A Letter from Brian Cai（Founder and CEO of FORTUNA) #003Can Fortuna become the IOTA of the financial world?
Hello everyone! My name is Liangbin (Brian) Cai, I’m founder and CEO of FORTUNA. I’ve started a series called ‘Founder Blogs’ to share some of the ideas me and my team have, that do not fit anywhere else. Welcome!
After graduating from Yale University, I won first prize at the International Mathematical Contest in Modeling. I worked in various segments of the financial industry all around the world (New York, London, Hong Kong, Shanghai and Hangzhou), in the fields of investment banking, supply chain finance, Anglo-American law trusts, civil law trusts, and private banking. At the age of 26, I was able to work my way up in a state-owned bank. Prior to leaving, I was the general manager of the private bank and was responsible for over 30 billion in assets. After these great experiences, I decided it was time for something new, something bigger. That is when I founded Fortuna.
The comparisonOur project is called “Fortuna”, and this refers to the goddess of luck in Roman mythology. If you happen to be a fan of Carl Orff, you must be familiar with “
O Fortuna”. A beautiful song and a timeless classic. The abbreviation of our project and the name of our token is “FOTA”. It has often occurred that a comparison is drawn with IOTA when we first tell the name. On occasion, people have even jokingly compared the names and made the remark that we should become the IOTA of the financial sector and use the comparison in names to attract attention. We think that is a great idea!
We will fully exploit the possibility of comparing ourselves with the giant that IOTA is this very day: a big tree, made of fine materials and full of weight. Here we go: firstly, FOTA begins with the letter F which refers to the financial world. Secondly, IOTA’s pronunciation requires three syllables and FOTA only has two. In conclusion it should be easy for the reader to spot that FOTA is thus easier to pronounce, more pleasing to the ear, and requires a bit more ink.
(Just kidding).
To be honest, if we think about the “FOTA becoming the IOTA of the financial world” joke, or the FOTA will be “everything in the financial world” proposition, we find the idea quite significant.
IOTA wants to be the “connection of everything” and to be this ultimate manifestation in the financial world, people worldwide must be able to freely trade and exchange various kinds of financial assets. Trading of course already happens on a large scale, and with it we have seen many difficulties arise. Blockchain technology can solve many problems, such as the problem of trust and efficiency, however the blockchain technology currently is incapable of solving the problem we refer to as “chaining of assets”. What I mean is, eventually with a well-developed blockchain infrastructure, asset registration and circulation it can become a very convenient and efficient trading platform / redemption market. However, it needs better adoption by businesses to get to that stage. Until then it will be difficult to digitize assets and exchange them on-chain.
A good example would be real estate. Real estate transactions are still based on real estate licenses and therefore no distributed community can chain real estate licenses without external cooperation. Another example are stocks. Stocks are still based on securities registration and settlement agencies, and therefore no distributed community can chain stocks without external cooperation. So, the difficulty lies nót in ensuring there is a trust mechanism and there is transactional efficiency in the chain of transactions, but in the how.
How to chain the assets?
(Just kidding) If we take a closer look at the goal of asset trading and analyze it in detail, you find that people purchase assets only for two purposes: one is to use (i.e. a house) and the other is to invest. In the field of asset transactions, “investment” is more important than “usage”.
Derivatives are price contracts derived from basic assets. This contract is based on the future purchase or sales price of assets. When you purchase a derivative the only thing you need to do to increase value is to correctly judge the direction of the price of the asset. You do not need to hold or deliver the physical asset. For example, if you are optimistic about a hard-to-get stock and feel that the value will rise in the next three months you can use FOTA to buy a call option or forward linked to this stock. Without owning the stock, you can still make a profit if the price moves upward or downward depending on the type of derivative contract that you have purchased. Most asset transactions are based on price forecasting like this. As a blockchain facilitator for OTC derivatives transactions, Fortuna can thus open free trade and exchange in all areas of financial assets at this price contract level. Due to the nature of the Fortuna blockchain platform, all physical forms of basic assets do not need to be digitized and chained. Instead we exchange contracts that are negotiated for future trading prices. Determining the profit and loss depends only on the outcome of the future prices.
From this perspective, FOTA has avoided the biggest bottleneck in bringing assets to the blockchain. To return to the IOTA / FOTA gimmick. Until all asset classes in the world have been completely covered and infiltrated by blockchain technology, FOTA may be able to achieve the “connection of everything” in the financial world and it will be the IOTA of the financial world.
Thanks for reading and see you next time!
Brian Cai.
