Hong Coin

First Venture Fund on Blockchain

http://hongcoin.org

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Questions from the failure of DAODAO, an experiment on Ethereum, failed not only the concept, but the practice.

“Algorithms are really dumb, and people are really smart. If a human designs an algorithm, then there’s going to be a human that’s really good at designing a way out of that algorithm to steal funds. That’s exactly what happened with [The DAO].” Charles Hoskinson, Co-founder, Ethereum

“Computing force alone can’t solve the world’s problems.” Shyam Sankar, Director, Palantir Technologies

Why DAO was so sweethearted, and then disgraced so quickly?

VisionA cryptocurrency can be part of our real life, by being coded into smart devices, and linked to business operations and even social good.

However, man and machine should well collaborate, to best perform the advantages of each, instead of surrendering to each other. Our society would not adopt cryptocurrency unless they feel it is secure and ease-of-use.

We believe the future cryptocurrency will be fueling the whole connected society and linking distributed elements together. Decentralized Organization (DO) will be also unavoidable.

The Need for An Investment Vehicle on Blockchain Cryptocurrency, so far, is still an outlier to social life, mostly running as a gambling tool for digital punks.

We see the future world empowered by cryptocurrency. A venture fund based on cryptocurrency to fuel products around the world can support and realize the crypto currency's real value as a borderless financial tool.

Blockchain as a Smart Ledger“No, Ethereum is not a world computer… ”, Isaac Mao

Copyright, RICHARD GENDAL BROWN

Early Thoughts

A Venture Fund Not Only Smart Professional Management to guardian in whole lifecycle of the fund

Open screening and voting to select best projects to invest

Continuous close mentoring and management over portfolios

Lean startup methodologies to grow each project and risks control

Various exit strategies to assure the maximized return to investors

Secure Transparent

Democracy Agile

Man-Machine Teaming Model

Distribute & borderless shareholders

Collect intelligence from crowdwithout closed chamber

24*7 Monitoring and executingkey business decisions

Regulate fund security

Communicating

Decision Making

Supervising

Fine Tuning

Propelling

Hong Coin: DO + Human Agility“Human does human works, machine does machine works!”

Fund on blockchain

Global coverage from day one

Decision made by crowd

Monitored by community

Managed by professionals

Lean methodology to projects

The Symbol Ħ

August 13th, 2016

Initial Coin OfferingEth/ 100 Ħ

0.9

1.2

0.8

100M 200M 300M400M 500M

1.11.0

Blockchain

Contract Takes Effect after ICO

Kickoff(fiscal_year)

Harvest

Refund

Freeze

Vote

Community

Vote

MB

Fund on Blockchain

Sequences in MMT

Token Creation

Initialize Management Team

Design and development Contract Deployment

GovernanceInvest and daily management

Ideas and white paper

Screening and voting

Harvesting Return distribution

New season

Coin contract wallet

Coin Creation contract

HTH

HTH

HTH

issueTokens()

abort()

bounty()

Uint MB_reserved;

Token Creationcreator

Governance Model

Coin contractwallet

Management fee

Investment wallet

Return pool

Projects

HTH

HTH

HTHDistribute

Exit

invest

Governance Contract

Kickoff(fiscalyear)

Harvest()

vote

Invest(barrels)

Layer one: Token CreationSet with token_symbol (Ħ) and token_name (Hongcoin, or short as

HON)

Totally 2 Million of total tokens will be created and reserved as bounty

Two mode of token issuing in general:Time-shutter (with a closing date)

Quantity-shutter (with a target quantity)

Anytime before total_token reached the target_supply investors can do refund

Layer 2: DO governance (Fund Management)Once fund ICO finished, community will vote Kickoff(0) called by

management body(MB) once it reaches ICO target

First time kickoff(0)

Wallet_Return will be created the same time

Wallet_Investment will be created

Every kickoff() in new fiscal year, management fee account(Wallet_mgt) will receive 2% of total_fund(in Ether), until fund was freezed, or last_fiscal_year.

Layer 2: DO governance (Investment)Other projects-related voting can be happened in online community,

instead of on pricy blockchain, Each HTH will have the voting weight equals to their tokens amount

Once community vote “yes” to a project, MB will conduct series of due-diligence works and invest()

Every invested project will receive (1, n) of barrels of fund

One barrel equals to 1,000 Eth

There will be hectic ground legal documents proceeded by MB with invested project

Every project exit will go to Wallet_ReturnProject return will be converted back to Eth by management body in different ways

Layer 2: DO governance (Harvest)Harvest() should be voted to triggerer as well then write to contract.

It should be only effective after the 3rd fiscal year. Once it’s approved, the fund investment will be freezed.

The total_return of fund will be distributed to HTH based on their token amount(including management_token)

In case total_return < 125% of total_fund(in comparable price, e.g. to USD???), management_token holders will not be distributed as part of accountability

Secured by the blockchain-based contract, human will start to play more active role in daily operation...

Management BodyLinked to a ground business in Hong Kong

Communication with project teams/community

Investment opportunity sourcing

Portfolio management

Real world currency exchange for fund injection

Legal contracts and paper works based on jurisdiction

MVP methodology to propel project to deliver

Life Cycle (3+1)

Year 1Smaller, wide-spanned & diversified

Year 2Incremental & focuses

Year 3Mid-, late stage

Year 4Exit and trade(no investment)

Kickoff (fiscal_year) by CommunityThe first kickoff will call community to vote to commence the fund’s investment process. With every kickoff, the fund will allocate 2% management fee to the management body to operate in the coming new fiscal year.

The fourth kickoff will vote for the fund to cease investment and start harvesting process.

FY1 FY2 FY3 FY4

Investment Areas (Suggested by MB)

Future Tech: Which means disruptive, innovative, sometimes even hypes

Creative Works: We will support artists and creators, to make brilliant works.

Educations: We believe education tools and service can be both profitable and enjoyable like Minecraft

Future Tech Creative Works Educations

Investment PrinciplesLean team, and diversified background

Open and open source

Resource sharing and synergy between portfolios

Community Tools

Fully online presentation

Screening

Debating

Voting

Due Diligence Executed by MB

Result reported to community

Community review and voting

InvestMinimum measurement unit: Barrel

Set milestones and targets for each milestone

Progressive investment injection based on milestone achievement

1 Barrel = 1000 Eth (2016)

Project #101: Create a new solar panel for Ethiopia

Description:

Hongcoin investment: 3 BarrelsLifecycle : 18 months

Portfolio ManagementMilestone tracking

Ground mentoring

Reporting to community

MVP Method Focus on delivering product with enough features to gather validated learning about the product and its continued development.

Fund HarvestingOK, time to reward all investors (HTH)

Also reward the management team for their hard working and strived to make the fund value-added.

Initial Fund

Return FundMMT(4yrs)

Legal considerationsFund and community is borderless, yet considerable amount of local effort is expected

Local regulations under different jurisdictions

Legal binded relationship between the fund and project team

Venture Capital 3.0Venture Capital 1.0 (KPMG)

Big LPs

Fixed fund size/investment stage, region, and close chamber

Venture Capital 2.0 (500 Startups, YCombinator, HAX)

Middle-sized LPs

Multiple, high speed projects

Incubation + Acceleration + Resource sharing

Cross several regions based on value chain

Venture Capital 3.0

Capital on blockchain, fully transparent to crowd investors

Cross-region, global projects

Invest in super creative ideas

Resource flow between teams

Let’s code and Run with Humanity

http://hongcoin.org http://github.com/hongcoin/DO

DAO v.s HONG

DAO Fund

Hong Coin Ħ