Eric Benz Talks Crypto with Rey Fernando, CEO of CurioInvest
While Changelly gives you simple access to crypto, CurioInvest is about your simple access to tokenized collectables, beginning with the world of collectible cars. Changelly CEO Eric Benz had a Crypto Talk with Fernando Verboonen, CEO of CurioInvest – a blockchain company that serves as a bridge between physical assets, namely collectible cars like Ferrari F12tdf and digital assets, namely Car tokens. The tokenization of supercars gives an outstanding opportunity to anyone to make a profit on collectible vehicles that rise in price. Sounds fascinating, doesn’t it? Have a seat, have a read!
Eric: Hello Fernando! Thank you for joining “Crypto Talks” with Changelly. So, for starters, can you decrypt in simple terms what CurioInvest is about? How did you come up with the idea? Are there any thrilling stories behind the project’s launch?
Fernando: Thank you Eric for the invitation. Very excited to join “Crypto Talks” with Changelly. So, CurioInvest is a technology platform for the next generation of digital assets backed by real ones. We focus on collectables given its unique properties and scarcity. We see a terrific opportunity at the intersection with blockchain and coming from the collectable car space it made sense to begin with fine limited supercars.
Though I was an investor in crypto since 2013, the idea resonated after taking a course at Oxford focused on blockchain strategy. There was a case study about art tokenization and how DLT could unlock value by tokenizing real assets. Right afterwards, my cofounder and I took a moonshot step and went on to bootstrap CurioInvest at one of the leading crypto jurisdictions in Europe, Liechtenstein.
Thrilling stories? Absolutely! As you may imagine, the team clocked a lot of hours developing the concept during the so called “crypto winter”. However, the scene flipped 180 degrees when we came across institutions racing to implement sound strategies for digital assets. Long story short, going out of stealth mode thanks to Techcrunch top picking us and becoming UBS future of finance top finalists increased our community beyond expectation!
Eric: Can you tell me more about the Car tokens backed by the vehicles? Is the token’s price fixed? Or is it directly proportional to the vehicle’s price? Also, is there a specific Car token issued for each vehicle?
Fernando: We are very excited about the Car tokens as it represents among the first tokens with a prospectus approval and with an ISIN. The tokens are pegged to the value of the car. This means token holders get the right to the profits when the car is sold. The concept is very simple and straightforward but it precedes a staggering wave of tokenized assets thus enabling new business models never previously conceived.
The beauty is in its simplicity. Token investors can purchase them directly from us to store them in their crypto wallet. Or traditional investors and use legacy systems through their brokers and get access to them.
Due to its 1 to 1 nature, tokens represent each asset individually. Going forward we see a blossoming landscape for DeFi applications such as token buckets representing Porsche or Ferrari lines, buckets representing young timers vs oldtimers, or even the opportunity to replicate the garage of a world class collector, all viable through a non custodial approach.
“Suddenly, thousands of users are able to get a token – or a fraction of it, in order to build their dream garage.“
Eric: You say that you make fine collectables more accessible: but just how accessible it really is? What are the entry barriers to buying Car tokers?
Fernando: Collectors clubs exist among the wealthy and a recent survey by UBS identified collectors already invest 2x more in collectables than in private equity i.e. startups. This space is so far all reserved to the very few due to the hefty upfront prices and expertise it takes to get into it. As tokenized assets get listed across various exchanges we expect to see a structural change to take place in front of us. Suddenly, thousands of users are able to get a token – or a fraction of it, in order to build their dream garage. However, entry barriers still exist as compatible stock exchanges are still scarce whilst others may have specific onboarding requirements.
Eric: So, say, I’ve invested $10000 in Car tokens backed by Ferrari F12tdf. What happens next? Where are my Car tokens stored? When will my initial investment pay off?
Fernando: So, say, you invested in the Ferrari F12tdf at the secondary market through the MERJ Exchange. Then you have three options:
1. Offer your investment for sale via peer-to-peer or exchanges.
You can do this at any point. You can choose the price at which you offer your investment for sale. Your investment is then listed as a Resale opportunity to other investors. We provide you and prospective purchasers of your investment with an estimated valuation (on a per share basis) which is updated with through an AI algorithm. And, of course, you’ll be able to see the prices at which previous shares in that asset have traded, as well as the prices currently being bid by prospective buyers.
2. Exit before five years
If a client wants to buy the entire asset, CurioInvest will commence proceedings to sell the underlying asset if a bid exceeds secondary at least 1) 125% during the first 2 years or 2) 120% during the next 3 years.
3. Exit after five years at market value
On each fifth anniversary of the completion of the transaction on the platform, each investor in the asset has an opportunity to sell their holdings at fair market value.
This means the asset is inspected and valued by an independent party with reference to factors such as recent transactions and the condition of the asset, adjusted for any potential liabilities that the issuance may have, such as costs or taxation. This is then divided by the number of shares the issuance has issued to create a per share market value.
Investors that would like to exit at this point will be aggregated into a block which will be relisted on the CurioInvest platform at the per share market value for up to 4 weeks. This process is similar to the initial crowdfunding of a new listing.
If this process is unsuccessful for whatever reason, CurioInvest will commence proceedings to sell the underlying asset. The asset will be advertised for sale on the open market at the valuation determined by the independent party. CurioInvest will administer this process in the interests of investors to maximise financial return. On successful completion of the sale, all investors in that asset will be exited and net proceeds will be distributed to investors.
Eric: As a businessman, I also wonder what CurioInvest’s source of income is. Does the company’s profit depend on the profit of your investors, or do you not gain on the rise in vehicles price?
Fernando: We see asset tokenization as an enabler for novel business models.
To get the concept starter, meaning the asset tokenization, CurioInvest will partner with you and may acquire up to 5% in each vehicle. Furthermore when the fine car is successfully resold, we charge a standard carry fee on profits. Meaning CurioInvest fee is only levied when your investment succeeds, hence your interests are completely aligned with those of CurioInvest-we only make money if you make money. Thus, our fee structure is on a “no win, no fee” basis.
Going forward we intend to ramp up our product pipeline by bringing rebalancing properties that replicate collectors garages as well as that provide an additional source of revenue to CurioInvest.
Eric: What measures should I take as an investor to secure my Car tokens? Or does the company take care of this?
Fernando: CurioInvest is a non-custodial platform meaning your key your assets. Handling digital assets requires specific knowledge and care. However, our institutional-grade solution introduces the third-party regulated custody providers in case you require a service for holding your assets.
Eric: Let’s face it, the luxury vehicle market is not as volatile as the cryptocurrency market. However, there is always room for investment risk due to the economic environment, market changes, etc., etc. Is there any investment risk coverage for contributors? Let’s say if the investments don’t cover the car price, or the price decreases significantly?
Fernando: CurioInvest digital assets introduce a novel concept through “asset-backed” tokens, in this case by real assets. As with any other investment, one shall consult with his financial advisor as well as review the risks associated with each investment. CurioInvest digital assets, however, differentiate from the rest due to its prospectus profile highlighting such risks.
Eric: What advice would you give to investors (no matter their niche)? Where’s the line between calculated and unnecessary risk? How to distinguish a good investment opportunity from a bad one?
Fernando: As the blockchain technology permeates further the financial industry and novel projects such as CurioInvest bring the needed professionalization, among investors shall question and answer what is their strategy towards digital assets – and within that space, towards asset backed digital tokens. In doing so, thorough research may highlight growing opportunities as new sources for yield.
Eric: Any insights on CurioInvest’s further development? Maybe any plans to add collectible motorbikes or jets?:)
Fernando: Curioinvest is the first project in an exciting roadmap towards streamlining the adoption of DLT across real assets. A planned DAICO project is at the horizon as well as potential collaborations with OEMs and private banks. Going forward we intend to tap upon a pipeline of extraordinary rare cars we have secured access and continue to increase as well as to bring them to stock markets. Last, building a community through organic growth remains a key priority to our team.
Eric: Thanks a lot for this inspiring conversation, Rey. Have a nice swap!
Disclaimer: This message is not intended as a recommendation or an offer or solicitation for the purchase or sale of any securities or financial instruments; the reference performance is not indicative of future performances; the referenced financial product may not be suitable for all investors; the message itself is only intended for EU resident contacts.