A bumpy road to success: venturing into the turbulent world of cryptocurrencies

Zug (Switzerland), December 30, 2021 – If not for a political crisis and a chance cigarette encounter, perhaps a unique cryptocurrency referenced to high end real estate properties might not have been launched. But those two seemingly unconnected twists also reveal the traits of a true entrepreneur: the ability to see positives in difficult situations and the determination to succeed, mixed with a dash of serendipity.

The currency is called the D¥NS, created by Dynasty Global Investments AG, the brainchild of a CEO who has come a long way since setting up his first e-commerce business in his native Brazil. At the age of 19, he created a film-processing operation that did away with traditional shops, replacing them with online orders and postal delivery, in effect disrupting a business that remained virtually unchanged for decades.

Eduardo Carvalho continued searching for new ways of doing things and applying the latest technologies, until he came up with Dynasty Global Investments AG, a natural extension of his approach. Early on, he saw how disruptive blockchain technology is and will be for many industries, particularly the financial sector. His interest in blockchain and creating an innovative cryptocurrency was born out of the political and economic crisis that engulfed Brazil in 2016, when then president Dilma Rousseff faced an impeachment process that eventually led to her fall.

At the time, Carvalho was a partner with Imóvel A, the offshoot of Lopes, a major real estate corporation in Brazil, focused on properties in the most upmarket residential neighbourhoods: “We had a close relationship with the owners of these properties and often they add commercial assets to their portfolios, so we set up a commercial property unit. But there was a liquidity problem in 2016 and offers were coming in quite low, so only those really in need of cash were selling”, he recalls.

It was this liquidity crisis that brought together Eduardo and his colleague at Imóvel A and fellow entrepreneur, Fabio Asdurian. The initial idea was to come up with a basket of real estate assets for international property investment funds, especially targeting family offices. But they soon realised that Brazil’s domestic crisis was scaring off international investors, which led them to focus on a technology-based solution for the new fund: “We looked into using artificial intelligence to help analyse data but realised that wouldn’t be different enough. That’s when we spotted blockchain technology and cryptocurrencies”.

A new crypto concept

Carvalho remembers how the crypto route was, to begin with, accidental. “We were looking for something that could work for real estate assets, but then realised that none of the cryptos at the time had any reference to real things. What was done through cryptos was within the crypto world, and what was done with fiat currency was through fiat. So, we thought of building a bridge between these two worlds by launching a cryptocurrency connected to our property assets”.

With the idea defined in 2016, the next step for Carvalho and Asdurian was to decide where to base the new business. They needed a place that would allow the concept to flourish and they soon realised that Brazil might not be the best option. “When you look at blockchain technology, you quickly realise that you need to see it in a global way, because it is totally decentralised, with exchanges all over the world adopting global standards like the ERC-20 tokens. I can’t see blockchain being used in any other way”, stated Carvalho, pointing to this as a key reason he added ‘global’ to the company name.

“Switzerland brings all this together: it does business with all countries in the world due to its neutrality, and I already knew about the Crypto Valley in Zug and its ecosystem with crypto-related businesses already in operation”. This led Carvalho and Asdurian to quit Imóvel A, gather funds, especially through friends and family, and head to Zug in 2017 to set up their new venture.

If the word ‘global’ had to be in the name of the company to reflect its international reach, Carvalho explains that ‘dynasty’ was also a natural conclusion, as they wanted to make it clear their cryptocurrency was made to stay for generations. Unlike so many other digital currencies among the estimated 7,000 in existence that don’t gain prominence or fail to survive.

A lucky cigarette

When both arrived in Zug, they had a shocking surprise. As they tried to contact some 14 blockchain-based businesses already established in the region, they quickly realised that the businesses were not physically there – they only had post boxes. At that point they feared they had made a dreadful mistake. That’s when the tenacity typical of entrepreneurs kicked in, as they carried on asking people in the street or hanging around a Starbucks trying to spot anyone reading or doing anything related to blockchain.

One day, when they were close to giving up, Eduardo insisted with Fabio that they should leave the café and go for a walk, despite the fact it was getting late and snowing in the city. That was when a chance cigarette encounter changed the course of the company’s history. “We walked a couple of blocks and Fabio spotted someone finishing a cigarette break outside a building. That was Niklas Nikolajsen, founder of the Crypto Valley and president of the exchange Bitcoin Suisse which, at the time, already generated US$ 250 million per week in cryptocurrency transactions.”

Under the falling snow, the pair described their plans to Nikolajsen. “He said the idea was innovative, that we were the first Brazilians he interacted with and it was the first time he had heard of our concept of a crypto referenced to real estate assets.” For Eduardo, that chance encounter may have been fundamental for the project’s success, as Nikolajsen introduced them to his network of specialists, including lawyers and banking representatives, which paved the way for the process to form the company.

The outsider’s challenge

There were additional hurdles to set up the operation, especially as the two Brazilians had no history of doing business in Switzerland. To begin with, they had to identify a Swiss citizen who would answer civil and criminally for the company. According to Carvalho, some of the obstacles had to do with being Brazilian citizens. “Even today, I tried to open a personal account with the Credit Suisse and their system told me to go to a branch as soon as I selected my nationality from the dropdown menu. Many Brazilians used Switzerland in the past to hide money through numbered accounts, that don’t even exist anymore, which adds to reputational challenges”, lamented Carvalho.

But he also sees these hurdles as positive: “As it is harder for us, our preparation needs to be better, you have to be even more transparent and set a much higher standard. Today I see that we can apply for higher licences, with higher turnover, because we can prove we have all the compliance necessary. In other words, what made it harder also made us much better prepared”.

The early challenges also make it easier for Dynasty Global Investments AG to onboard clients in Asia and in the Middle East, as the company evolved and learned how to complete the process correctly. It also gave him and his partner time to further develop the D¥NS, including the buy-back and burn concept created to lead to scarcity. The currency has a limited number of tokens, fixed at 21 million. As it becomes scarcer, the value of the remaining tokens may increase.

Ready, steady, stop

From the chance encounter onwards, Carvalho and Asdurian went on to work on the details needed to create and operate a cryptocurrency, including the development of their blockchain-based smart contract, token classification and regulatory elements such as their anti-money laundering compliance system. To ensure this development phase went well, they also organised a second successful funding round towards the end of 2017, paving the way to conclude the preparation work in 2019, when the new currency, the D¥NS, would be ready to launch.

For practical reasons, the launch was scheduled for early 2020, backed by an ambitious investment roadshow throughout Europe, with over 100 meetings scheduled for a month, covering 12 European countries, aimed at engaging private investors and family offices. The roadshow was due to start in Portugal on the 17th of March, just when European authorities were about to introduce travel restrictions in their attempt to contain the spread of the coronavirus, which had reached the continent a few weeks earlier.

“It was a major setback, strategically and financially, as everything had been paid for. We made the point of paying our suppliers, who thanked us as we were amongst the few who honoured all agreements”, remembers Carvalho. “But the lockdowns also had a positive impact, as they increased digital transactions and bitcoin use increased, too, making 2020 the year when bitcoin became more mainstream.” As the year progressed, Dynasty’s founders developed other ways to promote the new crypto, officially in existence since November 2019, by joining virtual events like the Paris Blockchain Week Summit. They also decided to set up a subsidiary in Brazil in order to better engage with investors there.

“We set up the Brazilian company in February 2021, with its capital totally made of D¥NS – the first business there to be fully capitalised with a cryptocurrency. And as the private investment rounds went on, we realised there was considerable interest and that we could make our first real estate acquisition even before the public offering. That was when we bought the office space at Faria Lima Avenue”, stated Carvalho in reference to approximately 1,000 sqm of high-grade office space, purchased for the equivalent of US$ 5.48 million in that avenue’s prestigious business quarter.

Knowing you

According to Carvalho, private investors have come from different parts of the world, with a series of principles always followed: every potential investor is checked for their identity and goes through a risk analysis as part of Dynasty’s compliance process. “There isn’t a single D¥NS made available without us knowing who is acquiring it. This is another big difference as our tokens are well tracked, unlike many other cryptocurrencies which are anonymous. Their owners are only identifiable when they go through the exchanges, but you can mine bitcoins and remain anonymous for a long time”.

Transparency is also important as Carvalho expands the network of private investors, especially through family offices – entities created to manage the investment portfolios of wealthy families, totalling some US$ 4.5 trillion in global assets. In early 2021, Carvalho spoke at the prestigious Sir Anthony Ritossa family office summit in Monte Carlo, where the D¥NS attracted considerable attention, leading to another invitation to take part in the event’s Dubai edition which was held in early October.

Carvalho is particularly keen to deepen Dynasty Global Investments AG’s involvement with the digital financial sector in the Middle East and Asia, with plans to open an office in Dubai later this year and acquire properties in the region. “We were invited to Dubai to get to know people developing their infrastructure and blockchain regulation. I quickly realised that this is a region that looks to the future and that made me want to structure the business there”.

Next steps

As Dynasty continues to build its portfolio and accelerates the sale of tokens together with the buy-back and burn process, Carvalho doesn’t want the business to be known only as the innovators that referenced a cryptocurrency with real estate assets. His vision is to make it one of the top 20 cryptos in the world by making the case for its value based on a long-term plan, with Dynasty making 95.6% of the tokens available to the market over the next few years, with the rest staying with partners, founders, staff and the company’s treasury. Once that is done, Carvalho sees Dynasty’s role as the managers of a property portfolio worth over US$ 3 billion that will remain the reference to the tokens in circulation.

However, he doesn’t plan to stop there. “Our token has an R&D element and we are developing products, including those related to the D¥NS to make them easier to be accepted globally. The concept is similar to payment systems like Visa or Mastercard through our Club Dynasty, aimed at token holders with different benefits depending on the number of D¥NS you have. But this is a longer-term project.”

Dynasty is now applying for new licences to extend the services it can offer, moving towards being somewhere between a fintech and a bank. Carvalho says the company’s unique know-how positions Dynasty to launch new products in the future. “We can replace real estate with other assets and something we are looking at is clean energy, as a way to help the environment. Money is not the end game – we can choose paths that can bring mutual benefits.”

Lessons learnt

Looking back at how the Dynasty project began, Carvalho says the main lesson he learned is that you need to study things before you start and have the determination to face obstacles without losing enthusiasm. “If you don’t have the knowledge, you won’t spot the signals and will be left behind. I first understood how strong blockchain technology really is when I saw banks criticising it, mainly because they realised how much they stand to lose if they don’t adapt.”

When speaking about blockchain, Carvalho becomes messianic about the power the technology has to transform our lives. “I spotted it very quickly. Blockchain is now where the internet was in the 90s, when it was still dial-up. And I explained to some billionaires in Switzerland that they don’t need to understand blockchain and that the interface will be improved, with us soon using it without noticing, just like we use the internet today. My mother makes videocalls without knowing what is an IP protocol because she doesn’t need to know that to use it. It will be the same thing: people will transfer sums from one wallet to another through blockchain technology without even thinking about it.”

“To me, this will revolutionise the payment systems, with stocks trading with interchangeable tokens between exchanges 24/7 and with instant liquidity, with crypto and fiat parity. I see a world integrated through this technology, leading to a market capitalisation far beyond today’s US$ 2.3 trillion. Whoever takes a position now will be in the same position as those who bought Google shares before it created AdWords and went for seven years without revenue.”

Eduardo Carvalho ends with a warning to those who remain complacent in the financial sector: “I think blockchain will have an even bigger impact than the internet. It needs the internet to operate but the internet impacted mostly the communications sector. Blockchain will transform the entire financial market: how assets are held, transferred and traded around the world, from market stalls to stock exchanges. And when all of this is integrated, the impact will be considerably bigger. That is why I never thought of giving up, even at the most difficult moments”.

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Dynasty Global Investments AG was created in 2016 and established in the Crypto Valley in Zug, Switzerland – the most important ecosystem fostering blockchain innovation – in the year 2018. By balancing the essence of disruptive businesses with the Real Estate Market, Dynasty bridges the digital and real worlds, allowing investments and transactions to flow freely across borders through our real estate-referenced ERC-20 token, the D¥NS.

This release was published on openPR.