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Koia Review 2022

Franklin Carneiro da Silva| Updated: June 17, 2022

Hello there! This article will give you our honest review of an alternative assets platform: Koia.

Koia is a “community-driven platform to buy, collect and trade alternative assets” (watches, Wine, NFTs,…). By using “Fractionalisation” to divide the assets into small pieces, Koia gives investors access to physical and digital assets that were not previously accessible to ordinary people due to their high initial prices.

The company is still in its early phase but has been successfully financed by seed funds and investors. Their Whitepaper includes new features coming soon, such as a secondary market, a re-design and team expansion!

That’s Koia in a nutshell. If you want to find out what our research team has to say after carefully analysing Koia, keep reading. Here’s what we’ll cover:

1. Koia Overview

We first heard of Koia in 2021, when it was founded. At the time, it was more of a concept than an actual business. During the Web Summit, a tech and startup conference held in Lisbon, Portugal, we had the opportunity to meet two of the co-founders: Richard Draper and Iris ten Teije.

Koia Highlights

🗺️ Supported Countries Worldwide, except in restricted countries
💰 Fees 1.50% ( Fractionalization fee) + 2.50% (Royalty fee)
🎮 Demo Account No
💵 Minimum Investment $20
📍 Investment Instruments Alternative Assets (Watches, Art, Wine,…)

 

Koia is a platform that allows users to buy, own, and trade assets such as watches, art, rare wine, or trading cards.

The whole Koia process dissolves into these four steps:

  1. Get the product: Koia buys the rare assets from verified sellers, whether they are private collectors or reputable businesses;
  2. Storage: In physical assets, the products need to be adequately taken care of. For example, wine is susceptible to temperature changes, so proper conditioning is required. The storage location will be visible within the app.
  3. Fractionalisation: Each asset has hundreds or thousands of unique Fractions, a unique digital token, also known as a non-fungible token (NFT), associated with it. You should note that Koia is the legal owner of any asset until “either Fraction holders vote to sell the asset or when one user owns 100% of the Fractions and takes custody of the underlying asset”.
  4. Selling: Hopefully, your Fractions will be sold at a higher price than initially bought either in Koia’s marketplace (not available yet) – liquidity issue will arise – or through a buyout offer where you get your share of the proceeds of the sale.

All assets are priced in USD Coin (USDC), a stablecoin redeemable on a 1:1 basis for US dollars, backed by dollar-denominated assets. You will need to create a “Wallet” to hold funds and Fractions.

Koia also has a portion of the assets as part of their fractionalisation fee (see “fees” section). On the one hand, there is a considerable incentive for Koia to get the highest possible sell price. On the other hand, If we assume that a secondary market exists, a potential conflict of interest might be encountered. There could be a buyer willing to purchase a portion of the asset, and Koia may decide to sell him their portion first, rather than the other client’s portion who is also willing to sell at that price.

When does the sale finally happen? There is a voting process between the fraction holders of each item. A majority of over 60% is needed to decide on critical decisions such as selling an asset. Each fraction represents a vote. The voting process has a time stamp of 7 days; if you do not use it, your vote will be void.

Finally, Koia promotes ”drops” regularly and notifies users in advance across social media, e-mail, and their app. In your dashboard, you will notice “Future Drops” with the full price, and minimum fraction displayed.

2. Koia Pros and Cons

Pros

  • Access to Alternative Assets
  • Minimum Investment of $20
  • Voting for key decisions (e.g. asset sales)

Cons

  • The non-existence of a secondary market (yet)
  • No financial regulatory supervision (thus no investment protection)
  • Low number of investment options.
  • Lack of data and research to help users assess the risk/return tradeoff

3. Platform

Koia’s platform is relatively straightforward. After logging in, you land on the “Explore” tab where you can find the “Open” investments but also the “Coming Soon”, “Future Drops”, “Sold out” and “Exited”.

Koia – Explore

In the “Portfolio” tab, you can easily see information on your assets, NFTs and Wallet information:

Koia – Portfolio

And that’s it! You’re unlikely to feel overwhelmed or confused when using Koia. It feels welcoming and reassuring for beginners.

4. Products Offered

At Koia, you will only find alternative assets such as watches, fine wine and Pokémon Cards. Koia does not offer stocks, bonds, cryptocurrencies, options or other financial instruments.

5. Fees

Koia charges two types of fees: Fractionalisation and Royalty.

The Fractionalization fee is 1.5% and applies to any asset purchased by Koia to be listed on their marketplace. As an example, if Koia purchases a watch for $10,000, its fee for listing the asset would be $150. The fee is included within the Fraction price, so the price you see for the fraction is the total price you will be paying.

The Royalty fee is 2.50%. Despite not being applicable yet since there is no secondary market or a third-party NFT marketplace, the idea is for Koia to receive 2.5% from the seller of any sale proceeds. A USDC 200 transaction would translate to a net amount for the seller of USDC 195, while the USDC 5 would go to Koia.

6. Safety and Reliability

Koia claims it stores physical assets (Wine, Watches,…) with trusted storage partners with relevant documentation such as proof of purchase. Besides, all assets are insured at “market value”[1], either via third-party storage providers or with independent specialist insurance policies.

Despite their best efforts to increase transparency, uncertainty will always be present since there is no independent auditing. Plus, Koia is not regulated or supervised by any financial supervisory authority (Fractions aren’t securities). In a sense, you trust them to meet their obligations to you. There is no investment compensation fund that protects users if Koia goes bankrupt.

In what concerns payments, Koia does not store any customer funds or exchange any fiat for cryptocurrencies. This operational process is done by Ramp, a company registered as a cryptoasset business by the UK Financial Conduct Authority (FCA).

[1] The values are estimated by using proprietary and third-party data and insights from “key industry experts”.

8. Supported Countries

Koia is available worldwide, excluding some restricted countries (Iran, Afghanistan, Russia,…).