Michael Stiegelmeyer is the President and COO for Planet Digital Partners. Since 2013, Mr. Stiegelmeyer has served as CEO of The 1441 Group, LLC and ZAGS, LLC. The 1441 Group, LLC is a business development and sales company focused on development sales and marketing for toy, video games, CE, sporting goods, and other consumable products in the U.S. ZAGS, LLC is a distribution sales company focused on opportunistic general merchandise sales with key U.S. retail accounts throughout the U.S.
AT: Can you tell us a little bit about Planet Digital Partners and the team behind it?
MS: Planet Digital Partners is a licensed publisher of console video games for Sony PlayStation, Microsoft Xbox, and Nintendo Switch. We operate most closely to an accelerator, as we partner with studios to take content or concept from start to finish, placing it in the market both physically and digitally. Our team is comprised of industry veterans who have held executive positions at some of the largest publishing, manufacturing, and distribution companies in the video game industry- including the former CEO of Take Two, the former President of PlayStation Europe, the founders of Saber Interactive, and the founder of Jack of All Games. We have assembled a team of people who have made video games very successfully for a long time. This ability to develop and deliver great consumer experiences is the core strength behind PDP.
AT: Why issue a security token versus raising via a traditional venture fund?
MS: We believe that digital securities represent a game-changing investment opportunity that will have huge impacts beyond our STO and through all markets. We feel the flexibility of a token offering versus going the VC route, allows our core group to retain the structure of decision making, provides liquidity for the investor, and allows us to give greater creative control to our studio partners. That combination of factors fit perfectly into our vision of a democratic, collaborative entity that is PDP.
AT: RKT owners stand to receive a percentage of the net profits, can you share with us some details on this profit distribution?
MS: The structure we are offering to investors is to return 80% of all NET divisible revenue to the point at which RKT Token investors are whole. At that point and moving forward, we will return 40% of NET divisible profit to the RKT tokens.
AT: What console or streaming service will these games be available on?
MS: Our games will be available on Nintendo, Sony, and Microsoft console or handheld platforms, as well as Steam, IOS, and Android. The platform mix will vary game by game, based on the validity of the content offering by format. For example, we may release a title only for Nintendo Switch, based on the user experience and and/or platform user base. We want to keep very ROI focused in releasing titles, versus trying to blanket all platforms on all titles. Luckily, we have enough people in decision-making positions who understand this approach and have been very successful in releasing content in a targeted fashion.
AT: Will these games be based on pre-existing IP, or will these games be developed from scratch?
MS: Planet Digital Partners will release a combination of new releases based on pre-existing IP as well as completely new IP. This balance of ‘tried and true + brand spanking new” is part of the DNA when it comes to crafting our portfolio. We understand that there are legacy brands that can deliver terrific sales and ROI if delivered through a new experience with familiar notes throughout. An example of this type will be when we release Cooking Mama in the back half of 2019. Cooking Mama is a brand with 14MM copies sold over its iterations life to date- and we will release this for the first time on Nintendo’s Switch platform exclusively this fall. The pedigree for success is there and the experience of the game is perfectly suited to Switch and the Joy-Con controller system. On the other side, we will be looking to bring brand new IP from award-winning studios to life. There is a tremendous amount of compelling content being built through the vibrant Indie community that simply needs an accelerator-styled boost from a partner like PDP.
AT: The whitepaper states that the business plan is to invest in games in the $10,000,000 USD range versus the blockbuster offerings by larger entities such as Electronic Arts or Activision. What’s the mindset behind this decision?
MS: The mindset there is that we see a hole in the publishing fabric, where compelling IP- as mentioned above- never gets a green light or only goes to market in a limited, digital fashion. The large, institutional publishers are focused on projects with massive development and marketing budgets. Those projects can potentially deliver the massive revenue needed to move the needle with their share-holders, and they are often built around pre-existing relationships and commitments. So, we see that there is a supply of solid content that will resonate with consumers that needs an infusion of support and guidance to be optimized. By focusing on projects that require a modest amount of investment, and doing so through an extremely lean organization, we can build to-market sales systems that deliver meaningful ROI, which provide better delivery back into the RKT token. The independent community creating video games is stronger than it has ever been- we want to enable the star projects within that community to shine.
AT: Will any of the games be using the freemium model, whereby users can play for free but then pay for upgrades?
MS: Right now ‘freemium’ is not what we are focused on. The success stories are there for everyone to see, but our focus is on delivering great gaming experiences within the box, so to speak. We also think the gaming community is starting to feel a little worn out by micro-transaction. Maybe that makes us ‘old school’, but that is what the brand is about.
AT: What’s the timeline from prototype to final release of the initial games?
MS: Every project is different, but for our games the typical development cycle is 12 to 16 months, end to end. For PDP we are bringing in a handful of ‘baked’ projects which will allow us to begin releasing games in 2019 and delivering to investors in early 2020.
AT: The whitepaper states that the blockchain will be used in these games, could you elaborate on this?
MS: Our plan is to deploy simple blockchain applications into the actual games, where it makes sense and makes the experience more compelling. One example would be in the use of blockchain private-keys. Private-keys can be assigned to each copy of the game, giving that user a unique ID. These keys would make each game subtly different and personal to the user by building an optional feature in the menu settings that allows the private-key to change the expression algorithms for characters, non-playable characters, enemies, terrain or items in the game. So essentially, each copy of the game can deliver a unique variation of the experience to each user, and can result in rare ‘mutations’ at varying rates. We believe gamers will get a huge kick out of this type of individualized experience and will want to share these unique expressions and ‘mutations’ within the community.
AT: Is there anything else that you would like to share about Planet Digital Partners Inc?
MS: We are just really excited to be bridging the worlds of digital securities and video games. We see a tremendous opportunity for investors, developers, and, ultimately, the gamers we want to build great products for. Now that the STO has begun, our focus will be on successfully closing our raise, engaging our investor base, and then making the very best video games we can in the most innovative ways possible.
Luc Falempin, CEO of Tokeny – Interview Series
Luc Falempin is the CEO of TOKENY Solutions a Luxembourg based software vendor building an end-to-end platform to issue, manage and transfer tokenized securities in a compliant way.
Antoine: Can you tell us about the Tokeny issuance platform and how it differs from competitors?
Luc: At Tokeny we are the European leader in terms of tokenization platforms. We provide our customers with the modular end-to-end platform they need to digitise their assets. For single issuers we can automate complex and cumbersome processes that are involved in the distribution of traditional securities. For multi-issuers, such as investment banks, asset managers or marketplaces, we deliver our solutions via a white-label platform and a set of APIs.
We are currently the only live platform in the market that has the technology to digitise the issuance, the compliant security transfer and the post-issuance servicing. Our compliance system is also unique, as we are the only company worldwide with an onchain validator to enforce the necessary rules and regulations that govern financial securities.
Antoine: How did you personally become involved?
Luc: I have over 10 years of experience in entrepreneurship and software development. I worked with some of the largest e-commerce marketplaces in Europe and eventually, I sold my stake in 2017. At this time everybody was talking about decentralized marketplaces, and because of my education I understand how securities work and I saw the purpose of applying blockchain to financial markets. This was when Tokeny was born, and we’ve been building the technology ever since.
Antoine: Where’s Tokeny headquartered? What made you choose this jurisdiction?
Luc: We are headquartered in Luxembourg but we also have operations in London, Paris and Barcelona. We chose to be headquartered in Luxembourg as globally it’s second in terms of money under management, with the US sitting first. In March, €4300 billion was invested into Luxembourgish funds, so of course this is a very interesting place for a company like ours. It is also one of the leading financial centers in Europe, and we are very close to the other leading cities like London, Paris and Frankfurt.
Antoine: You initially tokenized ICOs and then pivoted to offering STOs, what made you decide to pivot?
Luc: The initial vision for Tokeny was to tokenize securities. However, in 2017 the market wasn’t ready for this. So, we saw an opportunity with ICOs, and it was the perfect MVP. There was a high market demand, ERC20 tokens are simple and the compliance was straight forward too. But now it is the time to start tokenizing financial securities and for over a year we have been developing our product to do exactly this, so our technology is ready.
Antoine: How many customers do you currently have? How many new customers are you on-boarding each month?
Luc: We have more than 30 customers and currently select 2 or 3 customers per month. We are now starting to work with multi-issuers such as investment banks, marketplaces and asset managers. Technically we have the capacity to tokenize thousands of assets per month but for each project the issuer needs some guidance on the partners selection as the ecosystem is still being built.
Antoine: Which verticals are the most popular on your platform?
Luc: Equity attracts a lot of interest, but shareholder agreements can become quite complex and given the infancy of the market it isn’t the easiest asset to tokenize. However, most companies should start tokenizing debt as this is a much simpler process to issue and the benefits are immediate. Real estate is very interesting too as this is a typically illiquid asset class. By representing this asset on the blockchain, ownership can be settled in seconds, rather than the need of selling the underlying asset. The case is similar with other types of closed-end funds.
Antoine: What’s the process for a company that is interested in your tokenization services? Are there minimum requirements that they need to meet?
Luc: Yes, of course. We receive many enquiries each month but we only select the best projects and those that are asset backed. We have a due diligence process and the projects need to be led by an experienced team, KYC & AML checks on all the beneficial owners need to be processed and we require the legal documentation to setup the platform.
Antoine: Tokeny recently launched InvestorID. Can you describe with this product is?
Luc: InvestorID is a not for profit and open ecosystem allowing investors to generate their on-chain identity to access and trade compliant tokenized securities. It provides them with the platform they need to create their identity, control their personal data and enable issuers to act in full compliance. It is a single entity linking the proof of identity, so the KYC and AML segment, with the wallet of that entity. In a way, you can see it as a KYC aggregator. Under European law it is unlawful to whitelist wallets and so we came up with this method to represent investors on the blockchain and fill this missing piece of the puzzle.
Antoine: Tokeny also recently joined the non-profit Global Digital Finance Registry. What are the advantages of being a member of this registry?
Luc: The aim of this organisation is to standardise terminology across the digital assets sector. If there is no standardisation across the industry, how will mainstream adoption be achieved? They bring community members, of which includes market participants, regulators and policy makers, to contribute to the set of standards with the goal of achieving uniformity and global adoption. Educating the market is a core objective for us, and joining the GDF was something that completely aligned with this value.
Antoine: Where do you see the digital securities market in five years?
Luc: In five years time I see interoperable assets having opened a lot of opportunities and benefits. The technology will be in place to reduce the successive layers of reconciliation that are currently present in custody chains, the benefits in collateralization will be realised and the impact in terms of transferability will be present. All in all, I think there will be a much greater awareness of blockchain and its impact on financial markets. If you look at the sentiment this time last year, the attitude has changed significantly. In five years it is of course hard to predict, and easy to be over optimistic, but I think there will be wider recognition of blockchain’s impact because there will be working examples across capital markets. We can also imagine some projects like Libra bringing a lot of awareness if people start managing some of their money and assets on this blockchain.
Antoine: Is there anything else that you would like to share about Tokeny?
Luc: Tokeny Solutions is a toolbox for investment marketplaces and we provide the layer of technology needed for these players to benefit from working with blockchain. Benefits such as automation, efficiency, increase in the speed of transfer times and so on, can be achieved by these companies without building the complex technology that’s required. These markets are also lacking from digitisation, and we provide them with the tools to enable and benefit from digitizing their services. Although we are working with a number of them, there is still a huge need for digital distributors of tokenized securities.
To Learn more visit Tokeny.
Ed Tuohy, CEO of MERJ Exchange Limited – Interview Series
Edmond Tuohy is the CEO of MERJ Exchange. MERJ Exchange is an innovative end to end, multi-market global financial exchange for equities, debt and derivatives.
MERJ is soon to launch its Digital Assets and Security Token markets along with the opportunity to invest in MERJ Exchange.
Antoine: MERJ Exchange is a securities exchange that currently offers an Equities, a Derivatives, and a Debt Market. What’s the inspiration with expanding to digital securities?
ED: We strongly believe in the potential of digitization to transform the capital markets. Quite simply we think it is the future. There are 3 headline reasons why we are moving in this direction:
1) This technology can streamline everything we do in the securities markets, from issuance, to shareholder registers, compliance, distributions, voting etc. The opportunity to streamline big chunks of this workstream is very attractive and would benefit everyone involved.
2) We can dramatically reduce frictions for people who may not have participated in the capital markets in the past. By frictions I mean you won’t need a computer, or a stock broking account, or even a bank account. Many emerging markets have been empowered by the “mobile first” revolution. We want to build an access point to the capital markets that integrates seamlessly with that ecosystem.
3) We are perfectly set up for it. We operate a Regulated Market with integrated post trade infrastructure, which is quite unusual If you look at other Regulated Markets around the world, they are tied into a central clearing / central depositary model. This means lots of disparate organisations are going to have to agree on exactly how to process digital assets. We have the infrastructure and regulatory approval to bring both institutional and retail investors into the world of digital assets in a way that is compliant from end to end.
Antoine: What does the name MERJ symbolize?
Ed: I’m glad you asked that. I love the name MERJ. As much as we strongly believe in tokenization, we also strongly believe in the principles of securities laws, investor protections and regulation. MERJ is a reference to the idea of combining the best of the old world and the new. The best of traditional market protections with all the potential benefits of this digital technology. It is also a reference to the idea of merging all the layers of the settlement and custody chain. Instead of multiple reconciliations taking a few days we can look forward to one almost instantaneous transaction.
Antoine: MERJ Exchange Limited is currently the only licensed securities exchange in the Republic of Seychelles. What made you choose this domicile versus other popular offshore jurisdictions?
Ed: We are a Regulated Market – in that we provide the same function in the Seychelles as the LSE in the UK and the NYSE in the US. It’s not so much that we chose the Seychelles, more that the Seychelles needed a stock exchange and we were the right people to do it. This story began post GFC, when the IMF and the World Bank sat down with the Seychelles government and encouraged them to develop the financial services sector here. Part of that was to establish a stock exchange. We put ourselves forward to do it and have been working hand in hand with regulators here since 2011 to build an international exchange. Our listings now account for more than 20% of the national GDP, which is a key metric in evaluating the maturity of an economy. The FSA Seychelles is now an associate member of IOSCO and MERJ is an affiliate member of the World Federation of Exchanges. These are not trivial achievements and are very important when it comes to institutional investment mandates, so we are able to open this market up to widest possible pool of global capital.
Antoine: How many securities are currently listed on the exchange?
Ed: 29 equity and 2 debt. We have issuers from 5 continents and investors from 7.
It takes time to build the kind of infrastructure and regulatory standing we have here – and there are no shortcuts. We now have a great foundation for a very exciting phase of growth.
Antoine: Most of the companies listed on the MERJ exchange are African, which makes complete sense since Seychelles is often portrayed as the Cayman Islands of the African continent. Most investors in Europe will be familiar with Seychelles, but the same cannot probably be said for North American and Asian investors. Do you believe that you will need to educate STOs on the benefits of being listed on an exchange in this jurisdiction?
Ed: We adhere to the standards of IOSCO and the WFE, international investors don’t mind whether we are in London or Seychelles. We already have issuers from North America, Asia, Australia, Europe and Africa. We are going to be providing something that isn’t available elsewhere and Issuers will go where the liquidity is.
Having said that the Seychelles is actually a great story of international cooperation. There are so many reasons why Seychelles is a good jurisdiction and any STO issuer that is serious will do their research and quickly realise that. In the last 10 years the Government and regulators have worked with international agencies like the OECD and FATF to bring the Seychelles up to the highest international standards. The OECD now ranks it with the UK, Japan, Germany, USA and Australia. Since the IMF and World Bank stepped in the country has gone from a B- rating to BB. That really underlines the trajectory of the economy. Our view is that the STO market is likely to be quite borderless, but issuers are not going to want to go to a jurisdiction that doesn’t meet these high international standards, because it will attract greater scrutiny from other regulators. In the securities markets there is no regulatory arbitrage, people want clarity and simplicity, not added hassle. The Seychelles offers that in abundance, as well as an advantageous tax regime, many double tax agreements, a thriving corporate services sector, competitive pricing. If all of that isn’t enough for you it’s not the worst place to have to visit for business.
Antoine: What will be the onboarding and listing requirements for new STOs?
Ed: Our onboarding procedure follows the same KYC/ AML process as for clients wishing to trade any listed securities. As for the listing requirements, the chosen token standard has to be to be compatible with our regulations but otherwise they are exactly the same as for our traditional securities. We have 3 equity boards, a main board, an SME board and a venture board. An STO would have to choose which board was most appropriate and then meet the listing requirements. We work on a sponsor advisor model, so STO’s will work with one of our global network of sponsors to prepare them for listing. The sponsor undertakes responsibility for due diligence and making all the relevant disclosures. This is the same process that an issuer would go through to list on AIM in the UK or the Toronto venture exchange in Canada. We think it’s a great model and will work well for STO issuers.
Antoine: You recently announced that you will be launching your own security token, which will then be traded on your own exchange. What’s the expected date of this STO launch? Also do we know the hardcap yet?
Ed: First we have to list our equity by introduction on the exchange. This is imminent, and when done it will be the first equity to be listed on a national stock exchange in tokenized form. It’s really quite a major watershed point for the digital asset community. The subsequent STO will be a public offering of ~15% of that tokenized stock. We don’t want to launch the STO into peak summer so we will probably wait a couple of months now. The funds are for growth capital, largely to bring more people on board. We are very confident of our pipeline and we need additional people in operational and compliance roles to service the demand.
Antoine: What benefits will investors receive from this investment?
Ed: The benefit is a stake in an exchange which we think is one of a kind. We have the flexibility to trade, clear, settle and register securities ourselves, or plug into any other global infrastructure if it makes better sense. This in itself is unusual, and a deliberate piece of Seychelles law, which was designed to be outward looking. Consider our regulatory status, licenses, permissions, the structure of our business, the combination of regulated exchange/clearing/depositary entities, the clarity provided by our regulator and the fact Seychelles is a well respected jurisdiction with a modern financial services industry. When you look at all these factors in combination, you realise it is a very compelling, and entirely unique proposition. We have an opportunity here to build a truly world class piece of infrastructure for the next generation of capital markets. Our competitors around the world are the likes of LSE and NYSE and they are not in a position to move so quickly and decisively. There are big fish and there are little fish, but we like to think we are a fast fish! Our investors will own an equity stake in a very exciting company that is spearheading the next generation of financial markets infrastructure.
Antoine: When do you expect your first security token offering to go live?
Ed: We have a number of issuers that are keen to push the button as soon as possible. I am quietly confident that we will have done a handful before the end of the year and a couple of dozen within the next twelve months.
Antoine: Is there anything else that you would like to share about MERJ Exchange?
Ed: We have a tremendous team based in the Seychelles, Cape Town, Johannesburg and London. We are looking for experienced market professionals to join us and help deliver on our vision. If anyone would like to work in the Seychelles or Cape Town, or represent us in another region then drop us a CV at email@example.com.
Antoine: Thank you for the great interview. Anyone who wishes to learn more should visit Merj Exchange.
Mikko Ohtamaa, CTO at TokenMarket – Interview Series
Mikko is the cofounder and CTO of TokenMarket Ltd, one of the leading token sale and blockchain crowdfunding platform at Gibraltar. Mikko has advised dozens of blockchain startups. He is also the former co-founder and CTO of LocalBitcoins, a peer-to-peer cryptocurrency exchange. Mikko holds MSc. in industrial engineering and management from University of Oulu. Mikko actively engages in open source communities and speaks in conferences. He is a cofounder of Pycon Finland, a Python programming conference. Mikko is also a member of Plone Foundation, the oldest of open source non-profit foundations.
AT: You’ve been in the crypto space since 2011. Could you share with us how you first became involved with cryptocurrency and blockchain?
Mikko: Back in my mobile software development days, I was asked to develop the first and original Bitcoin mobile wallet back in 2011 compensated by $10,000 worth of Bitcoin. I rejected it as I thought fiat would suffice at that point in my life. In hindsight, taking this offer might have been the last project I needed to do. Later I got involved in building out LocalBitcoins and from there I moved to establish TokenMarket.
AT: You’re listed as one of the original co-Founders of TokenMarket. What inspired you to launch this marketplace?
Mikko: The original goal of TokenMarket was to tokenise company shares. However, back in 2016, it was way too early for that. The term “token” had just been invented, many referred to tokens as ‘coloured coins’ looking at new digital assets as bitcoin with different ‘flavours’ and ‘colours representing different token attributes and purposes’.
We saw the ICO boom coming a little bit earlier than others in late 2016 when FirstBlood, Gnosis and other Ethereum based ICOs started to roll out. The catalyst was that the Ethereum technology had matured to the point that it was realistic to launch custom tokens with it. And oh boy, a lot of tokens were launched.
TokenMarket had the first tokenisation platform in the world and suddenly there was a spike in customer demand.
AT: When inspired TokenMarket to pivot from ICOs to STOs?
Mikko: I would not use a word pivot here. Security tokens are a natural continuum for unregulated token offerings. It is always better for investors themselves to get something with stronger investor rights. Securities offerings give investors rights which utility tokens never legally could, such as receiving dividends, yields and voting rights in the company you purchase a security from. For the investors, receiving passive income with security tokens becomes so much easier rather than moving toward a largely unstable and volatile utility token dragged up and down by bitcoin price.
Since 2016, it took some time for the global audience to learn about the benefits of tokenisation, including financial regulators. Now we are seeing interest from regulators worldwide on how to apply DLT and blockchain technology to regulated securities markets.
AT: TokenMarket recently announced a partnership with Loopring which is a protocol for decentralised token exchanges. Could you tell us more about this and what we should expect from this partnership?
Mikko: Loopring is one of the industry leading projects developing layer two scalability for decentralised exchanges and we will use Loopring’s technology to scale our own DEX.
As you might know, at the moment, decentralised exchanges have scalability issues and cannot match the volumes of exchange giants such as your Bitmexe’s and Binance’s. But from other aspects, decentralised exchanges are more secure and fair. Bitcoin exchanges get hacked every two weeks. Some exchanges are accused to trade with insider information and against their own users. Regulators like the decentralised aspects, as they guarantee that all the investors and traders can access the post trade data in equal manner, there cannot be irregularities with accounting and trading with something that is merely fabricated.
The good news is that the security tokens will have low liquidity, like Bitcoin back in 2012, when they start to roll out for trading. But for the future exchange technology, we want to build it better and more bulletproof what both traditional trading and crypto trading has today. We see the academic research and theory that allows us to get there, now it is just engineering over the next few years to fulfill this promise.
AT: Can you tell us what the listing requirements are for companies who wish to crowdfund via the TokenMarket platform?
Mikko: There are many crowdfunding platforms out there which operate on a ‘cater for all’ thesis, TokenMarket operates on an industry specific focus. We mainly look for global growth companies in sectors such as fintech, gaming and software services as this is what our investor audience has looked for in the last two years.
We mainly look for companies which are close to, or already have, some substantial revenue generated with a key commercial focus on B2C businesses.
AT:TokenMarket is current raising their own STO. Are you happy so far with the progress of this raise?
Mikko: This is a pilot raise under the UK’s regulator, FCA, sandbox. We need to demonstrate them that tokenised equity crowdfunding works: payments goes in, people get their tokens and are properly registered in Companies House as shareholders.
We do not expect huge intake of money for our pilot project due to the UK’s FCA’s Sandbox test limitations. Awaiting regulatory approval we will be able to raise up to €8M from self-accredited investors for all our STOs with no private funding cap restrictions.
AT: Are there any STOs that are launching on TokenMarket that have you personally excited?
Mikko: Yes there are! But at the risk of publicly endorsing or soliciting a securities investment go check out our pipeline of projects here.
AT: Where do you see the marketplace in 10 years?
Mikko: The change and transformation is not just about the technology or blockchain. There is an ongoing process of how new investors, millennials behave. There is an ongoing process to dial down the regulation for SME listings since the last financial bubble, especially in Europe. Then there is a change in globalisation as the future powerhouse economies of the world may come from countries like Brazil, Indonesia and Nigeria.
The future investing is going to be more “marketplace driven” and less about relationships and network centric models. We are going to replace Silicon Valley and their venture capital networks with a website like Amazon did for retail commerce. Ironic, is it?
AT: Is there anything else that you would like to share about TokenMarket?
Mikko: If you are a high tech company looking for funding, contact us. If you are a fund, a family office or similar looking for alternative investments, contact us. We do not care which part of the world you come from. We want to create an equal playing field for opportunities and investors all around the world.