COINSILIUM GROUP LIMITED
("Coinsilium" or the "Company")
Coinsilium: Strategic Business Review
Coinsilium hones in on burgeoning DeFi and Crypto Finance markets
London, UK, 13 July 2020 - Coinsilium Group Limited (AQSE:COIN) the blockchain technology venture builder, is pleased to announce that further to its announcement of 8 July, a Strategic Business Review (the "Review") of the Company's operations and equity investments is now underway.
The objective of this Review is:
- to align the Company in readiness for its participation within the recently announced IOV Joint Venture (JV)
- to ensure that the Company is optimally positioned and resourced to capitalise on new and substantial opportunities in the burgeoning Decentralised Finance (DeFi) and Crypto Finance sector, including the development of products, solutions and services in Crypto Lending, Crypto Staking and Stable Assets, both from within the scope of its joint venture with IOV and also from Coinsilium's operational base in Gibraltar, which is fast becoming a pre-eminent global regulatory jurisdiction for innovative financial technology, including cryptocurrencies.
The global Crypto Finance market is showing strong month-on-month growth with active collateral on DeFi platforms now in excess of USD2.1Bn.
The Company is working on several DeFi models with the aim of launching commercial solutions either independently or through its partner network.
Coinsilium has also commenced income generating staking operations using its crypto reserves as active collateral, therefore utilising existing internal resources to accelerate and enhance new revenue generation.
Staking activities are expected to increase over the coming months as the Company looks to develop further in-house expertise to expand its operational capabilities.
As part of the process of general business restructuring, and in line with the ongoing Review, Coinsilium's investment holding company Seedcoin Limited has been redomiciled from the BVI to Gibraltar in preparation for a proposed transaction.
Strategic Business Review
On 8 July the Company announced the execution of a Joint Venture Agreement (JVA) with IOV Labs Limited (IOV) which represents a transformational event for Coinsilium and presents the Company with a unique commercial opportunity to create value for shareholders in joining forces with IOV and its extensive global partner network at the forefront of the global DeFi and blockchain mainstream adoption drive.
At the same time the market is also seeing unprecedented levels of interest and growth within the DeFi and Crypto Finance space which is now emerging as a key driver for the blockchain and cryptocurrency sector as a whole.
Management believes that the scale of the IOV JV opportunity, combined with a resurgent DeFi and Crypto Finance market, presents an unprecedented opportunity for Coinsilium and its shareholders going forward.
The Company has therefore commenced a Strategic Business Review process covering the Company's existing operational activities and equity investment portfolio to pave the way for the Company to transition from an investor in early-stage start-ups to a focused Blockchain, DeFi and Crypto Finance venture operator.
DeFi, Crypto Financing and Staking
One of the leading trends this year in the world of cryptocurrencies and blockchain is the growing traction of Decentralised Finance (DeFi) applications.
DeFi is a space of active innovation fostering a growing number of crypto finance platforms and products combining crypto assets as stake, collateral, derivatives, and yield-generating tokens. The increasing number and adoption of stablecoins, pegged to and collateralised by fiat (government-issued) currencies or cryptocurrencies also contributes to innovation in the space.
As of 8 July, the total value of active collateral on DeFi platforms was in excess of USD2.1Bn according to Defipulse.com. This trend is widely expected to accelerate with the launch this year of the first phase of 'Ethereum 2.0' undertaking the transition from a Proof-of-Work to a Proof-of-Stake consensus algorithm of the Ethereum blockchain.
A recent study by PwC and Elwood, the '2020 Crypto Hedge Fund Report', shows that 42% of the crypto funds who were analysed for the report are staking cryptocurrencies. Staking is an alternative model to 'Mining' and is designed to support the security and operations of 'Proof of Stake' blockchain networks.
There are now a growing number of Staking-as-a-Service operators and delegates that perform the technical work of validating transactions. Participants can earn revenues by lending or staking their crypto assets to the blockchain nodes which in turn validates the transactions.
Participants need to have a minimum amount of holdings in whichever cryptocurrency runs the network in which they are taking part. Staking involves committing or delegating coins to third parties to validate transactions on Proof-of-Stake blockchains.
Whilst these holdings are staked they cannot be touched, thereby lowering the circulating supply and creating scarcity. This has the dual benefit of securing the network whilst creating the underlying conditions for the participant's crypto assets to potentially increase in value. In exchange for committing their coins to secure the blockchain, participants earn 'coded income' in the blockchain cryptocurrency.
DeFi protocols often describe this type of income using the umbrella term 'passive income'. In a recent thought-leadership article by Coinsilium's CEO, Eddy Travia, he discusses the significance of the emerging Decentralised Finance marketplace and suggests a new term for these revenues as 'coded income'. The full article can be read here:
Coinsilium to move into DeFi, Crypto Financing and Staking
Whilst the DeFi and Crypto Finance sector is growing rapidly it is still in its early stages of maturity. Coinsilium is therefore ideally positioned to enter the market at this crucial formative stage, by joining forces with its global partner network, including IOV Labs and Money on Chain, to develop Bitcoin-based DeFi solutions and Coinsilium's 'Coded Income Model' as well as solutions for other emerging segmental markets such as Crypto micro-lending; all of which are designed to connect the crypto economy with the real economy.
The Company is currently working on several DeFi models with the aim of launching commercial solutions either independently or through its partner network. Given the current pace of growth in the sector the company believes that such solutions have the potential to generate meaningful revenue streams for Coinsilium. Further updates will be provided to the market in due course with details of progress and developments.
Partnering with IOV Labs and RSK Technology
Most of the DeFi platforms currently utilise the Ethereum blockchain, however, Bitcoin-based DeFi solutions are now burgeoning with Coinsilium partner company IOV Labs its most active proponent, facilitating the development of several DeFi solutions for Bitcoin using RSK technology.
Solutions built on the RSK blockchain to date include the Money on Chain platforms. In December 2019, the first Money on Chain platform launched 'Dollar on Chain' (DOC), a stablecoin collateralised by RBTC, the native token of the RSK Live Mainnet which is pegged 1:1 to Bitcoin.
In April 2020, Money on Chain launched the Rif on Chain DeFi platform, the first RIF DeFi ecosystem built and deployed on the RSK blockchain network. Money on Chain recently announced the launch of TEX, a Decentralized Token Exchange based on the London Gold Fix method.
Coinsilium's Equity Investment Portfolio
The immediate scrutiny of the Review will be with respect to the Company's existing equity investment portfolio and its activities as an investor and accelerator of early stage blockchain start-ups.
Given that going forward the main focus will be on projects developing solutions utilising RSK technology and RIF solutions, the Directors consider that the timing is opportune for preparing for exits from Coinsilium's legacy equity investment portfolio.
The initial stage of this process has now commenced and in this respect the Company is pleased to announce that it has formally completed the re-domiciliation of its 100% owned equity investment subsidiary, Seedcoin Limited, from BVI to Gibraltar, a recognised blockchain technology industry hub, where Coinsilium is now operationally based.
The intention is to realise value from Seedcoin Limited in the near term by way of a transaction, liquidity event or outright sale.
Initial early stage discussions with certain interested parties are ongoing and whilst there can be no guarantee that these discussions will lead to a value accretive transaction, it is the Company's view that, given the substantial progress made by certain companies amongst Coinsilium investments, the Seedcoin portfolio holds materially greater value than is currently recognised by the market.
Further updates on any material developments will be provided to the market in a timely fashion.
Staking and Crypto Assets Treasury Management
The Company currently holds a proportion of its treasury funds allocated in cryptocurrencies, (predominantly Bitcoin, Ethereum and RIF tokens) and has recently started to stake a proportion of this to generate income using various models with varying risk profiles.
At this initial stage, it is utilising a proportion of its vesting RIF token allocation via Money on Chain's RIF on Chain platform. Further details regarding Money on Chain platforms can be found here
The Company will look to extend its staking activities over the coming months and also to develop further in-house expertise to manage its digital assets and take advantage of various other income generating opportunities available in the Crypto Finance market.
The Company intends to provide regular updates to the market on its staking activities and details of further developments in this respect will also be announced in due course.
Coinsilium DeFi and Crypto Finance launch.
The Review process will be conducted over the coming months followed by the repositioning of the Company's operating model along with renewed corporate branding and a website relaunch.
Coinsilium Chief Executive Eddy Travia commented: "We have been closely monitoring the growth of DeFi and Crypto Finance for some time and it is clear to us that the sector is still in its very early stages; with massive inflows of capital anticipated into these platforms and financial products over the next few years.
We see the convergence of negative interest rates, the aftermath of economic crises, the emergence of central bank digital currencies and the overall political instability as a catalyst for institutional and individual investors' interest in Crypto Finance, given the significant returns achievable and the fluidity of these financial products.
We therefore want Coinsilium to be ready to take full advantage of this inflow of funds and interest in this new wave of financial products and to create value for our shareholders by being an active builder and participant in this specific sector of the blockchain and cryptocurrency space.
We believe that we have the right experience, jurisdiction (Gibraltar's reputable blockchain ecosystem), network and access to the most suitable technical and commercial partners, such as our joint venture partners IOV Labs, to execute this new strategy. The purpose of this Review is to put us in a position to do so successfully and we look forward to providing ongoing updates to the market as we enter this exciting new stage in the Company's development."
The Directors of Coinsilium Group Limited take responsibility for this announcement.
For further information, please contact:
Coinsilium Group Limited
Malcolm Palle, Executive Chairman
Eddy Travia, Chief Executive
+44 (0) 7785 381 089
Peterhouse Capital Limited
Guy Miller / Mark Anwyl
(AQSE Growth Market Corporate Adviser)
+44 (0) 207 469 0930
SI Capital Limited
+44 (0) 1483 413 500
Notes to Editor
Coinsilium is a focused Blockchain, DeFi and Crypto Finance venture operator. As the first ever IPO of a blockchain company in 2015, Coinsilium has harnessed its experience and wide-ranging network to invest in leading blockchain projects such as RSK/IOV Labs, Indorse and Blox.
In July 2020 Coinsilium executed an agreement with global blockchain protocol company IOV Labs, to establish a 50/50 Joint Venture Company in Singapore to promote and commercialise RSK's products, services and technologies in the Asian markets and to promote the adoption in the region of the RIF token which powers the ecosystem of solutions developed by RSK, their partners and developers around the world.
Coinsilium shares are traded on the AQSE Growth Market, the primary market for unlisted securities operated by Aquis Stock Exchange, a Recognised Investment Exchange under the Financial Services and Markets Act 2000.
For further information please visit www.coinsilium.com or follow @CoinsiliumGroup on Twitter