Zoe Adamovicz is the CEO and co-founder at Neufund. She is an experienced entrepreneur and occasional angel investor.
Zoe is passionate about building technology businesses that are impactful, positive and at the same time profitable and powerful. Prior to Neufund, she founded Xyo, a company that re-imagines how people discover apps, Priori Data (app store intelligence), and Concise Software which provides software development and engineering services.
RS: Neufund has been described as a “stock exchange without the operator in the back”. What kind of similarities and dissimilarities has Neufund to a traditional stock exchange?
ZA: On one hand, Neufund provides companies with a technical ecosystem that allows them to tokenize their equity, and on the other hand it serves as a primary market for securities offerings, making it easy for companies to conduct a quasi-IPO on Blockchain. The latter may remind investors of the typical role of a stock exchange. However, secondary trading of such tokenized securities is happening outside of the Neufund platform. Equity which is tokenized through our protocol is ERC20 compliant, meaning that on a technical level it is possible to trade the tokens on any crypto exchange.
RS: What is the advantage of conducting a quasi-IPO on Blockchain over going public on a typical stock exchange?
ZA: Conducting an STO is much more accessible to companies than going public on a traditional stock exchange. You can conduct a public offering on Blockchain at almost no cost and at any stage of growth. It is interesting to observe, which gap in the existing fundraising market STOs will fill. We think it is a natural fit for a pre-IPO stage, when a company is too big for a typical VC round, and too small to file for an IPO.
Going public on Blockchain carries different benefits both pre- and post-offering. Companies no longer need to involve multiple middleman on the various stages of their offering, their cap table is updated in real time and investor can now manage their assets with greater flexibility. Also worth noting is the programmability of tokenized assets, which means that issuers can include utility functions in the asset itself such as automated dividend distribution. At the same time, making a public offering on Blockchain includes all typical advantages of going public, as well as the ability to conduct secondary offerings easily.
RS: What types of investors do you think will be attracted to Neufund’s ecosystem?
ZA: During our recent and also first Security Token Offering we have attracted a very diverse group of investors, which includes prominent venture capital firms like Atlantic Labs or Freigeist Capital, as well as angel investors, many of whom had no previous experience in this area. We find this especially interesting with the ongoing debate in mind on how Blockchain will impact the venture capital world. To us, conducting the offering on Blockchain isn’t contrary to typical investment rounds but rather enhances them, bringing much needed liquidity which so far only existed in capital markets.
But that’s not all, we also receive wide interest from many crypto and retail investors. The former see Neufund as a safe way to invest their crypto capital, while the latter appreciate the ease with which they can make their investments and manage assets at a later stage.
RS: Why is Neufund a good platform for investors to make their investments?
ZA: Neufund serves as a market with different offerings, coming from different companies and we encourage all of the investors to review each opportunity independently. However, all equity tokens offered through Neufund have similar advantages over paper-based assets that are known from traditional markets.
First, token holders will potentially have, once regulated, access to a global pool of investors across multiple secondary exchanges which potentially increases liquidity. Second, they are programmable assets which makes it possible to embed utility functions such as automated dividend distribution or voting mechanisms. Third, one real world asset can be represented by many tokens which lowers barriers to entry for retail investors.
What makes Neufund stand out from the crowd of primary issuance platforms, many of which were created over the last months, are our unique token economics – for every investment conducted through our platform investors are becoming economical co-owners of the Neufund platform itself, and thus can claim shares in the revenue that we generate. We often compare it to investing through NASDAQ in Facebook, but on top of equity in Facebook investors get a piece of NASDAQ itself.
RS: What types of companies are best suited to launch with Neufund?
ZA: We have a lot of companies in our pipeline and many more businesses which showed their interest in fundraising with us. Eleven of those were already publicly announced in 2018. They are at different stages of growth (seed, series A, B, D) and with different products (Banking, IoT, Mobility). What is important is that they don’t have to be necessarily connected with Blockchain.
RS: Why should companies launch on Neufund versus other competing platforms?
ZA: First, Neufund stands with the crowd, as we aim to make the offerings accessible to people from across the globe with different financial status, with a minimum ticket as small as a couple of hundred euros. This makes it possible to address the offering to a global community of investors. Secondly, we provide the companies with full technical and legal support over the course of the preparations for their Security Token Offerings, for instance, we are providing them even with a prospectus template, if needed.
RS: Last summer you partnered with MSX (an innovation division of the Malta Stock Exchange), how will this benefit Neufund? And you also announced a partnership with industry leader Binance last summer, could you tell us more about the Binance partnership and what it entails?
ZA: Both partnerships aim to bring much needed liquidity and create a complete environment for the issuance and, at a later stage, secondary trading of the security tokens issued through Neufund’s set of protocols.
RS: What is the biggest challenge that Neufund faces with the launch of your first security token and how do you plan to overcome that?
ZA: We have faced most of the challenges at the pre-offering stage. It included making sure our legal architecture is compliant and technical solutions secure. Now, that the tokens are about to be released, which will happen after the signing period, we focus on building the governance system and the UX around it.
RS: Neufund did an ICO in 2017 and raised approximately $15M. What will happen to the utility tokens when Neufund launches the new equity token?
ZA: During our ICBM (Initial Capital Building Mechanism) we have managed to secure an equivalent of €12.5m. It is important to note, that Neufund had no access to those funds. The committed ETH and EUR got locked on a smart contract and investors will be able to invest them into coming offerings placed through Neufund. In exchange for their early commitment investors have been rewarded with NEU tokens, that represent economical co-ownership in the platform. With those, investors can claim their share in the revenue Neufund makes.
RS: You’re based out of Berlin which has a great blockchain community. Has this community helped foster the development of Neufund?
ZA: Yes, absolutely. Neufund is surrounded with an amazing community here in Berlin which offers access and the support from top minds in Blockchain development. Germany is at an interesting intersection between traditional VC, innovative spirit of startups and a regulatory gateway to the EU.
RS: Is there anything else you would like to tell the readers about Neufund?
ZA: Blockchain is one of the greatest opportunities we’ve been presented with in modern history. Decentralization is ultimately about equalizing opportunities, so a young entrepreneur from the third world receives the same access as a wealthy investor. Building solutions that perpetuate the mistakes of existing markets solely for the purpose of increasing revenues is not enough. We, as a Blockchain community, can and should do better.
Saum Noursalehi, CEO of tZERO – Interview Series
Before becoming CEO of tZERO, you were President of Overstock, a leader in ecommerce and one of the first Fortune 500 companies to accept Bitcoin. When did you first hear about Bitcoin, and what was your initial impression of this technology?
I first heard about Bitcoin in 2013 at a dinner party, and was fascinated by the technology. I did not actually invest in bitcoin until 2014 when I started to learn more about it, which was after Overstock signed a deal with Coinbase to accept it as a payment option.
Could you let us know how you transitioned from being President of Overstock, to CEO of tZERO?
I worked at Overstock for nearly 14 years, holding a number of leadership positions in a variety of functions at the company, including technology, product development, R&D and marketing to name a few. Having studied Computer Science in college, I have always had an interest in technology, particularly artificial intelligence and blockchain technology. When the opportunity arose to become the CEO of tZERO, I could not pass it up. My time at Overstock provided me with a strong understanding of product development, leadership and what it takes to run a business, which cultivated my professional identity as a product-focused leader. As a senior leader at a publicly-traded company, I had deep exposure to capital markets and opportunities for transforming the current ecosystem. I believe that this experience and my interest in innovative technology allowed me to transition the blockchain-based capital markets space without too much difficulty.
Patrick Byrne recently offered his resignation as the CEO of Overstock. How will this impact both tZERO and its parent company Medici Ventures?
As I said in my recent letter to investors, I was sad to see Patrick go. He is the founder of these organizations, however, his resignation has not impacted tZERO and Medici Ventures’ day-to-day operations or the execution of our roadmaps. Jonathan Johnson, who continues to be the Chairman of tZERO’s board and President of Medici Ventures, assumed the role of Interim CEO of Overstock. Jonathan is a great leader and a champion for blockchain and its potential as a contributor to evolution in a number of ecosystems, particularly its application to the capital markets through tZERO. Jonathan and the Overstock/Medici boards are committed to tZERO and our long-term success.
In July the OSTKO digital preferred dividend was announced. Can you explain the rationale behind this and how it will help to onboard new clients to tZERO?
In July, Overstock announced its intention to issue a dividend to its shareholders in the form of new shares of Digital Voting Series A-1 Preferred Stock, OSTKO. A number of OSTKO shares currently trade exclusively on the PRO Securities ATS, operated by a wholly-owned subsidiary of tZERO, and Overstock expects the new dividend shares to likewise trade on PRO Securities ATS. The dividend will be payable at a ratio of 1:10, meaning that one share of Series A-1 will be issued for every ten shares of common stock, Series A-1 or Voting Series B Preferred Stock held by all holders of such shares as of the record date.
This dividend has the potential to introduce tens of thousands of Overstock shareholders to the PRO Securities ATS. In addition, it has brought interest from many broker-dealers that would like to trade such securities, which in turn will introduce all of their clients to our platform. One of our key priorities is to introduce more investors to the platform, and this should serve as a catalyst for enhancing liquidity. The dividend is currently in the process of SEC registration and Overstock is working actively with the regulatory authorities.
Ravencoin was the third cryptocurrency added to the tZERO app. Why Ravencoin?
Ravencoin is one of the fastest growing cryptocurrencies. Additionally, Ravencoin is philosophically aligned with tZERO in making it easy to digitize assets and make them freely tradable. Ravencoin technology allows for straightforward issuance and on-chain transfer of any digital asset, including security tokens, making support for RVN cryptocurrency a natural fit for tZERO’s Crypto app.
PRO Securities is currently conducting due diligence on security tokens that utilize Securitize’s DS protocol, and we are excited about this potential to offer new assets, which will in turn attract new investors. We are aiming to have additional tokens trading by the end of the year.
You’re aiming to launch the first regulated National Security Token Exchange with Box Digital Markets sometime in 2020. Can you share with us some details regarding this partnership, and how it benefits tZERO?
We continue to work with our partners at BOX Digital Markets (BOX) on launching the first regulated national security token exchange through our joint venture, the Boston Security Token Exchange (BSTX), in 2020. With BOX’s experience in building and operating a sophisticated securities exchange and tZERO’s industry leading blockchain technology, we have brought together our organizations’ combined expertise to fundamentally improve the marketplace for digital securities. We continue to make progress and work together to establish a technical and regulatory structure that will be in place ahead of the launch of the exchange.
Where do you foresee digital securities being in five to ten years, and tZERO’s role in this?
Within five to ten years, I expect capital markets to evolve into a blockchain-based ecosystem where not only equities and fixed income on Wall Street will be tokenized, but also other non-traditional assets, such as real-estate, film, art, sports teams, athletes or anything of value. Blockchain technology has great potential to increase transparency, reduce friction costs, enhance regulatory compliance and reform the role of traditional market participants. The average retail investor will have access to the types of assets that were previously reserved for just the wealthy or connected. I see tZERO spearheading the effort of providing a platform for the next generation of asset trading.
Is there anything else that you would like to share about tZERO or Medici Ventures?
Medici Ventures is committed to advancing companies focused on blockchain technology, and tZERO is the crown jewel of Medici Ventures’s global keiretsu of companies. At tZERO, we continue to work toward our vision of creating a robust ecosystem powered by blockchain technology for investors to have venues to buy and sell digital assets (the PRO Securities ATS, tZERO’s Crypto App and, once established, BSTX), integrating the technology to tokenize assets (tZERO’s tokenization protocol technology) and establishing direct relationships with customers (subject to our wholly-owned subsidiary becoming approved as a retail broker-dealer).
Thank you for this great interview.
Daniel Liebau, Founder of Lightbulb Capital – Interview Series
You’ve recently written a research paper entitled ‘Cryptocurrencies & Initial Coin Offerings: Are they Scams? – An Empirical Study‘. This paper argues against the conventional wisdom that the bulk of ICOs launched in 2016 were scams and that in fact, most were legitimate initiatives. Do you believe that this would hold for the 2017/2018 ICO period?
Hello Antoine, Thanks for having me today. It’s a pleasure.
With regards to the “ICO Scam paper” that I have written together with my co-author Prof. Dr Patrick Schueffel I’d like to think about almost like a conversation starter. There are lots of opportunities to deepen our understanding of the topic. Running our research process on 2017 and 2018 ICO data is one of the recommendations we added towards the end of the paper. I am discussing with various universities, also with a prominent law school in Asia, to execute this.
Then we want to proceed with the development of the ‘Crypto Scam Probability Index’ that could give traditional financial services firms a tool to assess projects. It could be useful for custodians, asset managers and banks and their clients alike. At this stage all I can say that 2.2% of, say, 5000 ICOs is still 110 projects… a number high enough to build tools and processes to protect investors from scammers.
What’s your take on IEOs? Is this an improvement over ICOs?
Thank you for this great question. Mostly, utility token projects do not deliver a service to their stakeholders at present. Therefore there is no real demand for tokens. We have speculators trading against speculators. I think we need to watch what exchanges do carefully. Some of them have taken measures to implement control mechanisms, especially with regards to their listing governance. This is probably positive and adds to their maturity. At the same time, I am sceptical when I see that listings departments also have sales targets. Even more concerning is that in some cases IEOs have to be paired with the native exchange token.
I ask myself if this drives the demand for the exchange token artificially? I also wonder how exchanges manage conflicts of interest. For example, how can exchanges have VC funds that invest in projects that eventually list of their market? Again, I believe that over time, we will see a lot more mature operations succeed. In the traditional markets, not anyone can be the CEO of an exchange, and that is for a good reason. I look forward to trading platforms taking things like trade surveillance and governance a notch up from where we are now to impart investor confidence.
Lightbulb Capital has partnered with SMU (Singapore Management University) to offer an introductory course on digital assets and cryptocurrencies. In your opinion, what are the biggest takeaways that students should take from this course?
Thanks for bringing this up. First of all, I believe in experiential learning so that participants can expect loads of work and little one-way lecturing. I do like to invite industry-leading guest speakers, too. Three main points:
1) Utility Tokens are (ideally) not issued by a company but by a community or foundation.
2) Students learn the basics of blockchain technology, hashes, consensus algorithm, private/public key and the trilemma (scale, security, decentralization) and many more.
3) We aim to impart some confidence so that participants understand the risks and opportunities of this emerging field – critical thinking being essential.
We are also expanding the course from 1 to 2 days because it was simply not enough time to build a strong foundation.
You are involved in the world of academia, both teaching and research. Do you believe that most schools are adequately preparing the next generation for the current advancements in fintech? If not, what should be done differently?
There is always the opportunity to improve. I think one thing that universities are generally not so strong in is speed. SMU, where we started the first FinTech class more than three years ago, is part of a small group of institutions that represent the exceptions. Rotterdam School of Management at Erasmus University is very strong on the business administration research side as the latest Shanghai report confirms. The research process in general is too slow for our exponentially accelerating times.
Coming back to teaching: I think some topics can be taught very well using digital media. If you want to learn about data science, for example, explore the offering of the newly launched FDP Institute. Mehrzad and team provide a fantastic platform to learn more about how to use data science in finance. Some topics can only be taught in a classroom, mostly the ones that require teamwork. Take Service Design Thinking. We happily work with corporations and Universities to deliver such hands-on programs. There is always a focus on action to ensure people can immediately apply what they have learned in their own work environment. Unfortunately, some universities still focus on learning facts by hard to test them during exams. I feel that is probably antiquated.
Lightbulb Capital offers speaking engagements on AI, and you are personally well-read on the subject. Do you foresee a future where AI has more influence on fintech?
To clarify: I am at best a beginner level student of AI. It will take a few more years for me to have true in-depth understanding of this enormous field that goes way beyond Machine Learning. Machine Learning itself has become such a vast area itself. From what I can tell now, AI already has a substantial impact on the world of finance. This impact exists mostly due to easy access to enormous amounts of data and exponentially growing computing power. For example, look at what Marcos Lopez de Prado at True Positive Technologies and Cornell University does. It makes clear that plain vanilla statistics alone does not cut it in financial markets. Check out this latest paper if you are interested: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3365282. One topic that we will hear a lot about in the next 12 months is the ethical use of AI in Finance, especially in Financial Markets. Ethics is something regulators, CxO level folks and other market participants, as well as end clients, have to think about deeply. Exciting times and I am looking forward to contributing to the discussion.
Security tokens are currently popular with tokenizing venture funds and real estate. What are some use cases that you are personally seeing?
Security tokens – indeed a fascinating topic. I am currently working on a research project to explore this area more. It’s early days but a few takeaways. One of the leading digital asset databases compiled by the International Token Standard Association (ITSA), which we are a proud Associate Founding Member of, contains 600 tokens in total. Only 30 of them are classified as an investment or security token. Second, I do understand that due to fractional ownership assets that used to be difficult to access, such as fine art, are now more accessible. At the same time, with the well-known restriction to accredited investors who understand valuations, we really need to ask ourselves who will provide that liquidity? Who will buy these tokens? Until I see liquid STO markets on electronic exchanges, I dare to believe that there might be a wrong expectation in the market. The above does not mean that I do not think that this is a very inspiring space with much potential in the future. I am keen to see the opportunities in traditional, listed, equities, too. The instant settlement could free large amounts of capital that is “stuck” right now. Also creating diversified portfolios no matter how small your investment amount is, could be a massive step in terms of financial inclusion.
You’re based out of Singapore which is an influential hub for cryptocurrencies. Do you foresee Singapore taking the lead ahead of Switzerland or Malta? I am thinking in terms of adoption of crypto, and businesses being headquartered there?
It is hard for me to predict who is going to lead. I only have done minimal research on Malta. I do advise anyone who asks to think carefully and then chose a mature jurisdiction. In Switzerland, share registers are maintained by the issuers. So they can sit on the blockchain. This is key for the swift development of the security token ecosystem. In other countries, share registers are maintained by a government agency. Switzerland is also home to a number of exciting companies like Sygnum, Daura, MME and Metaco.
On the other hand, Singapore has arguably one of the most, if not the most, forward-looking Financial Services regulators in the world with MAS. It is exciting to watch how they combine sound risk management and investor protection with Innovation like few others in the world. In addition to that, Singapore’s other government agencies like, for example, IRAS, the tax authority also leads when it comes to utility token taxation. I might be biased, but Singapore is already in a dominant position. What excites me about Hong Kong are the execution-focused entrepreneurs like, for example, HEX Trust in the custody space.
What are you most excited about in this industry?
I am fascinated by the fact that everything moves so swiftly. I am by nature a curious person so the never-ending updates and developments globally I find superb. If I had to name one particular area, then it is that I see how more and more initiatives are now working on “how to get the rubber on the road”. Adoption and execution move to centre stage and unrealistic “getting rich quick” topics fade away. I think this is positive. Yesterday the German government announced a Blockchain strategy as a country. In The Netherlands, I am supporting the 2tokens project that looks at adoption through a financing lense. In Singapore, I look forward to helping the Blockchain Enterprises & Scalable Technologies Association. It is early days, but we are thinking about how to enable people to take full advantage of blockchain.
Is there anything else that you would like to share?
Thanks for this opportunity. Yes, I want to encourage everyone to read more academic research to complement the rare pearls of wisdom on Medium. Here are three relatively new journals to check out:
Passionate individuals who push for evidence-based research are running these up and coming publications.
Finally, thanks for having me Antoine and I hope we can stay in touch and talk again.
BIO: Daniel (Dan) is the Founder of Singapore based Lightbulb Capital. The firm was founded in 2014 in Hong Kong to help realize the potential of innovation and novel technologies to transform financial services. Today the company is a corporate finance boutique with a focus on FinTech and blockchain.
Dan is appointed affiliate faculty of Singapore Management University for Innovation in Finance, FinTech, Blockchain, and digital assets. He is also a visiting professor at IE business school in its top-ranked Master in Finance program. He is also a Review Editor for Frontiers Financial Blockchain academic journal and works on research projects. In addition, he is a frequent speaker at seminars on Blockchain and Innovation in Financial Services. Before starting the firm, Dan was Chief Operating Officer (COO) and an Executive Director of HSBC Securities (Singapore) Pte Limited. He was previously also the IT Head of HSBC’s Investment Bank in Singapore and Japan. Dan has over 19 years of Investment Banking Technology experience at UBS in both Germany and the UK, Barclays Capital in both Singapore and Tokyo, as well as Close Brothers in Frankfurt, his hometown.
He is also a Ph.D. Candidate within the Finance department of Rotterdam School of Management, Erasmus University where he researches Blockchain and AI and it effects on Finance. Previously he graduated with a Master of Science in Innovation from Singapore Management University and holds a Master in Finance from IE business school in Madrid, Spain.
Moresh Kokane, CEO of Konkrete – Interview Series
Moresh Kokane is the Founder of Konkrete, he has worked in the finance and tech sector for the last decade and previously successfully launched two start-ups.
In 2014 you launched Estate Baron, one of the first real estate development crowdfunding companies in Australia. What inspired you to combine real estate with crowdfunding?
I had worked in the US for about 9 years before moving to Australia. I had already seen the rise of Realty Mogul and Fundrise in the US. Australians are far more in love with real estate than the US with each Australian being 3 times more likely to be invested in real estate than an American.
Real estate being a lumpy asset is an ideal fit for crowdfunding which allows people with smaller amounts to participate. Doing real estate equity crowdfunding in Australia was really a no brainer.
When it comes to Estate Baron, are profits derived from the developer or the investor? Could you share some details on the profit model?
We provide 3 key services.
- Given that it is a securities offering, we help structure the offer documents. What we have been able to achieve is a commoditization of the process. Real estate projects fundamentally share the same lifecycle. Acquire land, decide what to build on it (plans), construct and sell (or hold for long term). Doing a full retail securities offering can be quite tedious but given the repetitive nature of the business model, we were able to come up with templates which allowed us to drive the cost of compliance down significantly.
- We also turned our tech into a SAAS platform, whereby each developer can use their own front-end skin on top of our backend. This allows them to promote their own offers under their own brand to their clients. On Estate Baron itself we can list all the offers as a quasi-aggregator.
- And we also offer investor promotions for select offers.
There is a flat fee for the drafts, a recurring charge for the tech and a % of funds raised capital raising fee.
It seems that Konkrete was a natural evolution of Estate Baron as it offers a distributed share registry designed for the real estate sector. For readers who are unfamiliar with this, could you explain what a distributed share registry is, and the benefits it provides investors and developers?
Konkrete is fundamentally Estate Baron v2.0
On Estate Baron we had a full investor portal where we had online application processing, project information pages, share registry, investor updates etc.
We are keeping 100% of the retail financial licensing and compliance from Estate Baron, bulk of the tech and swapping out the backend centralized share registry with a distributed one.
Each offer is typically setup as a Public unlisted company and legally maintains its own registry. A registry as you know is a record of all the shareholders, how much they own, etc. Typically, these are maintained centrally.
Using a blockchain enabled registry has a few significant advantages. The first is transparency, it also brings a wider reach of investors on the global crypto markets and it makes liquidity simpler.
But what we are really excited about is smart securities. By putting the investment operations on the blockchain we can give investors real time insights on how the money is being spent. Instead of sending money to a bank account, we can receive stable coins in a smart contract wallet. And instead of bank loan drawdowns we can trigger funds release automatically based on certain events triggered by Oracles.
What it means for the project is real time, automatic disclosure which reduces cost of ongoing compliance. And by introducing transparency and immutability to the operations we can generate a lot of trust in the ecosystem. Coupled with a wider reach and liquidity this drives down the cost of capital for the venture.
Note that while we are focused on real estate, the underlying legal structures and technology can be used for any other ventures which are unrelated to real estate as well.
One of the stated benefits of Konkrete, is reducing the housing affordability crisis, could you walk us through how this works?
Konkrete being an evolution of Estate Baron aims to do something about housing affordability. We intend to make home ownership affordable through 2 main approaches.
The first is fractional ownership of the house you live in. Instead of buying the entire house and loading up on debt, if we can allow people to live long term in a house that they co-own alongside other investors that reduces the upfront outlay a buyer must make. It also gives investors the opportunity to buy a piece of real estate by not having to stump the entire amount.
Second is the supply side. House sticker prices include a hefty development profit. If we can get people to do co-development for the houses they wish to live then the development profit can be passed back to them. This model is already quite popular in Berlin, Germany and these syndicates, collectives are springing up in Melbourne as well.
By bringing together more people online and allowing them to achieve consensus in a decentralized fashion, we can replace the developer.
Finally, we are working on a real estate backed stable coin as our long term moonshot. That is something we always keep one eye on.
What are some of the different solutions and products that Konkrete will be offering?
We continue to offer fundraising solutions for real estate projects. The same model can be applied for non-real estate fundraising as well (Public company and prospectus). We have already done offers in Australia, New Zealand (both full retail) and US (Reg D accredited).
We are also going beyond security tokenization and looking at the Asset tokenization model. One of the limiting factors of securities tokenization is the jurisdictional limitations one has. We must qualify investors etc, restrict distribution. Also, while public companies and registered managed funds in Australia are allowed to maintain their own registries, exchange listed funds have to be recorded on the exchanges central registries.
The SEC is adamantly against non-custodial security structures. So, there are limitations to where an STO can take us.
However, the real opportunity lies in Assets which are recorded in a peer to peer fashion. Hence the repositioning to an Asset tokenization platform.
We have already launched an invoice factoring market place based on the Asset tokenization premise called factorium.co that is built on the Konkrete technology platform.
(Use the invite code: factorium for early access to the closed beta.)
Konkrete has a utility token, The Konkrete Token (KKT) – an ERC-20-based token – which powers the Konkrete platform. Could you tell us more about the KKT token and how its intended to be used?
KKT is an platform level token. We are still nutting out a few things in it in terms of whether we should contemplate going down the path of our own chain. In the short run, each application built on the Konkrete tech is likely to have its own token.
For instance Factorium has Factor tokens, which we use to incentivize users to submit invoices for sale on the platform. The tokens are also used to incentivize verification of these invoices by the buyers. Buyers are also rewarded for repaying on time.
The investors use Factor tokens to pay for transaction fees and use of the platform.
You are currently selling shares in the foundation company (Konkrete Distributed Registries Ltd ACN 617 252 909) When is the offer closing and what’s the expected raise amount?
We are currently live on Bank to the Future platform. We are open for another couple of months and are only raising a small amount $500,000
We are currently generating revenue and have much of the product ready.
What are the financial benefits that will be offered to investors? Also, will these shares eventually be tokenized?
Absolutely the shares will be tokenized. Shareholders are becoming part owners of the business and will share in the capital gain and will receive regular dividends which we intend to programatically distribute via smart contracts. All our revenues will be fed into smart contracts and we intend to turn our own operations into a transparent dAPP.
What will these raised funds be used for?
These funds will be used for further refinement of the tech and driving user adoption.
Is there anything else that you would like to share about Konkrete?
Unlike a number of other portals, we are an existing profitable business that has been around for a few years. We have been in the crowdfunding space for ages and have a strong understanding of the regulatory frameworks. We know what works in this space and what does not. In addition, we also have bulk of the tech ready and also a strong investor community already using us. We do the tech but also the issuance of the securities inhouse which puts us in a unique position. We have a solid team in terms of Sean my cofounder who is taking charge of the operations.I am quite happy about our positioning as an Asset tokenization portal and am excited about the launch of our first product built on Konkrete which is Factorium.