Adel ▲ Opinion ▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ Incubator Series

By:  Gabriel Dusil, Co-founder & Board Member, Adel
Jessica Allen, Blockchain Enthusiast & Social Media Expert

A Philosophy for Blockchain Integrity

Given Bitcoin’s meteoric rise, some claim that its underlying technology, blockchain, is ushering in an Internet 2.0. Don Tapscott[1], bestselling author and winner of the 2017 Digital Pioneer Award, remarked, “The first generation brought us the internet of information. The second generation, powered by blockchain, is bringing us the internet of value, a new, distributed platform that can help us reshape the world of business and transform the old order of human affairs for the better.”

Even with blockchain’s potential to improve society, not everyone has its best interest in mind. With many deregulated technologies, including the internet, both the corrupt and complaint manage to find a way to profit within the same sandbox. It is for this reason that regulators have needed to play catch-up to blockchain initiatives and cryptocurrencies[2]. The intention is to close gaping holes where criminals are passing with impunity. Once laws are in full force, blockchain service providers will need to seriously consider compliance tactics. This may alienate blockchain liberalists who stubbornly oppose centralized control. But alignment to legislation will also attract mainstream investors who want the confidence and assurance that their investments will be kept safe.

Blockchain’s first application, Bitcoin, was occasionally tainted by nefarious actors who harmed its reputation. Unfortunately, the media perceived Bitcoin as harmful to communities. Now that the blockchain technology has been researched by many financial institutions, there is a common interest to redefine the blockchain brand in a positive light. Integrity in the development, release, and use of new blockchain-based software is of the utmost importance. And both the media and the public should be educated on its benefits.

To create integrity, there are three regulatory considerations for cryptocurrency services in 2017:

  1. Know Your Customer (KYC)
  2. Anti-Money Laundering (AML)
  3. Counter-Terrorism Financing (CTF)

Blockchain projects till now had not been subject to such strict requirements. Nor did governments have the regulations in place to enforce these policies. As a result, projects were shut down and investors left empty handed[3] , the most notable being BitInstant[4] and Mt. Gox[5], both of whom contributed to tarnishing the blockchain brand.


Figure #1: Adel Ecosystem Limited’s Commitment to AML4 compliance

Crypto investors are quickly learning acronyms like KYC, AML, and CTF. 2017 is the year of significant regulatory change. This is namely due to Directive (EU) 2015/849, informally known as the 4th Anti-Money Laundering directive (Figure #1), or AML4[6] which will be implemented on June 26, 2017[7]. To meet compliance requirements, crypto services must follow detailed auditing and compliance procedures, or risk closure due to regulatory violations.

Adel co-founder Gabriel Dusil says: “Our responsibility is to protect the blockchain brand. We think this is just as important as protecting our own. The foundation from which we built Adel is regulatory compliance and the desire to incubate long-term sustainable businesses. This legitimacy opens our doors to mainstream investors. It’s not just about legitimizing the crypto community as an investment vehicle. It’s about creating innovative projects that will change the world. This alone has the potential to solidify the integrity of the blockchain brand.”

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

Jessica Allen

Jessica is a blockchain enthusiast and social media community expert with over 25 years of technology and 15 years of digital marketing experience.  As a mother of two, Jess is passionate about blockchain’s potential to innovate industries, unite communities and create a sustainable global economy.  She brings the ability to create conversations with anyone, at any level, about blockchain use cases and potential.  Jess is active on social media @TheJessAllen and volunteers her time with the Isha Foundation to help share the benefits of yoga and meditation as fundamental tools for human transformation.

References

[1] http://dontapscott.com/

[2] http://www.bvdinfo.com/en-gb/blog/compliance-and-due-diligence/what-you-need-to-know-about-aml4, http://www.telegraph.co.uk/business/2017/04/16/regulating-bitcoin-new-frameworks-could-catalyst-cryptocurrencies/ https://coinlexit.wordpress.com/2016/07/06/bitcoin-aml-proposal-of-the-european-commission/

[3] http://www.coindesk.com/70-bitcoin-scams-shut-new-york-law-enforcement/

[4] http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1?international=true&r=US&IR=T

[5] https://en.wikipedia.org/wiki/Mt._Gox

[6] https://www.bvdinfo.com/en-gb/blog/compliance-and-due-diligence/what-you-need-to-know-about-aml4

[7] http://www.bvdinfo.com/en-gb/blog/compliance-and-due-diligence/what-you-need-to-know-about-aml4

Adel ▲ Opinion ▲ 8 ▲ Blockchain Incubation to Employment

▲ Incubator Series

By:  Gabriel Dusil, Co-founder & Board Member, Adel
Jessica Allen, Blockchain Enthusiast & Social Media Expert

Blockchain Incubation to Employment

Building a strong ecosystem for startup incubation starts with a foundation of integrity, diversity, and collaboration. A philosophy of integrity satisfies the authorities while attracting mainstream players with the capital to bootstrap project development. A collaborative environment is formed to attract talented individuals who are motivated to work together and create viable products. This framework retains talent and rewards their expertise.

The computing age and the internet have enabled new technologies thanks to the passion and commitment of volunteers. Linux has been a big success in the open-source arena with a 66% market share in web-based servers and 99.79% in supercomputers[1]. The SourceForge[2] repository showcases over 430,000 open source projects. Decentralized development has fuelled many of these projects, including blockchain technology.

Decentralized code development provides a framework for fast and efficient project execution. Traditional approaches to project management and leadership still need to be maintained. Hard-working developers have the motivation to succeed, while at the same time enjoy flexibility in their schedule and workspace. When an ecosystem has a whole community that works together, each participant has a devoted motivation for their project to grow from infancy to maturity and ideally sustainability.

Blockchain incubator, Adel Ecosystem, Ltd. is revolutionizing the blockchain incubation process by offering employment opportunities to community members. By having members participate in idea development through to project execution, each participant has a vested interest in ensuring success. They have a personal and financial interest in that growth. The unsung benefit becomes the vast employment opportunities for members across multiple projects. In addition, knowledge and lessons learned on one project can then be utilized in future initiatives. Systematic business planning creates its own efficiencies.

A collaborative environment for blockchain incubation offers its members a central platform from which to incubate ideas. Funding options need the flexibility to accommodate both a wider consensus and a narrow one. There needs to be a pool of experts who know how to build businesses, mitigate weaknesses, and maximize revenue potential. Furthermore, the open nature of blockchain requires transparency in various activities of the community, such as voting, key performance metrics (KPIs) of projects, and collaboration.


Figure #1: Passion + Expertise + Capital = Success

Adel co-founder, Gabriel Dusil comments, “We think that employment is a unique benefit of our ecosystem. The members have a vested interest in wanting their projects to be successful. It’s their baby. They invested their hearts, minds and money into the initiative. We feel this is the magic formula behind what we are creating.”

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

Jessica Allen

Jessica is a blockchain enthusiast and social media community expert with over 25 years of technology and 15 years of digital marketing experience.  As a mother of two, Jess is passionate about blockchain’s potential to innovate industries, unite communities and create a sustainable global economy.  She brings the ability to create conversations with anyone, at any level, about blockchain use cases and potential.  Jess is active on social media @TheJessAllen and volunteers her time with the Isha Foundation to help share the benefits of yoga and meditation as fundamental tools for human transformation.

References

[1] https://en.wikipedia.org/wiki/Usage_share_of_operating_systems

[2] https://en.wikipedia.org/wiki/SourceForge

Adel ▲ Opinion ▲ 7 ▲ Blockchain Portfolio Diversification

▲ Incubator Series

By:  Gabriel Dusil, Co-founder & Board Member, Adel
Jessica Allen, Blockchain Enthusiast & Social Media Expert

Blockchain Portfolio Diversification

For a blockchain ecosystem to thrive, it must create a sustainable platform to develop, market and deploy projects across a variety of industries. Investment portfolios have their ups and downs. All industries experience the same cycle, and not all projects will enjoy the same level of success. It benefits an organization to incubate a diverse set of revenue-generating projects. This strategy is adopted from tried and true fund management. Sustainability is when there is a positive return on the collective portfolio.

Success is also maximized when participants of the business plan, as well as their project execution, are diversified inexperience. Each contributor provides unique expertise during business planning and project execution. Expertise conflict is replaced with collaboration because there is no shortage of experience needed to create a diverse and profitable portfolio. Steady returns are better managed when there is a variety of industries with revenue-generating assets and products.

In the early days of blockchain, development teams focused on one product. When key members left that project, the entire initiative was in jeopardy. In a volunteer-based “future benefit” culture, loyalty is not on salary, it’s in ideology. In the fast-growing world of blockchain, loyalty can now be remunerated with money. This leaves single-focused projects vulnerable to the same HR challenges of churn and shortage of qualified mission-aligned talent. When a blockchain ecosystem intentionally creates a diversified portfolio, it mitigates and manages around market cycles and HR challenges.

Blockchain incubator, Adel Ecosystems, Ltd., is banking on the power of a diversified portfolio (Figure #1). They intend to create an environment which leverages business resources across a diversity of projects while building a structure to attract and retain top talent by offering participation and ownership in a variety of projects. This offers a unique advantage of keeping a qualified team busy in an environment with an assortment of talent and a mixture of backgrounds.


Figure #1: Blockchain Projects Portfolio Diversification

As blockchain expands into different verticals, the potential impact and productivity savings are significant. Before a project can be successful, a solid business plan is needed to construct its foundations. Even before the business planning stage, ideas need to be discussed, debated, and refined. These efforts are ineffective in isolation and resource-heavy for projects developed in silos.

A blockchain ecosystem with a diverse portfolio improves its productivity throughout the roller coaster of project life cycles. Knowledge and experience carries forward to each new project and creates an opportunity to repurpose new ideas by contributing to already launched projects, improves the overall portfolio Return on Investment (ROI), and increases the number of technology use cases for faster feedback and improvement. For example, if a team creates the world’s greatest login protocol, it’s used only for that one purpose. In a collaborative diversified ecosystem, that protocol can be integrated into every project, providing a compounding ROI over time. Cross-selling and upselling projects throughout the community need to be part of the core strategy, or competitors will realize its potential and do the same.

The co-founders of Adel recognized the need for a blockchain incubator to bring collaboration to a very disparate blockchain community. Adel has set out to create a strong platform that fuels a diverse set of ideas, retains talent and attracts venture capitalists interested in cutting-edge technology.

Adel has created a unique platform to attract and retain those with the expertise to create business plans and turn them into viable projects. Processes in Adel’s ecosystem have been established to submit ideas for review and community discussion. A voting and collaboration module will help refine ideas and develop business plans. Their community portal will also have a project module to showcase bi-weekly updates, including Key Performance Indicators (KPIs). The basis of this ecosystem creates synergy between people, process and technology. The liquidity of the Adelphoi coin on external exchanges also enables new members to join the community and bring new perspectives and insights.

Adel co-founder, Gabriel Dusil says: “There is an exploding interest in blockchain technology. Thousands of proof-of-concepts span multiple industries. Blockchain is being tested in government, fin-tech, healthcare, Internet of things, and ICT (Information Communication Technology. The next few years will determine where blockchain is most practical. We want Adel to be viewed as the go-to brand that accelerates ideas into successful projects.”

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

Jessica Allen

Jessica is a blockchain enthusiast and social media community expert with over 25 years of technology and 15 years of digital marketing experience.  As a mother of two, Jess is passionate about blockchain’s potential to innovate industries, unite communities and create a sustainable global economy.  She brings the ability to create conversations with anyone, at any level, about blockchain use cases and potential.  Jess is active on social media @TheJessAllen and volunteers her time with the Isha Foundation to help share the benefits of yoga and meditation as fundamental tools for human transformation.

Adel ▲ Opinion ▲ 6 ▲ Blockchain Startup Expertise

▲ Incubator Series

By:  Gabriel Dusil, Co-founder & Board Member, Adel
Jessica Allen, Blockchain Enthusiast & Social Media Expert

Blockchain Startup Expertise

With most new technologies, it’s rare that mainstream investors dive in and take risks with the unfamiliar and untested. Organized crime, on the other hand, will invest in cutting-edge technologies to drive their initiatives, just like any legitimate business. Criminals use the internet, mobile phones[1], encryption technology, instant messaging, and social media. But none of these technologies have sustained a bad reputation like Bitcoin.

From its launch in 2009, bad press has littered headlines involving Bitcoin, partially due to the Silk Road marketplace[2], the Darknet[3], and other platforms that maintain their anonymity, finance terrorism, traffic drugs and allow them to launder money. During this period, investment capital in blockchain was a mere 93 Million US$ in blockchain investments[4] according to CB Insights[5].

From 2014 to early 2016, VC funding increased tenfold to over 993 million US$. A report by FinTech Global[6] shows 2016 alone closing with half a billion US$ in funding. Within this figure, non-finance related blockchain projects increased by 325% compared to 2015, confirming that blockchain is more than just a FinTech phenomenon. Despite healthy growth, Bitcoin continues to have a negative reputation to some. What is needed to grow venture capital funding to $5 billion, $50 billion and beyond? One approach led by the blockchain incubator, Adel Ecosystem, Ltd.[7], has been to establish standard business practices to attract mainstream investors and business experts. Their vision is to develop projects with a commitment to a philosophy of integrity and regulatory compliance.

Despite the bad press, Bitcoin has established a niche success. Creating this market presence was inspired by a vision of a stateless and decentralized currency. Similar to how Skype disrupted international calling revenue and Facebook and Twitter uprooted journalism the notion of decentralizing money hadn’t been considered until Satoshi Nakamoto’s white paper in 2008. Until this point money was considered authoritarian, not to be challenged. Bitcoin continues to be a contentious issue for governments and banks. But those same institutions recognize the value of blockchain as a technology.

However, blockchain is far from mainstream success. Its relative newness, combined with scams, hacks, anonymity, and legalities, prevent blockchain and cryptocurrencies from becoming a “household” technology. Angel and VC funding communities currently view blockchain as too complex and volatile to be considered a viable investment vehicle.

To pull blockchain out of the Darknet stigma, an era of integrity is required. According to Market and Markets[8], blockchain technology will be worth 2.3 billion US$ by 2021 and is expected to grow at a Compounded Annual Growth Rate (CAGR) of 61.5 percent. It is the collective responsibility of Adel to change the perception of blockchain and cryptocurrency and to legitimize this technology by creating ethical, moral, and legal platforms. Ethics and compliance will fuel a wave of mainstream investors entering the crypto industry and establish confidence with serious investors. Besides regulatory oversight, this responsibility lies in equal measure with blockchain service providers. Sustainable and profitable services, in the long term, establish confidence with the mainstream investment community.

Figure #1: Idea to Business Plan to Projects – Life Cycle

 

Co-founder and board member, Gabriel Dusil added, “At Adel, we set out to create a powerful blockchain ecosystem with a spirit of integrity. Our aim is to have passionate and talented members who have a collective goal to be successful. Our approach to achieving this goal is through a platform that incentivizes the contribution of ideas, converts those ideas into business plans, and launches profitable projects.”

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

Jessica Allen

Jessica is a blockchain enthusiast and social media community expert with over 25 years of technology and 15 years of digital marketing experience.  As a mother of two, Jess is passionate about blockchain’s potential to innovate industries, unite communities and create a sustainable global economy.  She brings the ability to create conversations with anyone, at any level, about blockchain use cases and potential.  Jess is active on social media @TheJessAllen and volunteers her time with the Isha Foundation to help share the benefits of yoga and meditation as fundamental tools for human transformation.

References

[1] https://en.wikipedia.org/wiki/Organized_crime#Pre-nineteenth_century

[2] https://en.wikipedia.org/wiki/Silk_Road_(marketplace

[3] https://en.wikipedia.org/wiki/Darknet

[4] https://www.cbinsights.com/research-blockchain-transcript

[5] https://www.cbinsights.com/

[6] http://fintech.global/blockchain-cryptocurrency-startups-hit-record-funding-in-2016

[7] www.adelphoi.io

[8] http://www.marketsandmarkets.com/Market-Reports/blockchain-technology-market-90100890.html

Adel ▲ Opinion ▲ 2 ▲ The Next Evolution in Funding Innovation

The Next Evolution
in Funding Innovation

▲ Fintech Series

By:          Dalibor Cerny, Finance Lawyer, Crypto Enthusiast
Gabriel Dusil, Co-founder & Board Member, Adel

Abstract

This article is the second part of a Financial Technology series[1], discussing funding and organizational structures of new digital companies and blockchain[2] ventures. This is the second article following, “The Right Path to Funding Decentralized Organizations”, where we explored the dynamics of financing startups and new entrepreneurship.

An Ecosystem of Participation

Initial coin offerings (ICOs)[3] are a very popular way for ventures to raise funds for their endeavors. Digital companies are developing novel ways of governance as existing models become dated and need to be modernized. A new enterprise called Adel[4] is a refreshing example of how blockchain is being combined with traditional venture capital seed funding while exposing the challenges and controversial topics in the FinTech evolution.

In this new decentralized community model, Adel created an environment whereby experts, investors, and future employees can co-exist based on their participation in its ecosystem. This is instigated by a less regulated and very user-friendly ICO. Several ICOs have used existing cryptocurrency protocols to create cryptocurrency tokens. The most notable are blockchains such as Nxt,[5] Counterparty, Bitshares, or Mastercoin (now Omnicoin). One advantage of an ICO, compared to traditional Initial public offerings (IPO), is that it is done outside of heavy regulation and oversight.[6] Compared to modern funding models such as crowdfunding, ICOs are executed without an intermediary. A growing number of digital technology startups are raising cash this way, by creating and selling their own cryptocurrency tokens and bypassing the need for banks or venture capital firms.[7]

ICOs represent a new way of funding because people can invest their money very flexibly from all corners of the world. Participants of the ICO are investing in the future of the company and in the anticipated success of the solutions, they are developing. Contributors to the ICO help to raise awareness in their respective communities. The investors are also motivated by the speculative growth of the cryptocurrency token market price as early buyers. They also provide early liquidity for the cryptocurrency tokens when trading starts. Once funding is completed, the cryptocurrency tokens are listed on cryptocurrency exchanges such as Poloniex[8] to trade against other cryptocurrencies. This allows the participants to immediately trade their tokens based on the speculative movement of the token’s market value. In some cases, this can result in lucrative short-term gains. The token’s price is a reflection of the ICO’s overall vision, market sentiment, project news, and momentum regarding the ideas of project flow, innovation, and future revenue potential. Some well-known cryptocurrency tokens that were developed through an ICO are NXT, Mastercoin, Bitshares, Ethereum, Maidsafecoin, NEM, Synereo, Factom, DigixDAO, Lisk, Waves and others.[9] What can be a potential disadvantage of ICOs is that most of them are not regulated or registered with any government organization and there is usually no investor protection (other than those built into the given platform itself). Also, cryptocurrency tokens have no legal meaning and do not represent an asset in many government jurisdictions. This is why ICOs can be currently deployed since digital currencies are not considered securities.[10]

Adel understands that their funding model needs to have a regulatory safety net, similar to traditional financing. They are the first decentralized organization launching an ICO that will be compliant with Anti-Money Laundering (AML), Counter-Terrorism Financing (CTF) rules[11] and related Know Your Customer (KYC).[12] This is a logical move because cryptocurrency exchanges using bitcoin are becoming subject to AML/CTF/KYC rules and some have voluntarily implemented similar procedures. Adel’s compliance with KYC will likely omit a segment of the market of bitcoin liberalists who will not give up their identity. On the other hand, that may not be such an issue because the threat of not having AML/CTF/KYC today is having the fund shut down by regulators due to non-compliance.

A New Type of Company

Adel’s organizational structure consists of two major parts. First of all, is membership. Stakeholders of ADL are invited to join the Adel community after the ICO, following a minimum investment of 1 bitcoin (BTC). Membership allows the participant to exercise their right to collaborate and vote on projects based on the amount of Adelphoi coins they hold in their account. Second is an established service company called Adel Ecosystem Ltd.,[13] which oversees the rules of the community and AML/CTF rules to meet regulatory requirements. Adel Ecosystem’s advisory and expertise umbrellas offer services such as research and development, a project review committee, marketing services, a legal and accounting team, a business development team, and a board of directors.[14] Adel will retain a 15 % stake from the ICO for these services and will also own 30 % of the projects launched in the ecosystem.

From an organizational perspective, Adel combines the best of both worlds:  regulatory, legal and ethical compliance, together with an innovative governance structure. Unlike The DAO or similar models (as explained in our previous article of this series), Adel is not governed by smart contracts.[15] Day-to-day decision making maintains a “human element”, rather than computer code. Given the fact that smart contracts are still a concept yet to be proven resilient in the real world, this is definitely a safer solution for the time being.[16]

The role of stakeholders in the Adel ecosystem will consist of collaborating on idea development, participation in business planning, and voting on new projects that emerge from the ecosystem. Through democratic voting, stakeholders will be able to influence which projects will be deployed. Because Adel will be community-driven, stakeholders will have the opportunity to raise the necessary capital for projects. Once deployed, the stakeholder can then follow the project’s progress, or even get the opportunity to participate actively as an expert.

Compare Adel’s decentralized and self-sustaining community to the role of employees in a traditional corporation. The negative aspects of corporate life are significantly attenuated. Would discrimination exist on the same scale it does today if organizations were decentralized? Would people be treated unfairly? Would you spend time working on something that didn’t interest you, or continue to sit in an office just to prove you were at work? Would the notion of climbing the corporate ladder be as important? Would projects continue to be disrupted or derailed due to personal agendas and insecurities?

Adel’s project decisions reside at the membership level. Every project is submitted to a community vote. This process revolves around a social networking engine where good ideas can become a community project if a majority rules in its favor. But even if this is not the case, then the project can survive with a minority vote. In such a case, it becomes a group project. This process is democratic, transparent, and flexible enough to function properly. A necessary prerequisite is a complete access to all information relevant to projects. This level of transparency is not provided to shareholders in traditional corporations. Disclosure of information in these companies is purposefully challenging. For example, sensitive information probably requires a formal written request or is limited to shareholders on a need-to-know basis.

Shareholders of traditional securities are granted shares in exchange for money paid to the corporation for holding that equity. They may meet annually at the corporation’s annual meeting and receive quarterly statements on their performance. In Adel, project performance is reflected in an online “Project Dashboard” which shows the performance of investments on a weekly or bi-weekly basis. Members of the Adel community not only get a stake in projects through a future token called the Adelshare (ADS), but will also participate in the creation and execution of projects. So Adel members have an emotionally vested interest in its success because they’ve participated in the project’s growth from infancy to adulthood.

Traditional companies are mostly based on a structure where the board of directors oversees the officers of the company and ensures operations follow corporate mandates and legal procedures. Directors have, among other duties, a fiduciary duty to act in the corporation’s best interest, as opposed to their own. These duties are in place to protect the shareholders’ investments. Adel’s board of directors has documented a similar function.

Distributions of profits (dividends) in traditional companies are usually made through proportional amounts per shareholder. The proposal to distribute profits is made by the corporation’s board of directors. The board can decide to either distribute the profits to shareholders or to keep profits in the corporation as working capital or to fund a new endeavor. Adel will distribute its profits in a similar manner. This is contingent on establishing Adel’s second entity after its ICO called Adel Ltd., which will have a fund license to enable its members to buy Adelshares (ADS) in projects. Dividends to members will then be distributed in the Adelphoi (ADL) currency.

The protection of intellectual property within the Adel ecosystem is not the same as in a traditional company, mainly due to its transparency. Social media and the internet has largely done away with the notion of secrecy anyway, as evidenced by WikiLeaks, government monitoring, and Facebook’s and Google’s ongoing correlation of user behavior. Adel realizes the difficulty of balancing transparency with confidentiality and has stated their interest in withholding secret information that may be critical to a project’s success. This is mainly positioned to protect both stakeholders in the community and the rights of the projects’ authors (referred to as Innovators, in the Adel ecosystem).

Projects in Adel’s community will assume different forms, based on whether the Innovator of ideas wants to keep a portion of the equity or to release it as a community project. This approach is meant to ensure that innovative projects continue to be launched while minimizing the risk of copycats.

The Future

Whatever becomes of Adel’s final structure, it is important to emphasize that the world of cryptocurrencies and ICOs is still a Wild West when viewed from the perspective of traditional financial vehicles. It is strongly advised before taking part in any investment of such nature to do your due diligence on a given ICO and on the people running it.[17] There are risks involved and the possibilities of being scammed are well documented.[18]

There are also grey areas where regulators still need to catch up. Blockchain startups need to have a proper legal structure for an investor to fall back on in the case of trouble. However, the same reasons why this space is so risky also make it so attractive. Innovative projects are being created using untested structures and technologies, which may either evolve into something marvelous or won’t make it out of the starting gate. The choice is up to the investor whether to be a part of the blockchain movement, but informed decisions should always be made. Participants are given an opportunity to enter a playground of high innovation, clever minds, and the creation of cutting-edge projects that may positively change the world. To say you were a part of it from the beginning has its own prestige.

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Dalibor Cerny

Dalibor is an (alternative) finance lawyer, crypto enthusiast, and Vipassana meditation practitioner. He has roots in Prague, Czech Republic, where he obtained his PhD. in Private International Law and International Trade Law. He also studied Master of Law (LL.M) in San Francisco, California, and International exchange program at Bucerius Law School in Hamburg, Germany. In his professional life, Dalibor is focusing on banking, finance (including alternative finance, crowdfunding, cryptocurrencies and fin-tech), capital markets, insurance, reinsurance, and international trade law. He worked as an attorney and in-house legal counsel for global financial institutions such as AXA and European Investment Bank.

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

References

[1] This article targets a broad audience without getting too deep into technical, economical or legal jargon. The reason for this approach is to explain the latest activities in fintech in the most accessible way possible, without getting lost in all the technicalities. The authors assume that the general public struggles to keep pace with technical, legal and social media developments and that it is challenging for individuals to orient themselves in the jungle of media overload, fake news, scams and annoying trolls.

[2] A very basic visual introduction to the concepts behind a blockchain: https://www.youtube.com/watch?v=_160oMzblY8&t=143s

[3] http://www.investopedia.com/terms/i/initial-coin-offering-ico.asp

[4] https://www.adelphoi.io/

[5] Adel’s cryptocurrency tokens will be created on top of the NXT protocol.

[6] More detailed example here: https://www.thebalance.com/cryptocurrencies-are-changing-capital-raising-process-for-new-companies-4115445

[7] What Initial Coin Offerings are and why VC firms care: https://hbr.org/2017/03/what-initial-coin-offerings-are-and-why-vc-firms-care

[8] https://poloniex.com/

[9] You can find all existing cryptocurrency tokens and their market valuation here: https://coinmarketcap.com/

[10] However, this view may change fairly quickly: https://www.americanbanker.com/news/are-crypto-tokens-securities-by-another-name

[11] http://www.investopedia.com/terms/a/aml.asp

[12] https://bitcointalk.org/index.php?topic=454795.0

[13] Adel establishes LLC in the Isle of Man: http://www.fintech.finance/01-news/adel-establishes-llc-in-the-isle-of-man/

[14] For more detail: https://www.adelphoi.io/content/pdf/wp_3.pdf

[15] A beginner’s guide to smart contracts: https://blockgeeks.com/guides/smart-contracts/

[16] Smart contracts are not smart by nature: https://www.finextra.com/blogposting/12569/smart-contracts-are-not-smart-by-nature

[17] These resources can help with your due diligence: http://startupmanagement.org/2017/03/13/the-ultimate-list-of-ico-resources-18-websites-that-track-initial-cryptocurrency-offerings/

[18] How not to be scammed by an initial coin offering: https://blockgeeks.com/how-not-to-be-scammed-by-a-initial-coin-offering/

Adel ▲ Opinion ▲ 1 ▲ The Right Path to Funding Decentralized Organizations

The Right Path to Funding Decentralized Organizations

▲ Fintech Series

By:  Dalibor Cerny, Finance Lawyer, Crypto Enthusiast Gabriel Dusil, Co-founder & Board Member, Adel

Abstract

Financial Technology (Fintech) is one of the fastest developing industries of our time. This article is the first in a series of two articles that explore the dynamics of financing startups and new entrepreneurship, especially in the FinTech sector.[1] New company structures are emerging with very innovative features. Recent examples, along with their innovative investment structures, are reflected in startup funding campaigns that use a technology called blockchain.[2] A new enterprise called Adel[3] is a refreshing example of how blockchain is being combined with traditional venture capital seed funding while exposing the challenges and controversial topics apparent in the FinTech evolution. In part two of this series, “The Next Evolution in Funding Innovation” we will discuss funding and organizational structures of new digital companies and blockchain ventures.

The DAO

Before getting to FinTech challenges, let’s begin with a bit of history. Nearly a year ago, the first major decentralized autonomous organization (DAO),[4] called simply The DAO[5], was launched on the Ethereum[6] blockchain platform. The excitement was so high it created the biggest crowdfunding[7] campaign of all time, raising over USD 150 million (Figure 1).[8] The idea behind The DAO and recent successors[9] was to create a decentralized organization using a tool called smart contracts.[10] These allow for automatic governance and day-to-day decision making using computer code without having traditional human intervention and classical corporate structures in place.

Figure 1: ICOs, Crowd Funds Raised, since 2012[11]

The DAO wanted to offer complete transparency, total stakeholder control, unprecedented flexibility, and autonomous governance. Power would reside in the hands of its stakeholders. These stakeholders would also establish the general direction and mission of the organization and would be democratically voted to reach a consensus on important decisions. In this lies the element of decentralization – there is no central body or authority to exercise the decision making throughout the life of the organization. In theory, this should operate more efficiently than a normal company due to the lack of corporate hierarchy, politics, and bureaucracy, creating obstacles and delays. From this seemingly straightforward setup comes the benefit of lower operational costs and little room for corruption. However, The DAO is already a chapter in the history of blockchain. This ambitious project met its demise almost immediately after its initial coin offering (ICO)[12] when over USD 50 million disappeared from The DAO’s funds. The eventual fallout caused, among other things, a split of the second most popular cryptocurrency token[13] called Ether.[14] This was caused by a successful hack of The DAO exploiting a weakness in their code.[15] Although The DAO ended up in scandal and disappointment, the FinTech community definitely didn’t give up on decentralized organizations. Quite the contrary, new projects soon emerged. A number of blockchain incubators came onto the scene throughout 2016 (Figure 1).[16] One notable project, Adel, was announced on December 2016 on this very idea of a decentralized ecosystem with a global reach, centered around active social networking of its members. In fact, Adel was in development for five months when The DAO’s funding began. Their project will commence funding on May 1st, 2017, using the same vehicle as The DAO called an initial coin offering (ICO). The ICO’s purpose is to purchase their Adelphoi (ADL) coin (a cryptocurrency token), which will be used to make transactions within the community. In the future, when their fund vehicle is established, ADL will be used to purchase equity in blockchain projects.

Taking the Right Path

Adel is a platform whose main goal is to develop solutions for implementing blockchain – the heavily discussed technology behind bitcoin. It must be emphasized that there are many use cases exploring the possibility of blockchain, but most of them have not made it past the proof of concept (PoC) stage. Nevertheless, there are indications that the next five years will lay the groundwork for the implementation of this technology across various vertical industries. Blockchain projects will eventually move from PoC to production and cutting-edge solutions will prove their usefulness. Still, the idea of a blockchain incubator is not really the most interesting aspect of Adel. What is most intriguing about Adel is that it shows the potential of the next evolution in how companies may be structured. Adel is potentially a window into the future of how organizations will evolve from the perspective of funding, corporate governance, collaboration, and the meaning behind their existence. When The DAO imploded, many questions arose about the legality of their funding because the process happened in a completely unregulated arena.[17] While startups and governments around the globe are trying to figure out the basic rules of crowdfunding,[18] the crypto community is already funding its new ventures through cryptocurrency tokens. It is clear that regulators have not kept pace with developments in FinTech and digital currencies. What is prudent with Adel is that they do not try to appear overly “disruptive”.[19] In FinTech, this word has symbolized the destruction of established players with up-and-comers. However, these new players rarely end up replacing existing solutions. What typically happens is a fusion of the old with the new.[20] So disruption is sensitively positioned by Adel as an opportunity, rather than a threat. As in nature itself, FinTech must also evolve. It is important to continually innovate and implement new technologies, but what’s more important is to ensure that solutions can be integrated into the fabric of an institution’s political, economic, social and technological infrastructure. The core message is not to disrupt, but to improve efficiency and lower costs. In other words, even if disruption is inevitable, it is not the main goal. Technology seems to evolve with a natural cadence. But from an enterprise perspective, systems are not positioned for aggressive leaps forward. We cannot expect companies to abandon their traditional ways and jump into self-governing DAO-like organizations where funds are unregulated.[21] There is also the human aspect to changes in technology, whereby many managers see new technologies like blockchain as a threat to their corporate existence. They will fight to keep any disruptive technology out of their company for fear of losing their title or position. Finally, there is the cultural aspect. Implementing new technology requires a review of a company’s culture to determine the propensity to change by the staff, and how attempting to implement a new solution may affect the outcome. We agree that old systems may be slow, inflexible, or out of date. But their biggest advantage is reliability. The 150-year-old electrical grid at 220V 50Hz/120V 60Hz might be completely redesigned if it were rethought with today’s requirements. Same goes for the Internet – TCP/IP is well known to be an inefficient protocol, but it works! Incumbent systems have gone through long periods of stress testing and tweaking. The upheaval of legal regulation in banking and traditional financing is a testament to the industry’s wiliness to evolve. It can be argued that we already live in over-regulation and tight governmental control. But that does not change the fact that legacy infrastructures have been tried and tested for decades and are backed by the most powerful entities on the planet: state governments. Human nature is about improving and progressing. We should not forget that just a few years ago, Airbnb or Kickstarter didn’t exist. Now they are household words. The same vantage point can be given to blockchain, except we are many years ahead of this technology from being woven into our daily lives. Adel´s approach lies in the fact that they utilize the best from both worlds – the old and the new.

▲ Adel ▲ Opinions

If you liked this article and would like to read more in this series, then check them out here:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

▲ 15 ▲ The Crypto Uprising

▲ 16 ▲ Blockchain’s Disruption in 2020 & Beyond

About the Authors

Dalibor Cerny

Dalibor is an (alternative) finance lawyer, crypto enthusiast, and Vipassana meditation practitioner. He has roots in Prague, Czech Republic, where he obtained his PhD. in Private International Law and International Trade Law. He also studied Master of Law (LL.M) in San Francisco, California, and International exchange program at Bucerius Law School in Hamburg, Germany. In his professional life, Dalibor is focusing on banking, finance (including alternative finance, crowdfunding, cryptocurrencies and fin-tech), capital markets, insurance, reinsurance, and international trade law. He worked as an attorney and in-house legal counsel for global financial institutions such as AXA and European Investment Bank.

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

References

[1] This article targets a broad audience without getting too deep into technical, economical or legal jargon. The reason for this approach is to explain the latest activities in fintech in the most accessible way possible, without getting lost in all the technicalities. The authors assume that the general public struggles to keep pace with technical, legal and social media developments and that it is challenging for individuals to orient themselves in the jungle of media overload, fake news, scams and annoying trolls. [2] A very basic visual introduction to the concepts behind a blockchain: https://www.youtube.com/watch?v=_160oMzblY8&t=143s [3] https://www.adelphoi.io/ [4] https://en.wikipedia.org/wiki/Decentralized_autonomous_organization [5] http://www.investopedia.com/articles/insights/051616/why-dao-ethereum-revolutionary.asp [6] https://www.ethereum.org/ [7] What is crowdfunding? https://www.fundable.com/learn/resources/guides/crowdfunding-guide/what-is-crowdfunding [8] https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfunding_projects [9] For example SuperDAO: http://www.superdao.io/#Superdao-nav [10] A beginner’s guide to smart contracts: https://blockgeeks.com/guides/smart-contracts/ [11] https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfunding_projects [12] http://www.investopedia.com/terms/i/initial-coin-offering-ico.asp [13] A gentle introduction to digital tokens: https://bitsonblocks.net/2015/09/28/a-gentle-introduction-to-digital-tokens/ [14] http://www.coindesk.com/ethereum-classic-explained-blockchain/ [15] http://www.coindesk.com/understanding-dao-hack-journalists/ [16] https://letstalkpayments.com/11-blockchain-focused-startup-incubators-as-unconventional-as-the-technology-2/ [17] http://www.livebitcoinnews.com/cryptocurrency-icos-remain-gray-area-legality-concerned/ [18] For example EC on identifying market and regulatory obstacles to crowdfunding in the EU: https://ec.europa.eu/info/tender/identifying-market-and-regulatory-obstacles-cross-border-development-crowdfunding-eu_en or approval of crowdfunding legislation in Australia: https://www.crowdfundinsider.com/2017/03/97541-fintech-australia-welcomes-approval-crowdfunding-legislation/ [19] What disruption really means: https://www.tonyrobbins.com/career-business/what-disruption-really-means/ [20] Example of such: http://spectrum.ieee.org/tech-talk/computing/networks/enterprise-ethereum-alliance-launches [21] More on this thought: https://techcrunch.com/2016/05/16/the-tao-of-the-dao-or-how-the-autonomous-corporation-is-already-here/

Adel ▲ Motion Graphics ▲ Infographics

Adel has released its third motion graphic video, showcasing a selection of our infographics. We have also published several white papers on our website outlining our vision for a community-based incubator for blockchain innovation. Join our Initial Coin Offering (ICO) on the 1st of May 2017, and participate in the creation and ownership of cutting-edge blockchain solutions that will change the world.

Checkout our website at www.adelphoi.io, and our other videos in the “Why Us” section.

 

Home - Signature, Gabriel Dusil ('12, shadow, teal)

Gabriel Dusil
Co-Founder & Board member, Adel

Adel Motion Graphics

▲ Story

▲ Launch

▲ Infographics

Adel ▲ Motion Graphics ▲ Launch

adel-get-your-adelphoi

We’re proud to release our second motion graphic video, introducing Adel to potential investors in advance of our Initial Coin Offering (ICO), launching on May 1st, 2017. We are also showcasing this video on our website, adelphoi.io, in the “Why Us” section. Also check out our white papers and our first announced project: P2P ATM.

Home - Signature, Gabriel Dusil ('12, shadow, teal)

Gabriel Dusil
Co-Founder & Board member, Adel

Adel Motion Graphics

▲ Story

▲ Launch

▲ Infographics