How Blockchains Will Disrupt Mutual Funds…You Build Your Own

Jeremy Epstein Business

TL;DR: Prism shows us the future us individual-led, intermediary free mutual funds.

You know how we keep talking about taking the middleman out of the equation?

Well, I had that feeling again recently as I played around with PRISM.  I had poked my head in a few months ago, but didn’t give it too much time.

Prism is currently in a closed beta and is led by Erik Voorhees, a Bitcoin OG if there ever was one, CEO of ShapeShift, and contributor to Blockchains in the Mainstream. [He also gave a master class in crisis management back in mid-2016.]

So, what does PRISM do and why is it cool?

From their website:

Prism is the world’s first trustless platform for creating portfolios of assets.

Designed and built by ShapeShift, Prism uses smart contracts deployed on the Ethereum network to bring custom portfolio management to everyone.

You can create and rebalance your own portfolio, as well as browse the public portfolios of others and follow them.

So that is exactly what I did.

Now, my one issue with the site (at the moment) is the relative limited number of coins that it supports.  I had hoped to create a broader index of coins, but there are only about 25 or so coins (if you have ever used ShapeShift, you will see the exact same coins).

But, hey, it’s a beta so you take what you can get.

Based on what was available, I decided to build the Never Stop Marketing Privacy Coin Index.

Now, I happen to think that Zcash is far and away the best of these and here’s why (disclosure: I’m an advisor).

Still, for kicks, I figured I’d just break it up into thirds. After all, it’s a beta. If you have access to PRISM, you can see the portfolio here. Sorry for all the blackout. Privacy and all.

 

What is particularly neat is that you can see how others have built their portfolios and, if you like it, you can clone the portfolio, making one of your own. Obviously, you can tweak it from there as you see fit.

And, remember, PRISM doesn’t hold ANY of the coins for you. It’s all held on the Ethereum blockchain, secured by your private key.

There you go. I just made a mutual fund and have total control over it. No intermediaries. No custodians.

Sure, there are only a few coins there today, but you can easily see how this becomes a vehicle for investors-if they want- to do the same for any asset with no need for Vanguard, Janus, Magellan, or any of the other fund companies out there.