Factom Asset Allocation Strategy Plan

By Nicola Minichiello – Communications

The Factom Foundation is collecting revenue via a software sale to support and further the development of the Factom Software. While we have an asset allocation model built that I will describe here, it is important to realize that this is an investment plan, and during the software sale we will be liquidating portions of the incoming bitcoin that may leave us holding allocations that don’t match what our ultimate allocation model dictates we hold, post software sale. With this in mind, our allocation plan is as follows:

The foundations liabilities are primarily denominated in USD, and in order to maximize the runway provided to the Factom Foundation development team, we will hold the majority of the foundations endowment in USD denominated, low risk, fixed income assets. Traditionally a foundation endowment would include various allocations to both fixed income assets, and other risk assets. Usually endowments have growth targets and would incorporate this to building their risk allocation to assets like stocks, real estate, and alternatives. We have decided that instead of traditional risk allocations, the Factom Foundation will hold a smaller percentage than normal in risk assets, but to concentrate the eternity in bitcoins. We will not  have any risk exposure until the foundation has raised at least four million dollars – an amount we are confident will fund the foundation’s development costs for at least two years. 

Between four and five million our allocation to bitcoin becomes five percent. It scales from five percent up to as high as fifteen percent, should the software sale raise twelve million dollars or more. The table of percentages is as follows:

Asset Allocation

All USD assets will be held with itBit in a multisig account until the milestones are reached and funds are distributed. Until milestones are reached, no fixed income assets will be purchased. Funds will be held, and bitcoins held in our exodus address. As milestones are reached, USD funds will be disbursed to operating and brokerage accounts to maintain our dollar asset allocations. Bitcoins will be held in a custom multisig, cold storage solution provided to us by Bitcoinsultants, and complying with C4 security standards and practices.

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