SwissBorg is a Switzerland-based decentralized cryptofinance ecosystem where the services are executed by an algorithm, thus avoiding bureaucracy and potential corruption. The financial crisis in the United States has shown the limits of centralized banks that have almost destroyed the global financial system partly due to an unbalanced loan system. As wealth managers were unable to change strategies or save their clients' funds, Bitcoin matured in the following years.
Decentralized financial management would have therefore been a huge step in the right direction, but there was still no sophisticated wealth management service in the cryptosphere. SwissBorg was born.
Their goal is to create a democratic, decentralized and professional financial ecosystem to manage a cryptographic asset portfolio. We interviewed Cyrus Fazel, co-founder of this promising Fintech startup that has just completed its ICO.
If some terms used in this article are unknown to you, see our article => Fintech: a glossary to understand the world of blockchain and crypto-currencies
The main idea of the SwissBorg project is to combine a wealth management platform and blockchain technology, optimize it through the smart contract technology, and transform it by the blockchain philosophy. This is a platform managed by a community.
We offer crypto asset portfolios, we manage crypto funds, we will offer payment solutions and later, cryptocurrency exchange solutions to purchase and sell different cryptos.
We are 15 people based in Switzerland, Tokyo and Toronto. We just finished the ICO and reached our "hard cap", which is quite rare. We raised the equivalent of CHF 50 million in cryptocurrencies and Swiss francs.
Like many people in the team, I started working in wealth management. We all have backgrounds in banking, fund management and investment banking. Three years ago I left my job in a hedge fund. Anthony Lesoismier (the co-founder) and I started talking about designing a robo-advisor project and thinking about how we could set up a platform to make available tailor-made funds based on their risk profile. A much more intelligent robo-advisor, driven by algorithms that would optimize everything as a portfolio management. Today robo-advisors only rent, but do not go further. We started this business and we noticed at the end of 2016 that Ethereum, through the Blockchain and its protocol, could both invest in it, and especially to design investment vehicles. We had the problem that every time we wanted to develop a new investment portfolio, we had to either create a fund or make a weighting. Developing a business on it was too complicated. We realized that the Blockchain technology really made it possible to develop tailored mandates; it would not only be an asset, but this technology could really revolutionize our industry.
Then we realized that an ICO could allow us to raise funds much more easily. The technology was incredible and the philosophy really conveyed what we wanted to do from the beginning, ie to build a community. A the end of February 2017, we decided to launch an ICO, and it took a lot of time.
Today it represents more than 30,000 people all over the world. There are individuals, Blockchain companies, family offices, investment funds and a bank. We do not have a typical profile. Our involvement is the same if the investment mandate represents a dime or a billion. Smart contracts make it possible to optimize everything and do everything at a lower cost.
If I want to create a new investment fund, I do not need to meet a negotiation consultant, or an administrator, to sign a lot of papers and meet the exit brokers. We need none of the previous, we just have to take our rating on GitHub (note: Social Network around web and techno development). We code in open source and we only need to copy/paste and smart contracts are ready. We do not need to choose whether to go for BtoB or BtoC, today we can reach everyone. Our ICO shows it well. A person has invested $4 and a bank $5 million. And they had the same deal. We may imagine one will earn more in the long term than the other. But Swissborg is really for everyone.
The Blockchain makes it possible to make transactions and to democratize the processes. What is greatand increasingly interesting, is that it is done by and for the community. As an example, for our ICO, we created a token that people can buy. Called CHSB (CH for Switzerland and SB for SwissBorg), it allows our community to take part in referendums, that we will organize every two to three months on our various projects, technology or otherwise. People owning tokens will be able to participate and will be paid. This is the best way to create a community based on meritocracy. Every individual who contributes to the platform is paid and obviously the access is democratic.
We have allocated CHF 700,000 in direct and indirect bounties (bonuses). In other words, there are over a million tokens that have been distributed to people who helped us. If you helped us in the past working on a logo, writing an article, sharing content on social networks, we give you free tokens. That's where it helps you to vote because you can participate only if your wallet is credited with CHSB token.
The most important thing in an ICO is to succeed in creating a community. And for that, you have to find a problem in the blockchain community. Contrary to what we may hear like "I have a restaurant, I will make an ICO", it involves people who are in the Blockchain. As long as you cannnot "tokenize" or "decentralize" this movement, it is useless. Everyone who invests in crypto is crypto. There are more and more communities, but these are people who want to get involved to make their lives better. They can write a whitepaper, similar to a thesis, in which a problem is raised. Then we send it to the community which approves the interest of the project or not.
We were lucky enough that people liked our idea. From then on, we engaged a lot with the community through social media (Telegram, GitHub), we published articles everywhere and made videos. We traveled the world to meet the public, and interact at meet-ups in Geneva, Lausanne, Paris, London, Seoul, Tokyo, Hong Kong. It was very important, because even if some people like to be behind their computer, some other love meeting face to face. This is how we started collaborating with a lot of people.
We had a spike at the beginning of the ICO and then we witnessed an evolution of the participations from January 1st, with more than CHF 35 million amassed in 5/6 days. We optimized the site based on results to improve conversions. By observing the data, we were able to maximize targeting and results. This shows a great team success and it's really important because it is such a big work and investment.
There is also a decisive level about personal feelings and financial behavior in ICOs. In other words: the perception of the project, who will lead it, how it will be done and who will participate. It became pure madness when we finished 24 hours in advance and there were people calling me crying they were not able to participate. But they would be able to buy – at a higher price though - on the release day.
I will not give any advice, but in general, I think there are 6 trends to keep in mind:
1. The project and the issue raised. How tokenization and decentralization can make this project work.
2. The market cap and the distribution of tokens: How many tokens there are, how the allocation is divided between the team and the participants and for how much (the market cap).
3. The team: check if there is diversity, with a technological and a business team. In general, it is very difficult to find both at the same time.
4. The whitepaper: check the quality of the content, if the issue raised is understandable, where the writers want to go and where they come from.
5. The partners and advisors: who the backers and advisors are, if they already have links with other DAOs.
6. Visibility and social media: check if the Githubs are filled, people’s reaction, the number of contributors and interest on Telegram, Facebook, YouTube, events participation, presence in the press.
The future for Swissborg is to have all the licenses that will allow us to distribute our different products and services in each country in Europe, Japan and Switzerland. There is therefore a very important legal part where we need to be sure that regulators like FINMA like us. Then, we will be able to enter the distribution phase, recruit people in Toronto, Zurich and Japan. Later on, our goal will be to offer services to both crypto people (onchain) and people who are not part of it (offchain) in family offices, banks ... And everyone will have adapted services. For family offices and banks, for example, we will create a traditional crypto background. For onchain people, we can have investment strategies directly through smart contracts.
We are doing the KYC / AML (anti-money laundering), the newer customer money lendering of our community. We hope that all people pass.
Since February 1st, we are listed on various exchanges (including HitBTC and livecoin) where people can sell or buy their CHSB tokens.
We are specialized with blockchain companies. We still have not communicated it, but we partnered with Fuze for the payment. They offer an incredible map. Technologically, these are very strong people who have, among other things, created Apple Pay NFC technology. This card allows payments between crypto and FIAT (Swiss francs and others). We will also partner with the Swiss fintech SmartLink. We have other partnerships that we've already talked about, for example: ETHlend, BountyOx, ZeropointX. We connected because we are exactly in the same state of mind.
We are in the process of creating a Swiss association called the Decentralized Autonomous Organization Association (DAOA) whose goal is to have all CAD like us central. We want to create a lot of partnerships between different fintech blockchain to help on legal, technological and marketing matters and to assist the regulators by informing them.
After meeting most market authorities like FINMA, we realized that no one is against the blockchain because they are well aware of the potential. However, they do not want bad behavior. So we really want to educate and support people so that we can self regulate the market, if we detect misbehavior.
Unfortunately, I believe that Fintech in Switzerland isn't easy, especially when raising funds. I think Business Angels invested CHF 25 million last year in Switzerland, which is half of our ICO. There are very strong Fintech in Switzerland, but it is not as easy as in England for example.
However, if crypto and Blockchain grow well in Switzerland, it is because the technology is "Switzerland". And why is the Blockchain "Switzerland"? Because it's the only country really decentralized like the Blockchain. This is the only country that has been a free threshold for 2 or 3 centuries. Switzerland legalized digital financial contracts a few years ago (indirectly smart contracts), it has always had a peer-to-peer relationship, a referendum system similar to ours. In the end, how could Switzerland not say yes to the Blockchain? Zug has been a very smart canton for example. And they quickly replaced hedge funds with crypto and accepted Ethereum.
In a few words, SwissBorg is a project with a promising future that democratizes access to cryptocurrencies by relying on a committed community. To learn more, visit the site and the blog.