Hyperion is an investment vehicle of Invictus Capital that uses the ERC20 token IHF. Investing in Hyperion instead of directly in an initial coin offering removes some regulatory barriers to common-man investment and provides some security in the form of Hyperion’s professional fund managers.
“Through blockchain technology, independent investors now enjoy unprecedented global access to early stage investment opportunities,” Hyperion’s developers said in the project’s white paper. “However, the associated burden to perform the necessary due diligence is overwhelming, and public analysis tools are non-existent. Furthermore, the largest pre-sale bonus structures remain out of reach for many independent investors—venture funds and high net-worth individuals still enjoy preferred access to these investment opportunities.”
What Are the Advantages of Investing with IHF?
IHF provides expert talent and a significant capital pool to average investors who might be new to the cryptocurrency world. Both private and public pre-sales are included in the Hyperion portfolio, and all initial coin offers go through a vetting process with proprietary tools. This acts as a filter for scam or low-value initial coin offerings.
Hyperion adopts a higher-risk approach relative to traditional investment vehicles in keeping with the wild volatility of cryptocurrency markets – higher risk potentially means higher gains.
The IHF token itself can be traded on cryptocurrency exchanges. The token’s value is directly linked with the fund’s overall performance, and it is maintained with a coordinated buy-and-burn schedule.
The Hyperion pool also gives IHF holders bargaining power they probably would not otherwise have.
“A large fund created through syndication creates bargaining power that may be leveraged by Invictus Capital on behalf of token holders in negotiating benefits that would otherwise be unobtainable by individuals,” the developers said.
What Is Hyperion’s Buy-and-Burn Strategy?
A buy-and-burn is a purchase of IHF tokens on the open market by Hyperion fund managers that are then removed from the market, reducing the available circulating supply. The coins are “burned” by sending them to Ethereum’s zero address.
Hyperion’s buy-and-burn strategy turns on a fund value of $30 million. When this marker is hit, 50 percent of the returns from the fund each quarter will be used for burning excess IHF tokens.
The overall point of Hyperion’s buy-and-burn is to keep the size of the fund manageable without reducing the price of each issued IHF token.
“In an ideal buy-and-burn, the size of the fund can be reduced by a set amount and the cumulative value of unburned tokens increases by the same amount,” the developers wrote. “With a manageable fund value, the Hyperion team at Invictus Capital can ensure that the fund does not grow beyond what can be invested responsibly.”
Has Invictus Done Anything Like This Before?
Invictus Capital previously created the Crypto20 Fund. The fund operates as an index of the top 20 cryptocurrencies, ranked by market capitalization. C20 token holders invest indirectly in these 20 cryptocurrencies, with a management scheme similar to Hyperion.
The C20 initial coin offering raised $38 million, at the time the 22nd largest initial coin offering ever held.
Who Is on the Team?
The CEO of Invictus Capital is Michael Warden. Prior to his service with Invictus, Warden was a senior managing director at Friedman, Billings, Ramsey & Co. In that position, he served as head of the fixed income division and was responsible for “the establishment and build out of the fixed income business for which he developed an origination, banking, sales, and trading platform,” Invictus said.
Is There a Minimum Investment Amount?
The minimum for investment in the Hyperion fund initial coin offering is $50 in either Bitcoin or Ethereum. The initial coin offering will close on May 30 or when a $15 million investment is reached. Following the initial coin offering, Hyperion will only be available on exchanges.
A full 98 percent of the funds raised by the initial coin offering will be used to build Hyperion’s fund. The remainder will be used for operational expenses.
Are There Annual Fees?
There are no annual fees for investment in the Hyperion fund. An ongoing performance fee of 12.5 percent of the fund’s performance each quarter is assessed if the closing balance of the fund is greater than its opening value.
What If I Want to Liquidate My Funds?
On-demand liquidation is impossible due to the fact that the coins owned by the fund remain locked up on exchanges. IHF tokens, however, can be traded for other cryptocurrencies and then liquidated at will.
The fund’s lifetime is finite, but a hard-and-fast endpoint has not yet been determined. The fund will be liquidated and distributed at the end of its lifecycle, to be determined by Invictus Capital.
“Invictus Capital has reserved the right to determine the lifetime of the fund in order to be able to protect the interests of investors,” the company wrote. “For example, if the token is trading at a premium, it would not make sense to close the fund and pay out the ANAV (adjusted net asset value) to token holders which would be lower than the exchange price. If the token is trading below ANAV and returns are being realized, the buy-and-burns will lift the price back up. However, if the token trades below ANAV and the ICO market is in decline with no prospects of returns, it would be responsible to consider closing the fund and allowing token holders to realize the gains through the distribution of the ANAV.”
How Is the Value of the IHF Token Determined?
The IHF token will be subject to regular market pressures on the open exchange, and so it cannot be predicted with any degree of accuracy.
Transparency of information will be key, however, to maintaining a representative IHF value on those open exchanges.
Fund managers will regularly report the net value of the fund.
“It is reasonable to expect that the market will then decide the price of the token relative to these reported values,” Invictus said.
Where Can I Learn More?
Visit the Hyperion project homepage here and read the white paper here.