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Investing in Kentucky Bourbon with Wave Financial

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Tokenizing Drink

Investors will soon be able to gain exposure to a new type of asset through an upcoming fund – Whiskey/Bourbon backed digital securities.

This endeavour is being undertaken by a trio of companies – Wilderness Trail Distillery, Wave Financial, and Vertalo.  While the distillery will provide the product, Vertalo will provide the tech for tokenization, with Wave facilitating, and managing, the fund.

Naturally, as these Whiskey backed tokens function as digital securities, they are subject to strict compliance measures.  Among other things, this means that only accredited investors may participate in the sale, and the tokens must be placed in an SEC enforced 1 year moratorium.

While Wave has not released any details surrounding future markets for trading, they indicate that they are in talks with various secondary exchanges.  Ideally, investors will see their tokens supported on a variety of exchanges, upon being freed in 1 year.

Wave Kentucky Whiskey 2020 Digital Fund

This opportunity being afforded to investors is being called the ‘Wave Kentucky Whiskey 2020 Digital Fund’.

The following are a few details surrounding the fund.

  • Up to 25,000 barrels
    • Equates up to 4 million bottles of bourbon
    • Worth up to $20 million
  • Stored and maintained by the distillery
  • Value calculated quarterly

While returns can never be guaranteed, Wave expects for their selected Bourbon to result in their fund providing investors a 20% internal rate of return, over a 6 year span.

Bourbon vs. Whiskey

Terminology surrounding alcoholic beverages is not as simple as one would think.  For example,

  • Champagne is sparkling wine, but not all sparkling wine is Champagne.
  • Cognac is brandy, but not all brandy is Cognac.
  • Bourbon is whiskey, but not all whiskey is bourbon.

Confused yet?  Much of the subtleties surrounding terminology of these drinks is due to the region in which they are made, or subtle differences in composition.

With regards to Bourbon vs. Whiskey, there are a couple of key traits that distinguish the two from one another.  While Bourbon is indeed under the Whiskey family tree, it is a specific subset which can only be designated as such if the following parameters are met:

  • Made in the United States
  • 51% corn
  • Charred Oak barrels
  • No Additives
  • <160 proof upon distillation
  • Barreled at 125 proof
  • >80 proof upon bottling

If your ‘Bourbon’ doesn’t meet these parameters, you’re just drinking Whiskey.

Unique Assets

As the digital securities sector continues to grow, and more people become aware of what it is, we are seeing an increasing amount of unique asset classes getting attention.

While real estate and debt instruments remain quite popular, we have covered various alternate assets over the past year.  The following are just a few examples of this:

Basically, anything that is expected to either keep, or increase in, value over time, is now being given consideration for exposure through monitored funds.  Whiskey is simply the latest in this trend.

Wilderness Trail Distillery

Operating out of Danville, Kentucky, Wilderness Trails Distillery offers premium handcrafted spirits.  Their processes see their products distilled, aged, and bottled, on site.  These products cover a variety of taste buds, for those looking for anything from Bourbon, to Vodka, Rum, Rye, and more.

The company was founded by a pair of individuals; Pat Heist and Shane Baker.

Live Demonstration

While the bourbon to be tokenized in this fund is being provided by Wilderness Trail Distillery, the technical side of the process falls on the shoulders of, both, Wave and Vertalo.

As stated, these two companies have a history of working together.  In an effort to demonstrate what this working relationship is able to offer potential clients, the pair recently hosted a webinar.  In this live demonstration, the pair touched on the following, and more.

  • Onboarding cap tables
  • Tokenizing Assets
  • Choosing token providers

To learn more, and see first-hand just how easy the tokenization process has become, make sure to peruse the following article.

Vertalo Demonstrates Ease of Tokenization with Inaugural Webinar

Wave Financial

Founded in 2018, Wave Financial maintains operations in Los Angeles, California.  Here, they operate as an SEC Registered Investment Advisor (CRD# 305726).

Wave applies traditional investment strategies to digital assets and tokenized forms of real assets. Furthermore, they provide treasury management services and consultation to the digital asset ecosystem, alongside their digital asset fund products.

CEO, Dave Siemer, currently oversees company operations.