South Korean startup Data Republic is pioneering a smart way of investing for global cryptocurrency investors. Founded in 2018, the company has rapidly grown to offer its artificial intelligence-based financial data to six hedge fund managers in the US, Europe, Hong Kong and Singapore to predict cryptocurrency market trends and thus hedge investment risk.
“We predict prices of digital assets such as cryptocurrencies and non-fungible tokens (NFTs) from 30 minutes up to a week, with an accuracy rate ranging from late 50% to as high as 60%. As it’s widely believed in academia that 51 to 53% accuracy is very high for financial time-series data, our forecast is successful,” said founder and Chief Executive Sungmin Aum.
The startup reprocesses crypto-related information in the market, such as price, transaction volume and order books, applies the information to AI learning and creates predictive algorithms in real time through artificial general intelligence, an AI on par with human capabilities.
"Using AI, it's relatively easy to solve a problem like in the game of Go, which shows what the other person has done. But it’s difficult when you can’t see other people’s strategies, like in the Starcraft game. In the financial market where you can’t see all the exogenous variables and the rules sometimes change, it’s very hard to predict future trends using AI,” said Aum.
“We’re putting a lot of effort into quantifying the value of data and curating only useful information for market predictions,” he added. Data Republic completed the development of data quantification technology in 2019 and started providing the service in March of this year. Offering services for foreign exchange market prediction for currencies such as the US dollar and the euro, the startup is expanding its business area to the decentralized finance (DeFi) exchange and the NFT platforms.
Data Republic has so far attracted 2 billion won ($1.7 million) in investment from US-headquartered VC firm SOSV and Korea's carmaker giant Hyundai Motor Company. The startup’s profit model is revenue sharing by investing in hedge fund managers’ crypto-related funds. The startup is aiming to sell its crypto market prediction service to Korean institutional investors.
CEO Aum has a unique career history as a startup founder. In his 20s, Aum dropped out of engineering school in the US and served as a Buddhist monk in Korea for years. He returned to academia, studied AI and applied mathematics at Korea Institute of Science and Technology and Daegu Gyeongbuk Institute of Science and Technology and went on to work as a senior researcher at an AGI institute in Europe.
Write to In-hyuk Lee at
twopeople@hankyung.comJihyun Kim edited this article.
