I am trying to get my head around the following: When I buy the BLX token on the ICONOMI platform I can then transfer them to my own MEW. So all good, I control the BLX token. But the actual, underlying coins (BTC, ETH, BCC etc) that BLX then buys on my behalf remain with ICONOMI. Correct so far?
So my question is: If - for whatever reason - there is a problem with ICOMINI (hack, dev run-off, fake news, legal etc) and the platform shuts down, I will not be able to sell my BLX back to them and my entire investment will be lost. Yes, BLX are being traded on an exchange, but that wont help in this case at all, as the BLX token is really only a promise that ICONOMI will buy back your tokens and then give you BTC or ETH for it. And if ICONOMI cannot or will not be able to buy my BLX back, the BLX token is literally worthless.
Is that correct or am I missing something here?
So my question is: If - for whatever reason - there is a problem with ICOMINI (hack, dev run-off, fake news, legal etc) and the platform shuts down, I will not be able to sell my BLX back to them and my entire investment will be lost. Yes, BLX are being traded on an exchange, but that wont help in this case at all, as the BLX token is really only a promise that ICONOMI will buy back your tokens and then give you BTC or ETH for it. And if ICONOMI cannot or will not be able to buy my BLX back, the BLX token is literally worthless.
Is that correct or am I missing something here?
The idea behind fund tokens is just to make them tradeable on exchanges. Securitywise you have to rely on their insured multi-layer cold wallet architecture. Storing fund tokens in your own wallet doesn´t make any sense. So your asumption is correct
That's what I thought/ feared, thanks for clarifying this :-(
They were for instance affected by the recent Parity hack - and only saved because a white Hat hacker saved them, else they would have lost 13 million dollar. This goes against basic cryptocurrency 101 to have full control over your own coins and not to entrust a third party...
The Iconomi platform had nothing to do with the hack, it was money from the company that was held in a smart contract. Exactly what you would do if the system would be decentralized. You could even argue that if they had not used a decentralized solution (parity) and a centralized cold wallet instead, it would have been way more secure.
I understand the "crypto 101" argument, but decentralization isn´t the holy grale of everything especially while the crypto world is in early stages of development and things like locking up your money accidentally is possible.
Sure, I agree with your points, and of course I do value the convenience and ease to own a DAA rather than invest in the underlying assets myself. So I guess the risk is the price you have to pay for the convenience.
Since you seem to be very knowledgeable on ICONOMI, may I ask you (or any other user here who has an opinion) another question on a related yet different topic:
I am trying to understand the real (!) difference between a DAA like BLX and the C20 token from Crypto20. I understand for instance:
- Crypto20 tokens are limited to the ones distributed during their ICO
- Management fee is higher for most DAAs (BLX for instance 3% vs. C20 0,5%)
- No exit fee at C20 (as opposed to 0,5% for BLX)
- The entry fee is much higher for C20 (roughly 23% vs 0% for BLX)
- The underlying assets are a bit different of course
However, the end results seems to be very similar - I get to own a diverse portfolio of assets by owning just one token. Is any one of these significantly better than the other, or does it come down to preference and my trust in either platform?