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1.1 Market review
1.2 Importance For the Market
3. Business Model
3.1 Hedging Risks When Investing into ICOs
3.2 Hedging Risks When Buying Tokens In the Aftermarket
4. Investment Strategy
5.1 Decentralized Applications
5.3 Platform Architecture
5.4 UI and Backend
5.5 Smart Contracts
6. Token Placement Strategy
8. Potential Users
The following document is formulated solely for providing
information about the DeHedge project. No decision can be made
on the purchase of project tokens based on the information outlined
Investments in cryptocurrencies and application tokens keep growing.
According to Coinschedule, the total amount of investments into initial
erings (ICOs) from January to October 2017, exceeded $3 billion.
More than 10 ICOs occur worldwide daily and their number is constantly
Application tokens have demonstrated an unprecedented increase in
returns, while remaining highly volatile. Players who proﬁt from the
emerging market are individual investors, traders, and investment funds.
Also, investments in cryptocurrencies are made by conventional hedge
funds willing to earn higher returns.
It is important to mention that investments in ICOs and crypto-currencies
present high risks amid successful o
erings. Some IC...
1.1 Market review
Although ICOs are somewhat similar to IPOs, the crypto economy itself
has a very di
erent structure of participants, largely due to its “anarchist”
background. Investor anonymity, mainly personal trading, and lack of
regulation has allowed the creation of a B2C-like token o
Unlike the stock market, there are no brokers, hedge funds, investment
banks, or underwriters in the crypto market. Finally, there are no market
makers, whose strategy is to facilitate the trading of national currencies,
because cryptocurrencies do not belong to countries or geographies.
A company has the right to hold an initial token o
ering on its own
without resorting to underwriting services or by using tokenization
platforms for the ICO.
The crypto economy plays several roles, which are unusual for the stock
and money markets, such as:
Crypto markets have no mechanisms to protect the market or its private
investors. This could lead to investors’ losing their money on fraudulent
As the easiest way to earn on an ICO is to “buy low, sell high,” any
investor’s primary goal is to make sure that the price of a token they
purchased grows. However, the price is highly volatile, so the investor
should remain vigilant on the trading ﬂoor.
Investors always want to minimize their possible losses, irrelevant of the
environment they operate in. But, in the crypto market, investors are
unable to spot the break-even point of an investment portfolio through
personal investment strategies. Thus, they are at risk of losing all of their
The absence of historical quote data increases the investment risks
further. Options and other derivatives are impossible due to the time it
takes to pass from an ICO to an actual listing, which is at each project’s
In case of ICO investments, hedging is beneﬁcial for both parties of the
transaction. Crypto hedging will allow investors to limit their potential
losses, while the advantages for investors of having guarantees in buy-
and-sell markets are obvious. We will subject projects aiming for an ICO
to due diligence and determine their individual risk ratios and hedging
premiums, thus providing investors with an objective assessment of each
project. The hedging coverage for an initial token o
ering of a project will
be a trust trigger for its potential investors.
Hedging is just as beneﬁcial for platforms providing ICO infrastructure.
By cooperating with a hedging provider, such platforms will guarantee
the credibility of published ICOs and help them raise more funds, adding
to the platform’s own proﬁts.
Already tokenized and ﬁduciary crypto investment funds will also beneﬁt
from cooperation with DeHedge by minimizing the possible losses and
risks for themselves a...
ﬁnancial risks calls for the creation of an e
ective token price hedging
DeHedge aims to create hedging tools for the cryptocurrency and ICO
Hedgers are provided with the opportunity to hedge their investments
against ﬂuctuations in cryptocurrency and token prices. Reducing the
risks also lowers the potential proﬁts. In case of a hedged event, an
investor shall be reimbursed their investment less the hedging premium.
The investor’s maximum loss will therefore be equal to the cost of the
DeHedge supports two hedging strategies:
Hedging Initial Token O
An investor getting a hedging coverage for the purchase price of project
tokens pays the hedging premium to receive the right to sell the tokens
at the same price later on. This works in the same way as a PUT option
in a ﬁnancial market, giving the option holder the right to sell an asset at
on the other hand, has the right, but not an obligation, to exchange the
token for the hedging premium.
Hedging coverage for primary token o
erings is unlike any instrument on
the ﬁnancial market.
Hedging Publicly Traded Project Tokens
Hedging involves buying or selling a limited options contract on a crypto
An options contract (also known as option) is a derivative ﬁnancial
instrument that gives the buyer the right, and the seller the obligation, to
buy/sell a certain asset at a predeﬁned price later on. For this right, the
buyer pays the so-called option premium. A DeHedge contract deﬁnes
the hedging period and the range of prices for hedged tokens. Similarly
to ICO hedging, DeHedge has the obligation to buy back the token in
case of a hedged event.
A user, is a person or entity, which procures a hedging policy, pays for it,
and intends to cover their risks by such a hedging policy.
A DeHedge Token (DHT) is a commodity and an essential part of the
platform. It is used as the hedging premium that triggers the creation of a
blockchain record testifying the hedging.
A hedged event is an event covered by a hedging contract.
A hedging payout is the amount payable to the user in case of a hedged
A project token is a token of a hedged project.
A scoring model is a model that assigns scores to projects in order to
reﬂect their individual investment risks.
A strike price is the price of a project token available at the time of
getting hedging coverage. It will be paid to the user in case of a hedged
The strike range is a range of project token prices ﬁxed at the time of
getting hedging coverage. The upper limit reﬂects th...
01.04.17 – 20.12.17
Development of the scoring model
01.07.17 – 20.12.17
01.09.17 – 01.02.18
Development of the ICO insurance platform
Launch of the beta version
Launch of the platform
01.02.18 – 20.04.18
Development of the platform for insurance quotes
20.04.18 – 01.05.18
01.05.18 – 01.07.18
Development of the platform for insurance transactions on crypto exchanges
01.07.18 – 01.08.18
01.06.18 – 01.09.18
Development of the product for insurance the risks of mining farm buyers
01.09.18 – 01.11.18
Development of the product for insurance mining hardware
01.08.18 – 01.11.18
Development of the product for insurance crypto wallets
01.11.18 – 01.01.19