In the third episode of the Equity Crowdfunding Report, Nick reviews the markets from this week and interviews CEO of Ember Fund, Alex Wang.
Highlights include data on market closes, including Reg-A and Reg-CF raises.
See Company Profile - Ember Fund
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Interview Transcript:
[00:05:03] So let's bring on Alex Wang, CEO of Ember Fun. Alex, thanks for being on the show.
[00:05:09] Thanks for having me.
[00:05:11] All right, so to review Ember Fun is an app that allows anyone to invest, manage cryptocurrency portfolio. You've raised over two hundred and seventy eight thousand dollars from over seven seven hundred eighty investors. The company has a live Reg. CF on the Republic platform and you are generating revenue and have several key partnerships with leaders in the cryptocurrency investment space. So let's just start from the top. Obviously, you and your team are crypto investors yourselves. And I take it you saw a lot of drawbacks when it comes to the space, especially for folks looking to enter it for the first time. What are the problems and challenges of investing in crypto? And then tell us what you have created and what it does to help solve some of these things.
[00:05:58] Yep, absolutely. So there's a couple issues with with crypto right now. And I think the biggest one being there's just so many out there. There's over 2000 at this point, probably three thousand cryptocurrencies out there, 90 percent of which we believe are not sound investments. And some of them are just straight up scams. This morning, you know, there's one that came out on the news that was a multi billion dollar exit scam. And so in terms of educating yourself and understanding which which coins are are good to hold, it's really confusing because from a technology perspective, it's changing so fast and there's just a lot to know and a lot to research. And so I think that's one of the big problems. Another issue is security. So the way that exchanges and apps have been built today is predominantly custodial. So the core assets together, which we fundamentally believe it wasn't meant to be kind of structured or architect that way. So what we've built is a solution that kind of addresses both of those two things. Right. So, number one, you know, when you open up the app, we make it just really, really easy for you to access the investment expertise of, you know, whether it's Quan's or, you know, fund managers.
[00:07:36] And we've actually had just recent stroke, recently structured a partnership with crypto crafty hedge fund. You're able to access their expertise. So, you know, the hedge fund example has a team of, you know, machine learning engineers that are looking at Unchained Data and making sense of all the price action that's happening. And so we our vision is really to take investment expertise from those guys and make it available to the world. And so that kind of address is the first piece of that, which is not knowing what to invest in. And then the way we architect the app is that we're fully non-custodial. So what that means is all the assets are encrypted and stored in the user's device and completely decentralized, kind of holding true to the ethos of the whole point of crypto crazy, which is sexy and fun. So, yeah, that's kind of how we thought about the problem and the solution.
[00:08:45] Ok.
[00:08:46] So we're just going to start to pick away some of these things that you just kind of brought up. Absolutely.
[00:08:54] You're doing all this under a non custodial position.
[00:08:58] Can you? You said that this is a very fundamental key aspect of the project. And so can you just kind of quickly and briefly for those who don't understand what a Cassoni is, just talk about that a little bit.
[00:09:13] Yeah. So now a custodian and kind of the traditional sense. Put it simply is that you're actually handing over your assets to a third party and entrusting them to take care of those assets. So kind of in the legacy banking system, we're used to this notion of a bank holding on to your money. And what we've seen time and time again is this. There's a lot of issues with this in terms of, you know, security and also transparency. And so bringing that into the crypto space, you know, we fundamentally believe that it wasn't meant to be pulled in one location and trusted entrusting a third party to take care of these assets. Because you think about it, crypto is essentially, you know, sending bars of gold. The cost of the Internet is kind of how I like to conceptualize it. And when you have, you know, one person or one entity with a billion dollars worth of digital gold in their possession, it's really a target for hackers from around the world to to try and hack those assets. Right. And so if you look at the original white paper for Bitcoin kind of goes against the whole point of it. The whole point of it was for everyone to take custody of their own assets and their own private keys and have ultimate control and transparency over those those assets. So, yes, CASSIDY is a very important piece of crypto. And I think oftentimes misunderstood because we think of everything kind of in the legacy context.
[00:11:18] Ok.
[00:11:19] So the blockchain obviously gives the company a unique situation to kind of mitigate some of the risk associated with, you know, being a custodian versus a non custodian.
[00:11:34] So talk a little bit about what you and the company being able to mitigate some of that risk.
[00:11:42] What advantages it gives you and your. Sure.
[00:11:44] Yeah, absolutely. So I think what's important to know within the context of crypto is is kind of this notion of private keys, which effectively proves ownership of your assets is very important and allows you to essentially move those assets. So what we've done is we've created a beautiful UI for you to interact with the app just like you would, you know, traditional thank you app or yet walk in and put it all that without. Hadn't you know about those private keys and able enable you to build these products? And this from architecture perspective. We call it zero mobile architecture, so we actually don't even hold any of the key. So in the rare case that we know we were to be compromised in some way, shape or form, there was actually nothing for this scale because everything is encrypted on your device. So from a company perspective, that's really important. From the user perspective, it's also very important because you don't have to trust a third party, not even us, to, you know, keep those private keys safe.
[00:13:10] Ok. So let me take a stab at how an actual transition transaction looks.
[00:13:18] So you've made it easy to convert USD into a top tier coin and then from that initial wallet, the investor can customize their portfolios by picking the funds or opportunities to invest it in, and then the system will then transfer and diversify everything using the blockchain. And I get that right.
[00:13:39] Yeah. Close. So basically how it works is that we light up at the moment for you. So we don't have access to this wallet and we enable you to fund that wallet then with various apps. So whether you have it on Coinbase or more, well, it was one or even one to use a credit Twitter or bank account. We make it easy for you to fund that big on wallet and then use that bitcoin in your wallet to invest in various funds so that funds and structuring kind of differ based on kind of your risk profile, you kind of the best of pieces. We have indexed as we have, we're launching an algorithmically trade single point fund. We also have kind of a higher risk, higher return. And what happens is you choose a fund after you've funded people point wallet or whatever means. So let's say you have a hundred dollars after you choose your fund. OK. Everything is an automatic right. So lighting up the wallets, searching for the best exchange rate, funding those wallets as well as, you know, when there is a notification, rebalancing those assets. Right. And so everything. Is that pretty much for you automatically get that?
[00:15:17] So we've seen this in kind of many other brokerage jobs with other types of securities, you know. So this is where Ember Fun really shows its value, though. So what you guys are saying from this point, you've you've added the funds.
[00:15:34] You actually manage the the the investment, though.
[00:15:39] Yep. And so we have various as I mentioned earlier, we have various partnerships and fund managers, whether it's a Quine or a hedge fund fund manager that is actively look at the markets and providing their expertise for the user to kind of kind of follow.
[00:16:01] So we kind of share that with content to let the youth, you know, give you a good example. So one of the last we rebalance into a coin corp is of information that do you know you're going to outsmart Microsoft?
[00:16:28] So you rely on something that coin. Then a week later, which is yesterday, that came out that the bitcoin did very well. So that's kind of the mix of, you know, where we see credit kind of value. Of course, no one's perfect and it's not something or guaranteed returns, but it at least gives me access to a fund manager. It's markets.
[00:16:59] We had a little technical difficulty there, really. We pick back up with Alex. Alex, so obviously your team has a lot riding on this project and you know, from multiple angles.
[00:17:14] Just talk about your team a little bit. Talk about your partners and also just go into your philosophy on cryptocurrencies and investing in the blockchain. And let us understand the the actual products that you guys offer and how it reflects these principles.
[00:17:30] Yeah, absolutely. So, you know, our philosophy with crypto is that obviously we think it's a huge opportunity, but it's also speculative in the sense of, you know, allocate maybe 1 to 5 percent of your liquid debt or but don't mortgage your house like a lot of people did in 2017 and also take an investment vehicle that kind of reflects your risk tolerance. Right. And so the way we've structured it is we have various portfolios. So we have indexes which are market cap weighted, which tend to follow the market. We have a product that we're launching that trades between Bitcoin and a stable coin, the point being a one to one equal value to the US dollar coin.
[00:18:27] And so if your bitcoin kind of maximalists and tend to be a little bit more conservative, that's that would be a good portfolio for you. And then you also have high risk portfolios like the S tier portfolio, which constructs is constructed of between four and six coins. And these all coins tend to be, you know, potentially high rates and also high risk. And for people that are super conservative, we also are launching a portfolio with with a partner compound that allows you to earn X percent of interest. So that's right. Now it's looking between 4 and 6 percent. NPR paid every fifteen seconds. So that's more of kind of a float by. So it kind of depends on your risk tolerance. And we have various portfolios that kind of reflect your kind of investment thesis. But overall, I would say do not allocate more than, you know, five, 10 percent max that worth two to crypto because it is as an aggregated, highly risky asset class as it is in terms of our partners answering question about that. There's a ton of different partners. We have compounder. I mentioned this on the loan side. We've partnered with crypto currency hedge fund called BLOCK Force Capital. As I mentioned earlier, they have a team of, you know, p_h_d_ and machine learning engineers that are kind of analyzing Unchained Data. And we also have a couple partnerships with the number one writer on Quora for Cryptocurrencies, Reyes Cramer, as well as the number one most viewed YouTube content creator made a dash. And so we have various partnerships and kind of just depends on your risk tolerance.
[00:20:39] At your investment cest.
[00:20:42] Well, this is obviously a really exciting time to be in crypto in fintech. But is retail investors at least here in the US? We tend to kind of take advantage of our overall access to the investment products. You know, the global outlook on all of this is what is really exciting to me when I talk about blockchain. So what does personal wealth creation look like in the next five to 10 years in the U.S. and abroad? And how is Amber fun. going to fit into this future?
[00:21:13] Yeah, absolutely. And this this is particularly what we're interested in is kind of like the long term vision.
[00:21:19] And for us, we really want to democratize access to institutional great investment products.
[00:21:29] Right. And we believe that crypto is really the best ways to do that. And to give you kind of a specific example. I think would be really exciting in the next three to five years is to see someone in a third world country not even have to interact with the traditional banking system to get access these investment products. Right. Oh, someone in Zimbabwe that doesn't have a big doesn't have a bank account. By the way, one third of the world is completely unbanked. But someone in Zimbabwe, that doesn't happen. You can have a big bank account, can earn bitcoin and take, let's say, $10 or $100 and invest in a basket or a portfolio of cryptocurrencies that can represent fractional shares of coal state building in New York or, you know, among product or commodities or even collectibles and be able to access an investment professional or someone that's an expert. They're kind of brain and apply that. Those that expertise on those assets, I think is something that's extremely exciting to us and we hope to be able to go in the next three, five years.
[00:22:57] Marquel Well, Alex, this is all very exciting stuff. We're gonna be closely following the success of your company over the next few months. There's no question that you and your team are breaking down barriers here and making it easier for people to get involved in crypto investing. Thanks for joining us.
[00:23:15] Thank you so much.