This chapter will have two main components. The first will examine the business entities and their subsidiaries that are responsible for the ICON project. This section can get confusing, as there are a lot of pieces on the board, so it’s my goal to make it as easy to understand as possible.

The second component will look at the ICON Foundation and the beginnings of the project itself.

ICON’s Institutional Backing

The origins of ICON begin with Yello Mobile, a Korean mobile-app company, launched in 2012.

Here is what Seoul Space wrote about Yello in 2017:

“Korea has always been dominated by conglomerates such as Samsung and Hyundai. However, times are changing as more and more startups find success in Korea. One of the biggest success stories is Yello Mobile which is considered the Y-Combinator of Korea.
Founded in 2012, Yello Mobile is a mobile business platform/VC firm operating in shopping, media content, marketing & advertising, travel, and O2O business. It has already more than 65 startups under their umbrella and the company is now worth over $4 billion. These startups help each other in regards to payments, resources, and shared costs.”

As a result of its multi-billion dollar valuation, Yello has been given the label of a “unicorn” startup (defined as a private company with a valuation over $1 billion), which puts it in the same class of companies such as AirBNB, SpaceX, Stripe, and others.

According to TechCrunch, “Yello Mobile has built its business around five categories of apps: Shopping, Media, AdTech, Travel, and Offline-to-online.”

As the business grew, Yello acquired a number of apps and other companies to grow their user base, but it’s unlikely you’ve heard of any of them (unless you live in Korea): “Many of the brands and apps run by Yello won’t be household names to the average reader in a market like the U.S. or Europe, but they have some decent traction in Korea, with one-third of the country’s population using one or another of Yello’s apps, as well as some growth in South-East Asia.”


As you can see from the image above, Yello is a sprawling company with ownership over a diverse set of other startups and businesses.

Around 2014, Yello decided to launch a spinoff entity called the Yello Financial Group, which Yello describes as “Korea’s leading accelerator for financial technology companies.”

In short, Yello perceived opportunity in the market for FinTech companies and launched an accelerator to participate in that market. Their efforts were successful almost immediately:

“In less than two years since founding, the company [Yello Financial Group] launched over 30 fintech products and onboarded dozens of marquee clients including AXA, SK Securities, and ING while using the Yello brand in partnership with Yello Mobile, an Asian mobile platform.” (Source)

In 2016, about two years after it’s founding (but about a year or so before the launch of ICON), Yello Financial Group changed its name to Dayli Financial Group (DFG). According to DAYLI Financial Group CEO Sean Shin, “Based on technologies, data, and the grit that we call the ‘DAYLI spirit’, it has been DAYLI Financial Group’s mission since the establishment to provide digital financial services that can enrich customers’ daily lives. The new naming will help clarify the corporate vision both internally and externally. We will do our best to ensure our customers can actually feel the DAYLI Life, with access to easier, faster, and ever-available digital financial services and practical benefits.(Emphasis mine)

Dayli Financial Group, according to their website, has received more than $100 billion won (approx. $86,631,000) in investment funding, and has several hundred employees according to Crunchbase.

In 2017, Yello became the majority shareholder of DFG to further formalize their connection with the entity:

“Yellow Mobile recently announced that it has acquired 52.39% stake in Daily [sic] Financial Group, formerly the largest shareholder of Formation Group, for about 112.6 billion won (US$110M). The shareholders of the Daily Financial Group consisted of Yellow Mobile, foreign and domestic investors, and members of the Daily [sic] Financial Group.
YM now being the major shareholder of DFG enables YM to add Fintech and digital financial services to its business portfolio, creating synergies with its existing business, and strengthening its client offering in Korea and other regions.”

Still with me? To quickly summarize, one of Korea’s unicorn startups (valued at $4 billion), detecting opportunity in the FinTech sector, decided to launch (and now owns) a business operating as a startup accelerator focused on launching and growing companies in the FinTech sector.

Let’s focus a bit more on Dayli Financial Group.

Dayli Financial Group also has a subsidiary called Dayli Intelligence, which “is a financial intermediary specialist in financial technology and provides artificial intelligence and block chain solutions for financial innovation.” Dayli Intelligence began when several startups under the Dayli Financial Group joined together to “to offer AI services that could give ‘practical help’ to financial firms.”

In May of 2016, Dayli Intelligence launched a block chain professional enterprise called theloop (and if you’ve been following ICON for a while, this should ring a bell). The purpose of theloop was to develop private blockchain solutions for select clients of Dayli Intelligence (remember, this was before the ICON public chain, and the ICON project as we know it today, came into existence). In late 2018, following the launch of the ICON project, theloop was rebranded as ICONLOOP, ensuring a more clear association between theloop and ICON. As you read the rest of these articles, note that ICONLOOP refers to theloop as described here.

In addition to ICONLOOP, Dayli Intelligence has subsidiary, “DAVinci,” which is an artificial intelligence company geared toward providing AI services to certain clients.

If our list of “Dayli’s” wasn’t long enough, in 2018, a subsidiary of Dayli Financial Group, AIGS System, changed its name to “Dayli Blockchain:”

“The company plans to create synergies with the Daily Financial Group, which owns a cryptographic exchange coin source and a block chain specialist, Daily Intelligence, and a public block chain icon ( ICON ). The Daily Financial Group is also a subsidiary of Yellow Mobile.”

According to a recent press release put forth by Dayli Blockchain:

“Dayli Blockchain is a smart city solution company that provides urban information systems, including transportation, security and control, and financial transactions. With many years of experience in smart city construction and infrastructure technology, the company is working on a wide range of smart city projects, and is conducting blockchain technological development and investment with an aim to build new kinds of smart cities that incorporate blockchain technology.”

Let’s stop here for a moment. In case this has been as confusing for you as it had initially been for me, I am going to reiterate this with a more practical example:

Let’s envision an imaginary tech company. We’ll call them Acme Technology.

Acme Technology is a successful startup. They have more than 1,000 employees and millions in revenue every year, perhaps even hundreds of millions. They’re valued at $4 billion. Their apps are profitable, but, like any company, they hope to make more money. So they begin exploring markets where they believe opportunity lies.

They decide they ultimately have the resources and abilities to provide services to blossoming companies in the emerging “financial technology” (FinTech) sector. They believe that they can make money by providing specialized technology services to these companies, investing in these companies, or even outright purchasing them if the opportunity makes sense. This new entity is called Acme Group.

Acme Group has a number of subsidiaries that provide even more specific technical services. One subsidiary is “an expert in natural language processing,” another is “specialized in financial data analysis and machine learning technology,” and another “provides a variety of large data-driven predictive analytics and modeling services, including credit rating, anomaly detection, and CRM, ” and another one — let’s call it AcmeLOOP, “specializes in block chains and provides optimized solutions for each area, from financial services to healthcare to non-financial services such as IoT.”

Each of the more than a dozen subsidiaries has multiple clients, meaning the Acme Technology umbrella potentially contains hundreds of companies they have established direct business relations with.

Not only does their subsidiary AcmeLOOP have the financial and institutional support of a multi-billion dollar entity, but they also have access to hundreds of relationships among businesses within their sector.

Obviously, AcmeLOOP is a stand-in for ICONLOOP.

I want to focus on ICONLOOP for a moment, because it ultimately serves as the key bridge connecting Yello Mobile’s sprawling network and the ICON blockchain project.

So what exactly does ICONLOOP do?

Here is where I will callback to my initial example of the student who visited the hospital from Chapter 1. Staying consistent with this example, the hospital, the insurance company, and the school all likely need a company to help them build their private blockchain system. That’s the service that ICONLOOP is already providing to companies (and has been for a while), most likely those that have had relationships with Yello Mobile and the Dayli Financial Group.

During the 2017 crypto mania, a number of ICOs, projects, and tokens were launched. Most did a great job of presenting projects that had seemingly impressive teams, polished websites, well-written whitepapers, and a conceivable use case for each project.

Over time, a number of these projects have washed out. It turns out many of those teams with “serial entrepreneurs,” “corporate marketers,” and other seemingly impressive titles were simply a group of individuals who thought they had what it took to launch a blockchain enterprise, but clearly didn’t. Either they didn’t have a firm grasp of their market and industry, they didn’t understand the technology, they didn’t have the relationships, or they didn’t actually have a use-case. Sometimes it was a combination of all the above.

That’s not the case with Yello, the Dayli’s, and ICONLOOP. They have an understanding of their industry and market, because they’ve already successfully thrived within it. They understand the technology, since they’ve been working on blockchain technology for several years. They have the relationships, since they’re part of a larger ecosystem with hundreds of relationships established.

Again, this can all get confusing. Here’s a simple way to think about it. If a company is associated — either as a subsidiary or client — with either: a) Yello Mobile, b) Dayli Financial Group, c) DaVinci, d) Dayli Blockchain, or e) ICONLOOP, it is a reasonable assumption that the company — if they are using blockchain — will be looking to utilize a public blockchain to maximize the utility of their own private blockchain.

But are those companies actually using blockchain technology? What about the lack of use case(s) referenced above that proved fatal for other projects?

Here is a quote from Min Kim, speaking at the interoperability panel at AIONEX in May 2018:

“…we also have blockchains in the healthcare side, university side, and we’re in the process of linking these blockchains together. There are other consortiums that are very interested in using the ID data that are stored in the 25 securities firms blockchain. This is not something that… we thought of, it is a natural progression to where things are going. As a company we are pretty much delivering on what the market is demanding at this point.”(Emphasis mine)

The blockchain projects the ICON ecosystem is tackling, especially interoperability, were as a result of the existing business partnerships, relationships, and subsidiaries of Dayli and others pointing out that a blockchain solution would be a valued improvement over the current status quo as it relates to respective sectors.

This isn’t a handful of entrepreneurs with minimal tech experience trying to launch a project. This is a set of large business institutions getting behind a public blockchain project, with identified use cases, and the resources needed to carry it forward over a sustained period of time.

The ICON Foundation

In the section above, we delved into what was essentially the era “before ICON” — meaning before the implementation of the ICON public blockchain project that we now all know and love. At this point in our narrative, we have a large basket of businesses in the technology sector, under the umbrella of Yello Mobile and the Dayli’s, and a company (ICONLOOP) building them private blockchains. As you’ll remember from Chapter 1, it’s one thing for a company to have a private blockchain. It’s another for that blockchain to talk with other blockchains.

So let’s trace the genesis of the ICON public project itself.

The ICON Foundation was formed as a non-profit in August 2017 in Zug, Switzerland.

So, with all the established business presence described above, why was there a need to launch a non-profit, rather than just have Dayli, ICONLOOP, or another of the established companies launch ICON?

ICON began with an “initial coin offering” (ICO), in order to fundraise, as well as to create the tokens (ICX) that will help run the ICON network. This process required individuals and organizations to essentially hand the foundation a pile of money. In most situations, receiving a pile of money is called “income.” From a tax perspective, this is not an ideal outcome, as a great deal of that money would likely be subject to significant taxes if it were being handed to a for-profit company.

Here is an excerpt from an insightful article regarding non-profits and ICOs:

“Even though other circumstances might be relevant, the main reason for the choice of this legal structure lies certainly in tax optimization. Indeed, while profit oriented foundations pay taxes at a lower rate than corporations, the very common non-profit foundations are, under applicable law, relieved from the payment of most of the taxes.”

Additionally, ICON at its core is a project, not a company, meaning it makes more logical sense to classify it as a non-profit, rather than a traditional business. I will examine this distinction more in just a bit.

Aside from the structure, you may be wondering: if ICON is primarily a Korean project, why is the foundation based in Switzerland?

There are likely several reasons:

  • Switzerland’s banking laws historically tend to be flexible and accommodating, and they’ve been among only a few in the world to embrace cryptocurrencies early on. Remember, ICON’s raised it’s funds with Ethereum, not fiat.
  • Switzerland’s government had enough foresight to establish clarity early on regarding regulations of cryptocurrency, especially as it relates to initial coin offerings (ICOs).
  • As a result of the above, and other factors, Zug has become what is known as “Crypto Valley,” as the region now hosts many blockchain projects and companies, which only further adds to its draw as a desirable community to begin a project.

As mentioned, in order to launch, the newly-established ICON Foundation issued an ICO. According to ICON:

- The ICON Token Sale started on Sept 20, 2017 / 13:00 (UTC+9) and successfully ended on Sept 20, 2017 / 19:33 (UTC+9).
- Overall ICON raised 150,000 ETH. 75,000 ETH was raised from “Strategic Contributors” and 75,000 ETH was raised from the Public Pre-Sale.

To a certain extent, “ICO” has become a bit of a negative concept, since a majority of them led to financial losses and poor investments. However, they play an important role in the crypto economy. As a refresher, here is a helpful description of just what they are:

“An Initial Coin Offering (ICO) is the cryptocurrency space’s rough equivalent to an IPO in the mainstream investment world. ICOs act as fundraisers of sorts; a company looking to create a new coin, app, or service launches an ICO. Next, interested investors buy in to the offering, either with fiat currency or with preexisting digital tokens like ether. In exchange for their support, investors receive a new cryptocurrency token specific to the ICO. Investors hope that the token will perform exceptionally well into the future, providing them with a stellar return on investment. The company holding the ICO uses the investor funds as a means of furthering its goals, launching its product, or starting its digital currency. ICOs are used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks.”

So now that it had all this funding just what is the ICON Foundation?

The foundation is governed by individuals who represent Dayli Financial Group, ICONLOOP, and Dayli Intelligence. The group includes top executives such as: Min Kim — CSO of DAYLI Financial Group; KJ Eee — CEO of DAYLI Intelligence; Hoon Lee — CSO of DAYLI Intelligence; JH Kim — CEO of ICONLOOP; Jay Kim — CFO of ICONLOOP. These individuals make up the ICON Foundation Council.

All of this together paints a structure that’s a bit blurry. Many have assumed the ICON Project operated as a traditional business, with a clear cut structure, and a singular entity in charge running the show with top-down directives.

With ICON (and many other blockchain projects), that simply isn’t the case. ICON, simply put, is a project. Consequently, it has many collaborators, draws resources from several entities, and generates progress through collaboration, rather than top-down directives. That’s why there is a Council instead of a CEO. While many believe Min Kim is ICON’s CEO, that’s not actually the case (here he is in a recent AMA conducted on Telegram):

People continue to think of ICON as a company. ICON is not a company, but a public project. I’m not the CEO. I don’t make all the decisions.”

I believe that the primary entities I described in the first section of this chapter all have their hands in the ICON project and play a role with the foundation. Just as the Council pulls leaders from the various entities, I speculate that resources, employees, relationships, and expertise also flow from Dayli Financial Group, Dayli Intelligence, and ICONLOOP. Each entity has something to bring to the table, and each stands to benefit greatly from a successful project.

Here is a quote from ICON providing a glimpse of the role each entity plays:

“The Foundation will contribute to the community in a variety of ways, including fundraising. theloop, one of the blockbusters in the DAYLI Financial Group, will develop ICON Nexus and various smart contracts.
DAYLI Intelligence provides DAVinCI, an artificial intelligence solution to be applied to ICON, to help establish optimal distribution policies.”

Why is it being done this way? Remember: a true blockchain is decentralized, meaning no person or entity has singular control over it. While ICON is not yet decentralized (the chapter on governance will describe the process for decentralization), it will be in the near future. At some point in time, there will be little reason for the ICON Council, and most of the team, to continue existing in their current roles.

I believe that, just like Satoshi Nakamoto stepped back from Bitcoin, the ICON Foundation will eventually step back from ICON. Just like Satoshi, they will gradually hand over the project to the community to continue building & growing the public blockchain.

Closing Thoughts

As you can see by now, the institutional support behind ICON is significant. That support brings resources, expertise, relationships, and credibility.

I’d like to expand on that last part.

There is no doubt that the world of blockchain, cryptocurrencies, and — most specifically — ICO’s has had its share of failed projects. Many of these projects failed because the teams were simply too far over their skis (as described above). Many failed because they were outright scams.

With ICON, I believe both of those options are off the table.

Based on the information above, the individuals and organizations who are part of ICON are debatably among the most prepared to enter and execute within this space. Between their expertise of running multi-million dollar enterprises, and their experience working with their clients to understand and fulfill blockchain needs, the people behind ICON are more than prepared to tackle the project’s ambitious goals. Furthermore, their direct ties to a large corporation with connections to Korea’s leading FinTech companies means that it’s in the long-term interest of ICON to execute a project that contains not a hint of the shady, opaque, and sometimes even fraudulent behavior of other blockchain projects.

ICON is directly tied to a company (Yello Mobile, the majority shareholder of the Dayli’s) that is on the verge of an IPO, which puts billions of dollars at stake. Imagine the avalanche of bad press, lawsuits, and likely criminal charges that would come with the type of negative headlines that have doomed other crypto projects.

Remember, ICON wasn’t cooked up as a scheme to make a bit of money in the short term. It is a project launched by a corporate conglomerate (which has 8-figure investors expecting value for their shares) in order to better fulfill the needs of their paying customers and clients — that’s where ICON’s long-term self-interest lies. Their many clients and subsidiaries have identified a need and desire for a working public blockchain — and they are expecting ICON to deliver it.

In the next chapter, I will delve into these personalities, as well as some of the other individuals and organizations who are working to make ICON’s dream a reality.