect
counterpart in the equity of our company. It will be, thanks to our partner CapchainX, the first of its
kind. It will give total transparency.
Start of Sale: March 2, 2018 12:00 am UK time.
End of Sale: April 30, 2018 by 11:59pm UK time.
The sale period will start from March 2nd, 2018 until tokens are all purchased. Otherwise, the end of
the sale will be April 30, 2018.
The price has started at $0.08/ token and might vary during the private sale following ETH price. This
price will apply to the remaining tokens from the pre-sale until there are 135m tokens remaining.
Thereafter, the sale price mechanics will take place. Information of the sale mechanics explained below.
Assuming 40% is purchased during the presale, the total supply remaining will be 135,000,000 tokens.
Denomination will be in Ethers. The exchange rate of dollars to ether will be set in the beginning of the
presale period. This value will be publicly available on the ELPIS Website.
Amount above $20,000,000 received will be added into the Elpis fund under Assets under management
(AUM) for investment.
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Token Escrow
All raised funds will be self-forced into dedicated wallets for each activity to be financed by the
company as advertised above on the paragraph “Distribution of the Token” and will not be used
otherwise. Undistributed coins will be returned to the contributors in the event of failure to meet the
minimum target of $ 1.000.000. Part of the CapchainX Terms and Service Elpis adhere to are the
following:
1. Emission of shares of mother company of 2.5% of equity
2. Exchange of redeemed tokens for share certificates
3. Destruction of tokens upon share redemption
This is agreed by the Elpis Board of Directors as a means of an Elpis Board of Director/Shareholder
Agreement to use the CapchainX tokenization platform.
Token Earning Mechanism
After the ICO, the fund successfully raised will become our Digital Assets Under Management
officialized by the registration of the fund and the creation of a prospectus and a regulated fund. Our
profits will give us the opportunity to buy back tokens from our ICO token holders increasing the value
of the Token itself. This activity will be constant and the token holder will be able to get rewards from
their investment on three sides:
The Exchange in real equity of the company if criteria are met,
The Activity of Buying Back tokens by the company with profits from trading,
The opportunity of selling the token to the market.
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Traditional Assets Fundraising: AUM
The asset management industry has been dominated, in an oligopolistic manner, by large banks or
financial institutions for ages. They have collected huge amounts of fees while delivering poor
performance. This has been done on the back of investors, whom are the real risk takers, and it is even
more true in a very low rates environment typical of the last decade. Consequently, they have started
being challenged by trading bots which are very cost effective. Over the years, algorithms will become
smarter and more efficient. They will reduce all these undue expensive management fees down to more
acceptable levels. From a broader perspective, quantitative strategies have gained exponential interests
for the last years. As an example, the graph below shows the growth in assets under management for
systematic strategies called Smart Beta (black plain line), which are strategies of relative low
intelligence, yet exponential interest by traditional investors:
Source: Morningstar, Wells Fargo Investment Institute Global Manager Research, May 2017
Global hedge fund growth has exploded in the past decade.
According to EurekaHedge (2012), global assets under
management ("AUM") in 2003 were $759.3 billion — by
comparison, assuming current Preqin estimates, the worldwide
AUM is $3.197 trillion. There is growing interest on smart beta
Funds and Alternative Investments like Artificial Intelligence
hedge funds is rapidly growing. We see the opportunity of making
an impact also in the traditional market especially thanks to our
value proposition of:
Performance fees only Business Model
Sustainable performance
Low Operational Risk
High Transparency over the investments
High Risk Management
Hybrid and Flexible (Diversified) structures
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Blockchain Auditing and applications
The development of the blockchain technology has the potential to redefine the operations and
economics of the financial services industry as a whole.
Despite significant technological gains in capital markets over the past 20 years, middle- and back-
office functions often remain antiquated, slow and inefficient because of overly complex processes
involving many counterparties, manual tasks and third-party service providers. Assets that trade
electronically in the blink of an eye can still take days to settle. Blockchain-enabled distributed ledgers
could change all of that.
Interest in and funding for this type of financial technology is growing exponentially. An estimated $75
million was invested in blockchain efforts specific to capital markets in 2015, up from $30 million in
2014. By 2019, that figure is expected to reach $400 million. Individual organizations, industry
consortiums and even major central banks are all jumping on board to see what blockchains can do.
And here comes the opportunity of using the blockchain technologies and the cryptocurrencies market
to enhance performances, exploiting short-term growth, with lower costs for higher opportunities.
Blockchain technologies have the power to impact massively the costs for asset managers:
In the context of capital markets, potential benefits include: Faster settlement times that are user-
optimized, lower collateral requirements and counterparty risk, improved contractual term
performances, greater transparency for regulatory reporting, better capital optimization, and security,
protecting against reorganization by one or more participants
Use of Blockchain
Blockchain provides its maximum value in operations, sales & marketing and IT, where on the other
side, it lies the cost for the traditional incumbents. In a market that grows at an average of 300% to
1000% per year, the blockchain can produce massive benefits in terms of cost savings, hence allowing
to keeping fees low and thus increasing the returns for both parties. Moreover, being new technologies
in a market where the usual investors are very often retail customers, blockchain and cryptocurrencies
can also intercept the new growing trend of Retail Investors in asset management that are now flooding
the market of robo-advisors.
Even more importantly, the power of the blockchain is also evident in the most crucial drivers of the
new socio-democratic trend: Security, Transparency, and Stability.
In fact, blockchain can offer key benefits in the regulatory compliance as well as in real-time control
and management over the operations, and more stability and security thanks to the application of the
smart contract technology that Elpis is also going to use, that is the Ethereum Smart Contracts
technology.
We set out a plan for the use of blockchain during these 3 years:
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1. In our first year, we will use blockchain to publicly show every trade to customers and
regulators, and then we will use it to store data of transaction sparing the costs of infrastructures.
We are going to use the blockchain to store every information from our buy/sell operations in
order to publicly audit the company for each transaction; we call it Blockchain Public Auditing
Ledger (BPAL). This technology will increase the degree of confidence in assets information
and thus will increase trust over the system and lower probability of attacks and cyber hacking.
2. We are also using blockchain to increase the level of security and track every investment from
investors’ wallet to our wallet, to better recognize where is the investment coming from, from
which investor, and how much, to better calculate the equity and the rewards.
3. In a third phase, we will use blockchain to open our company for the community of developers
and engineers around the world, associating the profits generated by the models of our
developers to the blockchain. With this innovation we will know exactly who built the
performing model and how much the company gained thanks to it. The reward, as a percentage
of the gain, will come straight to the developer, paid back with our token.
We are going to leverage the blockchain technology to put publicly available every operation we make
and every decision we take, so that we can build a more profitable and open relationship with our clients.
Distributed ledger and blockchain technology fundamentally change how data ara managed, moving
from a scenario where each organization maintains its own copy of a dataset, to one where everyone
has controlled access to a shared copy.
Use of Blockchain for crypto investors
Double-certified transaction contract from Investors’ wallet to Elpis wallet: Every transaction from
investors to Elpis will be certified on the blockchain to recognize precisely what was the money invested
and by whom holds the public ID wallet. With this technique will be easier and safer to track each
investors’ equity in the fund and obviously the rewards/interests coming from trading profits.
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The Market
During the past decade, the asset management industry was mostly occupied with regulatory changes
dictating costly compliance procedures. The increase in the regulatory burden, was mainly felt by small
asset management firms. In addition to increased regulatory costs, fee pressure has had a large impact
on the industry as well. In the coming years we believe these two forces will remain top-of- mind, but
they have different drivers now. Technology has entered the asset management industry. This will add
costs because asset managers have to live up to ever-increasing customer demands regarding
immediacy, connectivity and ubiquity. At the same time, this leads to an increase in fee pressure due
to growing transparency, comparability and competition from non-financial companies. We think the
asset management pie is still growing strongly, but not everyone is invited to take a slice. The asset
management industry is going to change substantially in the coming years. Regulatory and demographic
trends have already had a transformative impact on the sector.
In general, the direction of these two trends is clear and the pace of change is slow. However, the
technology dimension is putting speed into the transformation equation. Customers require immediacy,
connectivity and ubiquity in a simple and transparent service offering from a trusted company.
These requirements are more often being fulfilled by non-traditional players like robo-advisors, who
can guarantee lower fees at similar but always low performance. To incumbents, the control over the
customer relationship is at stake. They will have to make a strategic choice between spending on
technology to offer satisfactory services to their clients, and losing the customer relation to become the
very efficient infrastructure to the newcomers from the technology sector.
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Traditional Asset Management market
Finance has benefited more than other industries from improvements in information technologies. But,
unlike in retail trade for instance, these improvements have not been passed on as lower costs to the end
users of financial services, because in reality these instruments are used below their real capacity. In the
figure below, from Reuters Reports, we see that even though the average expense ratio through the
years has diminished thanks to some efficiency in technologies, also diminished the returns mainly for
low market performance and for charging customers with high management fees.
Asset Managers and Incumbents really did not understand how the new technologies work, although
they understand that their current business model is at risk with the newly arrived FinTech startups.
Asset management services are still expensive, overall performance of the markets are low, exception
made for few emerging markets and banks generate large spreads on deposits. Finance could and should
be much cheaper and technologies could find better performing opportunities. The traditional Asset
Management market lives on low performance and high fees while implied costs of management are
reducing.
Another problem that is more specific to the finance industry is the degree to which incumbents rely on
leverage, which is embedded in many financial contracts and subsidized by several current regulations.
This gives the illusion that leverage is everywhere needed to operate an efficient financial system.
Conceptually, one can think of leverage today as partly a feature and partly a bug. It is a feature, for
instance, when it is needed to provide incentives, but it is a bug when it comes from bad design or
regulatory arbitrage (as in fixed face value money market funds), or when it corresponds to an old
feature that could be replaced by better technology. The issue, of course, is that it is difficult to
distinguish the leverage-bug from the leverage-feature. FinTech startups can therefore help to show
how far technology can go in providing low-leverage solutions with higher returns and less risk.
Page | 19
A paradigm shift within the asset management industry is at hand. Disappointing performance across
both traditional and alternative investment approaches has opened the door for change. The barriers
between traditional asset management and alternative asset management are rapidly blurring.
New products that marry the investment goals of traditional active investment mandates with the trading
strategies utilized by the best alternative managers are emerging, and institutional investors are taking
notice. This innovative hybrid approach seeks to solve the return conundrum created by the low return
environment brought on by years of easy monetary policy globally.
Active long-only asset management has performed poorly
in recent years, rattling investors’ confidence in their
traditional investment approach. The growth of the hedge
fund industry has ‘stolen’ some of the alpha once captured
by active long-only managers. As a result, passive
investments have taken significant market share from
what was once an active-only world. Nonetheless, for
most of 2016, hedge funds and funds of hedge funds have
come into the spotlight as their value proposition of either
better performance or diversified returns is being
challenged. Many managers have failed to deliver the
diversifying or ‘alternative’ performance that they had
asserted was possible.
In addition, clarity surrounding investment mandates, which is key to successfully measuring a
manager’s performance, is currently lacking within the industry, creating an identity crisis. Along with
these structural shifts, most institutional investors are failing to achieve their targeted investment
returns, creating the opportunity for change. One promising innovation will be investment approaches
that integrate hedge fund techniques into more traditional equity or fixed income mandates, thereby
redefining the world of active investing. By utilizing investment strategies heretofore used only in the
alternative arena, investment managers with the vision, skills and infrastructure to implement this
multidisciplinary investment process will be in a position to attract market shares from both the active
and passive segments of the traditional managers. Over the last two decades, a majority of active fixed
income and equity managers have failed to beat their benchmarks.
In the last 10 years alone, the S&P 500 outperformed 85% of all Large-Cap Equity funds, and that lead
widens to over 92% in the last five years. This index outperformance is even more substantial among
fixed income funds, where 96% of actively managed government long-only funds were outperformed
by the Barclays Long Government Index over 10 years and 98% were outperformed in the last five
years. For Investment-Grade Long Funds, even the best timeframe for active funds (one year) shows
that 94% of funds were outperformed by the index, and for High Yield that same time period shows
75% of funds underperformed their index. Meanwhile, since the mid-1990s, the hedge fund industry
has grown rapidly, with AUM increasing by over $2tn. Institutional buyers of alternative strategies are
generally looking to create a mixture of investment exposures that either diversify or leverage exposure
to their traditional benchmarks. Historically, hedge fund investors have been pleased with the
performance of their allocations, but recently many notable managers have seen performance decline,
Page | 20
causing some investors to question their allocation to the asset class. Part of the recent disappointment
comes from an identity crisis created by a lack of specific goals for alternative allocations. There is
uncertainty around whether or not strategies are supposed to diversify risk away from traditional asset
classes, or if they should provide higher performance than these traditional funds. Managers that have
diversified their portfolios are often criticized for failing to beat the market, while those that have sought
higher returns are then faulted for not being diversified and losing money when the markets fall. Again,
clarity in the mandate is essential to understanding whether or not value is being delivered.
We see an opportunity for those alternative investment managers that can successfully create
orthogonal, as opposed to leveraged, returns. These managers can integrate their strategies with those
of more traditional investment approaches. This allows for active hybrid strategies that have both the
market-based exposures pursued by traditional managers in combination with highly diversifying
exposures generally reserved for alternative investments.
Given then all these information and problem, the right question to ask is not why the innovation is
happening only now but more how is it even possible that customers keep leaving their money inside
these institutions?
Maybe, we think, is the problem of fear of not having anything and the lack of “understandable
substitutes”. Yes, it’s true that fintech products are creating more performance with even less costs but
sometimes the greatest performant means are difficult to understand from the everyday investor which
is typically not well informed on the innovation market and technologies. What would they need then
is easy to understand, a simple and intuitive instrument who gives you in few actions a total
understanding of what is going on with advantages, costs, and performance. The investor nowadays
wants more transparency and higher returns and currently the most performing activities nowadays are
made by Fintech Startups, Artificial Intelligence Asset Management and Digital Assets like crypto-
currencies.
One of our alternative investments, the hot topic in the investments landscape right now is the rise of
computer-driven investing in the Crypto Currencies market, which has really explosive opportunities
and much lower costs and higher returns.
Page | 21
Crypto trading
The global community is witnessing the rapid growth and proliferation of a new asset class: digital
assets, also known as cryptocurrencies (such as Bitcoin) or digital tokens (such as Augur). These digital
currencies operate independently of central banks, and use encryption techniques to regulate the
generation of units of currency and to verify the transfer of funds. This asset class benefits from the
security and transparency provided by the blockchain protocol, the protocol that was first introduced by
Bitcoin in 2009.
The blockchain allows for the secure transfer of value across the Internet in a strictly peer-to-peer
system, therefore obviating the need for intermediaries such as central banks and credit card companies.
This asset class had a combined worth of $1bn in 2013. To date, the market cap is over $105bn, and has
doubled over the last year. Projections put this asset class at a combined market cap of over $1 Trillion
by 2020.
Speculative investors are taking
full advantage of this high growth
phase, purchasing and trading
these digital assets on a myriad of
online exchanges. The enthusiasm
for cryptocurrencies keeps
growing with each passing day as
more people venture the space and
latch on to the various digital assets
or currencies available on the
market.
As digital coins proliferate and draw interest from professional investors, though, they become harder
for Wall Street trading desks to ignore. Bitcoin’s price has soared this year, from $969 to more than
$5,000 last month before pulling back. Ethereum, a rival, traded as high as $400 after ending 2016 at
$8. In all, nearly $150 billion of digital currencies are in circulation. With the recent developments of
this market, even great incumbents like Goldman Sachs are looking forward to the opportunity of
investing in this technology as the price of the cryptocurrencies market has now reached the S&P with
even greater expectations of returns.
Although the opportunity is the greatest of this century yet, it is difficult for the everyday investor to
wrap their heads around the high volatility of the prices. The challenges of investing in this market are
increasingly high because are moved by the emotions of the market, hence related to greater risks for
non experienced traders. The Demand for digital assets is characterized as any individual or
organization’s willingness and desire to acquire and/or hold on to a specific digital asset, hence prices
will be what people are willing to pay. How the price changes will depend on many factors, but above
all, future expectations. If the market expects improvements and increased users of cryptocurrencies,
the price is likely to increase. At the same time, there are external factors that affect the price. There is
a strong correlation between Bitcoin and other cryptocurrencies because they all are traded with Bitcoin.
The price can develop in the same direction or opposite to each other. However, because
cryptocurrencies are part of the same market, they usually trend together.
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When all the media start writing about Bitcoin, the big mass notices the cryptocurrency. This increases
the buying pressure, the price increase continues, and the market becomes euphoric but also greedy. A
problem with all-time highs is that there are no support or resistance levels. Technical analysis becomes
more complicated because the price is in uncharted waters. Sooner or later, when the price drops for
some reason, you can expect powerful movements. The market takes the stairs up and the elevator
down. One old saying is “buy the rumor, sell the news.” When the news outlets begin to talk about
something, it’s a red flag on the market. Market psychology is a major part of trading, for this reason
the underlying market is difficult to predict for humans, but not for automatic trading machines. Traders
earn money on volatility and high risk, trading is a risky business which doesn’t fit everyone. It’s
important to understand the risks related with it, especially for this unregulated market. If we compare
the stock market to the crypto market, there are many advantages with the trading of cryptocurrencies:
Lower fees and smaller spreads — Transaction fees are significantly lower or close to zero.
Besides, the price difference between buying and selling is usually less, which reduces the
risk.
Absence of institutions and algo trading — Many institutions and major players in the
financial market are still outside the crypto market. This leads to a fairer and easier market for
trading.
More people with little market experience — Because there are many small savers within
cryptocurrencies, technical analysis works better. Trends and patterns are much easier to
analyze. Individuals without experience make many mistakes on the market.
Highest returns — ROI on a single digital asset long-only is greater than the combined of the
S&P or than any other asset in traditional markets.
Cryptocurrency trading is faster, cheaper and easier but is not easy: it requires expertise, data, and time.
Bitcoin trading never stops, unlike Wall Street it goes on 24/7, 365. So what can an everyday investor
or trader do to increase the efficiency of his portfolio of cryptocurrencies without using the majority of
its time and life? Similar to Wall Street and stock trading, Bitcoin and cryptocurrency trading are a form
of income. Due to the nature of the medium, however, many Bitcoin traders do it as a side project,
focusing their energy on a main job or alternate work.
But, to generate passive — or active — income in these industries, you must be paying attention to the
current market trends and activities. Market shifts happen so fast, you can lose a lot of money if you
don’t act soon enough, or don’t have time to trade when it’s opportune. That’s exactly why automatic
trading through Machine Learning technologies is the next best thing to reduce the inefficiency of the
market, while increasing the total returns over arbitrage opportunities.
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The Product: Elpis Platform
The future is in what we found: using Machine Learning technologies from sorting and classifying
inputs (prices, volatility etc.), to making predictions and estimating probabilities of movements and
outcomes. Automatic Trading makes it possible to make money when the price varies. This is something
that is becoming increasingly popular with cryptocurrencies: Bitcoin is a natural fit for automated
trading. It is growing an army of professional traders using high-speed strategies, deployed by some of
the biggest Wall Street players as they see Bitcoin and cryptocurrencies as a new, exciting ground. The
future is transparent: we will give our customers total access to every information regarding their
portfolio. The future is also made up by innovative services around our shared values of Trust,
Transparency, Efficiency, and Fairness.
Our objective is to build a Fund able to manage both assets and digital assets through Artificial
Intelligence, herby creating a balanced portfolio based on the risk approach of our clients. Our clients
will be able to follow their investments, their portfolio and profits every day. Through the dashboard,
our clients will have direct access to their account info at any time: you will always know where your
money is.
Technology does not have to complicate things, but it has to ease them. Our Artificial Intelligence will
operate in the background, while our customers will be always able to have updates about their portfolio,
their investments and customized news related to the financial market. Here below you can get a
preview of our platform where our clients will be able to check at their investments daily.
Here below a UX of our future dashboard:
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Account Portfolio
Live Performance
Page | 25
Artificial Intelligence Trading
The financial markets are regarded as a leading indicator to the economy and when the markets begin
to contract, the population braces for a slowdown in the economy or possibly a recession. Conversely,
as the markets begin to expand the business cycle shifts and the economy starts to build forward
momentum. Given that the stock market is a leading indicator, making accurate predictions on its
movements becomes a difficult task. The forces that affect stock markets are abundant, highly correlated
and difficult to accurately measure. Given also the large amounts of data available from various sources
and what are potentially very complex relationships to model, the application of Artificial Intelligence
techniques seems to be appropriate. Financial giants such as Goldman Sachs and many of the biggest
hedge funds are all switching on AI-driven systems that can foresee market trends and make trades in
a better way than humans can. It’s been happening, drip by drip, for years now, but a torrent of AI is
about to wash through the industry, and high-earning traders are going to get unceremoniously dumped
like regular workers at a closing factory. AI trading software can suck up enormous amounts of data to
learn about the world and then make predictions about stocks, bonds, commodities and other financial
instruments. The machines can ingest books, tweets, news reports, financial data, earnings numbers,
international monetary policies and regulations, anything that might help the software in understanding
global trends. AI software can keep watching this information all the time, never tiring, always learning
and perfecting its predictions.
A report from Eurekahedge monitored 23 hedge funds utilizing AI and found they outperformed funds
relying on people. Quants, the Ph.D. mathematicians who design fancy statistical models, have been
the darlings of hedge funds for the past decade, yet they rely on crunching historical data to create
models that can anticipate market trends. AI can do that too, but AI can then watch up-to-the-instant
data and learn from it to continually improve its model. In that way, quant models are like a static
medical textbook, while AI learning machines are like a practicing doctor who keeps up with the latest
research. Human traders and hedge fund managers don’t stand a chance, in large part because they’re
human. “Humans have biases and sensitivities, conscious and unconscious," says Babak Hodjat. "It's
well-documented we humans make mistakes. For me, it's scarier to be relying on those human-based
intuitions and justifications than relying on purely what the data and statistics are telling you."
Goldman Sachs shows just how devastating automation can be to traders. In 2000, its U.S. cash equities
trading desk in New York employed 600 traders. Today, that operation has two equity traders, with
machines doing the rest. And this is before the full brunt of AI has come into play at Goldman. “In 10
years, Goldman Sachs will be significantly smaller by headcount than it is today,” Daniel Nadler, CEO
of Kensho, told The New York Times. Expect the same to happen on every trading floor at every major
financial company. The battle will be and already is on acquiring Artificial Intelligence talent:
“Some of these smart people will move into tech startups, or will help develop more AI platforms, or
autonomous cars, or energy technology,” Minevich says. “That could be really helpful right now, since
the tech industry is always fretting that it doesn’t have enough highly skilled pros and might be facing
a geek drought in the age of Trump travel bans. If the MBA elite leave Wall Street but stay in New York,
it might compete with Silicon Valley in tech.”
There is also, one other benefit to AI machines taking over finance. Ben Goertzel, chief scientist at
Aidyia, says his machine will never need human intervention. “If we all die, it would keep trading”.
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Machine Learning Strategies
We have organized and planned the evolution of our technology in different stages. For our first year
of trading, we will use Machine Learning as it is nowadays the best way to have positive returns with
lower risks. The process of Machine Learning is similar to that of data mining. Both systems search
through data to look for patterns. However, instead of extracting data for human comprehension,
Machine Learning uses that information to detect patterns in data and adjust program actions
accordingly through algorithms that are often categorized as being supervised or unsupervised. Machine
Learning can be applied to many aspects of trading: from sorting and classifying inputs (prices,
volatility etc.), to making predictions and estimating probabilities of movements and outcomes.
One of the most common tasks is to fit a “model” to a set of training data, so as to be able to make
reliable predictions on general untrained data. There is the risk of overfitting tough. In overfitting a
statistical model describes random errors or noise instead of the underlying relationships. Overfitting
occurs when a model is excessively complex, such as having too many parameters relative to the number
of observations. A model that has been overfit has a poor predictive performance, as it overreacts to
minor fluctuations in the training data. The possibility of overfitting exists because the criterion used
for training the model is not the same as the criterion used to judge the efficacy of the model. In
particular, a model is typically trained by maximizing its performance on some set of training data.
However, its efficacy is determined not by its performance on the training data but by its ability to
perform well on unseen data. Overfitting occurs when a model begins to “memorize” training data rather
than “learning” how to generalize from trends. As an extreme example, if the number of parameters is
the same as or greater than the number of observations, a simple model or learning process can perfectly
predict the training data simply by memorizing the training data in its entirety, but such a model will
typically fail drastically when making predictions about new or unseen data, since the simple model has
not learned to generalize at all. In dealing with the trading problem, we usually use as inputs data like
changes in prices, volumes, ratios, news feeds and we aim at predicting discrete moves (up, down) with
a probability distribution through Machine Learning.
Swarm Intelligence Portfolio Optimization
An example, when it comes to using
Artificial Intelligence in portfolio
selection, is Swarm Intelligence, which is
a technology that in these cases has been
recently proven effective.
This technology, that takes its name from
nature, uses Artificial Intelligence to
understand and then extract the patterns
of different data sets. Then, it
automatically selects the models, which
are the best fit for that particular pattern.
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Our Track Record
US EQUITIES BACKTEST
Our first model, a backtest in the traditional stock market will be long-only for Insitutional Investors.
As a proof of the efficiency of our technology, the lowest risk model we currently have, with low quality
data and on the basis of the 50 most liquid stock from 2000, and unchanged over the period, has
managed to consistently beat the S&P even in periods of market crash.
This model is only the first one, later we will develop low, mid and high-risk models in US Equities,
Indexes, Futures, and of course crypto-currencies. Ai will allow us to reduce the risk close to zero
while giving constant and consistent returns higher than 15% annually.
FUTURES LIVE
Another application of our AI is on Futures, which is more riskier hence ideal for professional investors
who want to risk more than institutional investors. The team has a profitable, 62.5% ROI, and
demonstrable positive track-record live generated by our automatic algorithms. Here we can share this
year P&L:
The time horizon of the model is strictly intraday, with an average holding period of less than two hours.
The instruments used are liquid futures and options. strategies have been successfully applied on
different markets: US options (Heston-Nandi), Stochastic volatility pricing models, etc.), US stocks
(mean reversion, cointegration based models) and futures on an intraday basis with an average holding
period of less than 20 minutes. These latest strategies are easily convertible for the short term trading
of cryptocurrencies, where we can confidently assess a growth over 100% per year.
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CRYPTO-CURRENCIES BACKTEST (BTC)
In building our btc trading model, we used daily data of different time series (Dollar Index, Gold), so
we did not only use endogenous data. The trading activity consist in buying and closing these long
positions, and short positions are not opened.
As soon as a long position is open, real-time
protection levels are activated; if the price
drops below those levels, the position is closed
immediately.
Using protective real time stops embedded in
the algorithm helps to quantify the amount of
risk that is in line with both the profile and
expectations of our clients; that level could
change as a function of money management
models.
The vast majority of Cryptocurrencies funds use a Buy and Hold strategy, with some minor variation.
The likelihood of further deep corrections is high and there is the need to be protected when that
happens. Here is why we implemented our strategy to decrease the volatility and control the risk.
Elpis will be the first Crypto-Assets Investment Fund to combine the traditional concept of hedge funds
with the latest innovative technologies and a new business model for the asset management business.
We are going to further study and implement these new technologies within these 3 years of operations.
Artificial Intelligence and Blockchain, together, give us the opportunity of revolutionizing traditional
finance with these pillars in mind: Abolition of Management Fees, Total Transparency, Excellent Risk
Management, and Better Performance.
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Marketing
Our innovation and product requires trust. Transparency, Trust and Innovation will be central in our
Marketing operations.
Professional and Institutional investors are used to a “one-way” relationship with their fund, with an
approach that is not user centric. Our Strategy is instead to build a profound and daily relationship with
our clients, a constant relationship aimed at creating trust. Technology can sometimes, in fact, create
boundaries. On the opposite, through our marketing user-centric approach we want to engage clients
throughout a system of values and purposes: we use our technology with the purpose of satisfying our
clients not only in performance excellence, but more importantly in building trust and fairness for both
parties.
Our ultimate goal is to give our clients the opportunity, through our use of technologies, to be more
engaged and to better understand how we are operating with their money. And, above all, that
understand how we are always operating for their own interests first.
Our Marketing strategy can be divided in:
Design approach. Design is for us central to create the first impact with our brand. We want
to keep the design on the same line as our brand, a simple but not simplistic design that is
inspired by some of our core values: efficiency, innovation, and trust.
User Experience. The user experience is also crucial nowadays for any investment entity.
Clients require a better user experience, a better understanding of who is operating with their
money and of how it is done. An efficient user experience creates engagement and when coped
with values and simplicity, it creates a relationship and therefore brand loyalty.
Sales. Sales are a key-stone in this business. Developing a sales network will help us to increase
our Assets Under Management. The implementation of blockchain technologies and smart
contract technologies will also help us to trace back the clients directly to their salesman, in
order to constantly implement bonus programs and a reward system for their work.
Events and Networking. Events and networking are fundamental for every investment
company. We are going to use our budget mainly on the development of our network and in
participating to fintech and financial related events.
Online Marketing. Being a technology-driven startup company, online marketing and
marketing tactics are very important to us in finding different opportunities that our sales and
network cannot reach. We are going to use platforms like LinkedIn and Facebook in
combination with our content marketing strategies on blogs and blogging platforms like
Medium. Our online marketing strategy will be implemented also in order to engage users on
an educational level. We believe that what we are doing is very innovative and requires a
content strategy that has the main purpose of educating and informing.
Our Strategy will allow us to raise finance not only from the ICO but massively also from the High Net
Worth individuals side. Furthermore, being mainly a long-only fund, will make it easier for us to have
access to mutual and pension funds, which will become our main source of Assets Under Management.
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Value Proposition
Our Value Proposition is very clear: the market needs a massive revolution in the business model and
in the approach to its clients. The market needs: Trust, Transparency, Efficiency, Fairness.
Our model respects these values thanks to technology and a user-centric approach. The technologies we
use allow us to keep costs down while increasing performance. Low biases and high accuracy allow us
to Manage the Risk of the market better than the industry standard.
Our model has proven that Artificial Intelligence makes it possible to increase performance while
lowering costs and risks, hence making us able to decrease fees. Our objective is to abolish management
fees by being totally transparent about how we operate thanks to blockchain technologies.
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Competition
Being a very new market, we will be one of the first movers in the space. Soon incumbents will try to
sponsor and invest in new entities: now it is still a blue ocean.
During our market research, we encountered as competitors only a handful of entities that are trying to
do something comparable to what we are doing. We didn’t count as competitors entities like robo-
advisors mainly because their innovation is on the customer experience and not in the actual
performance and technological breakthrough. Here are some of our competitors in terms of the
technologies they use and diversification of investments in the context of the Asset Management
Market:
Elpis will distinguish itself from the competition for its advanced use of technology and the
diversification strategy. We can offer many opportunities managed by Artificial Intelligence. Lowering
risks and creating a constant stream of profits can then open the opportunity to an even larger
diversification.
In the Market of Artificial Intelligence, we have also other competitors such as:
Numer.ai (backed by renaissance technologies)
Euklid (top 50 fintech startups)
Pit.ai
Binatrix
Walnut Algorithms
Our competitive advantages are mainly due to how we approach the market and therefore to how we
use the technology. Strategy is also fundamental: another great competitive advantage would be the
dual side potential of our crypto-assets strategies and the revolutionary image of our fund. We will put,
in fact, a lot of work and focus in the marketing and visual communication of our fund and of our values.
The objective is to use technology with a purpose: therefore, part of our job will be to educate our
customers on the advantages of using our technology.
Diversification
Technology
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SWOT Analysis
Strengths
•Proven and Public Track Record
•Technology
•Marketing and Image
•Vision
• Security for technology and legislations
Weaknesses•A new startup in fintech market from Italy
•Need of a strong board of advisors
• Low capital budget
Opportunities
• Swarm Intelligence
•Crypto-equity ICO
•Decentralized community of developers
•Blockchain and cryptocurrencies
• First movers in Europe
Threats
•Competition from other hedge fund Ai startups
•Market Acceptance for new technologies
Page | 33
Team
Elpis team is made by a mix of expertise, youth, knowledge and audacity, and the common will to
pursue constant innovation to build a successful business model and a revolutionary company. The
project was started by Anatoly Castella and Andrea De Francisci, two young and talented financial
experts with a strong vision: bringing trading and investing out of their traditional, restricted circles,
using the power of ideas and technology to shape a different financial landscape, more open, fair and
efficient. With their fresh approach, solid research and analysis skills, Anatoly and Andrea believe
investing is on the brink of a revolution, a technological revolution that can be shaped only with the
fearless audacity of strong, innovative ideas and the right individuals to work with, somebody ready to
share their strong beliefs and take on the challenge of building from scratch an unseen business model.
Soon after defining the core ideas of the project, when research and development already started to give
it shape, a key piece was added to the Elpis puzzle: Luigi Piva. His involvement and trust in the project’s
promising possibilities, was enthusiastic from its first approach and brought him to engage in its
development, becoming one of Elpis co-founders. Luigi is a successful long-term trader, an
international financial expert and pioneer in the field of algorithmic trading. Founder, CEO and
Investment Manager of Quantlab Limited, Luigi is providing Elpis with his outstanding expertise and
leadership, helping the project to grow and improve each and every day. Luigi’s guidance has already
brought significant results throughout the company’s operations, helping in recruiting new talents. With
Luigi, then, we managed to assemble an amazing team of brilliant engineers that are working
relentlessly to make Elpis vision come to reality.
The Team
- Anatoly Castella, CEO and President
- https://www.linkedin.com/in/anatolycastella/
- Andrea De Francisci, COO and Vice President
- https://www.linkedin.com/in/andreadefrancisci/
- Luigi Piva, Chief Investments Officer
- https://www.linkedin.com/in/luigi-piva-cqf-82b25615/
- Andrea Boi, Design and User Interface
- https://www.linkedin.com/in/andreaboi/
- Giuseppe Solinas, Editor in Chief
- https://www.linkedin.com/in/giuseppesolinas/
- Matteo Bigon, Data Scientist
- https://www.linkedin.com/in/matteobigon/
Samuel Zocchetti, Quant Developer
- https://www.linkedin.com/in/samuel-zocchetti-267106139/
Francesco Alessandrini Gentili, Financial Advisor and Business Developer
- https://www.linkedin.com/in/postadifrancesco/
Employees
The company has already an agreement with 4 talents thanks to the partnership with with Luigi Piva’s
Quantlab UK Ltd. Quantlab was established in 2013 by Luigi Piva, and it has always been a forge of
algorithmic trading strategies that have rigorous quantitative basis.
To be more specific, Luigi and the team develops both econometric and statistical based strategies and
strategies with a strong mathematical orientation.
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The quantitative operational team is currently composed by 5 people:
Quantitative developer & Investment manager: Luigi Piva, Partner of Elpis Investments
Data scientists: they are concerned with the collection and cleaning of the data needed for the
the first phase of the data analysis and for the process of testing and validation of quant models.
Machine Learning and Ai Developers: They are concerned with the realization of the models
in Matlab and the study and implementation of algorithms that will be used by the AI system
to perform in the stock market.
Software Programmers: In coordination with the quantitative developer, the AI team and
getting data from the data scientists, deploy models developed in Matlab in Visual Studio as
we are mainly using C#, they are also working with the quant developer to implement
artificial intelligence elements that are used to make the models most effective.
The team is also completed with our partner:
Mauro Mattei, Chartered Accountant and treasurer of Elpis Holding at BeAdvisors.co.uk
o https://www.linkedin.com/in/mauro-mattei-a37986/
Recruitment program
Phase 1: Company internal recruitment
The company strategy will be focused on recruiting top talents in Ai and surrounding it with a great
network of account managers and sales representatives. Technology and Network are crucial for us.
Phase 2: Decentralized Development with Crowdsourced Employees
With the technology of our token and the blockchain technology we look forward to the opportunity of
creating a decentralized community of developers and engineers to develop for us models to be
implemented in our trading strategies.
These models, will be tested and then used in the market, based on their performance, the creator will
be traced back through the transaction in the blockchain ledger and will be rewarded for his positive
outcome.
This technology is currently used by Numer.ai through Ethereum blockchain with their token, which
doesn’t have a real value if not exchanged. Our token will be a real reward with a real value for the
community, which will have the opportunity to earn with their knowledge leveraging and exploiting
our resources.
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Advisors
Ian Scarffe - https://www.linkedin.com/in/ianscarffe/ - Advisor and Board Member
Manan Mehta - https://www.linkedin.com/in/manan-mehta-5746ab23/ - Advisor and Board
Member
Desmond Marshall - https://www.linkedin.com/in/desmondmarshall/ - Advisor and Board
Member
Simon Cocking - https://www.linkedin.com/in/simon-cocking-20540135/ - Advisor and
Board Member
Beryl Chavez Lee - https://www.linkedin.com/in/beryl-chavez-li-832baa4b/ - Advisor and
Partner
Gabriel Zanko - https://www.linkedin.com/in/gabrielzanko/ - Advisor and Board Member
Darrell Emmanuel - https://www.linkedin.com/in/darrell-emmanuel/ - Advisor
Partners
CapchainX
CapchainX is the next generation Crypto Equity platform to create, manage and
trade equity on the Ethereum blockchain. Benefit from real-time transfers. Save
on fees and the hassle of paper-work. We use cutting edge technology to enhance
efficiency, transparency and liquidity in private markets. Through innovating the
ways private companies create, manage and trade their equity, we aim to improve
access to capital and foster opportunities for growth.
BeAdvisors
BeAdvisors is an international independent firm with offices in London and in
Milan. We committed ourselves to one important principle: being the choice for
international clients facing their most challenging legal issues, business
transactions and tax needs. Our focus on innovation: we are embracing
innovative resources and ways of working to provide the very best combination
of people, processes and technology solutions, to deliver a service that exceeds
evolving client expectations.
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Mission and Milestones
Our mission is to use latest Artificial Intelligence technologies with a purpose: making more profits for
our clients, cutting costs, while offering the total transparency of our operations through the use of
blockchain technologies. We believe strongly in what we are doing, and our vision is to revolutionize
the financial market for the years to come. We are committed to sharing the power of our technologies
to the masses with these main values in mind: Transparency, Trust, Fairness, and Results.
Roadmap
November to March (Pre-Sale ICO) : during this stage we will sell privately our token to professional investors. In the meantime we will:
Develop the final investment models
Buy licenses and hardware Attend Fintech events
March to June (Public ICO) : during this stage we will sell to the public our tokens and we will:
Improve our first models and research for the new ones
Visual Development of the users platform Recruit Artificial Intelligence talent
Develop relationships with our clients and advisors Attend Events and Conferences
June to January 2019 (Post ICO) : During the post ICO we will use the funds to grow our
company and start trading. During this stage we will:
Trading assets raised on Traditional and Crypto Market with AI systems Open the regulated fund
Develop the platform for our users Raise a target of 35m in Assets Under Management
January to July 2019 (Operational Stage) : During the operative stage, we will finally start making profits, also on crypto-currencies by trading the ICO harvested. Also, we will make
improvements to our Artificial Intelligence systems. We will do specifically:
Launch the platform for investors Researching for new model
Swarm Intelligence Planning New Recruitment phase
Trading traditional assets Trading crypto-currencies