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by arthurcolle
1890 days ago
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I had this idea in 2016, i.e. offer a platform that lets people register their startups, they hire people + provide a service and enable them to provide equity securities to their employees + the founders (still using traditional contracts that represent the actual legal structure in the form of real-world legally binding contracts with a simultaneous existence as security tokens or whatever financial instruments make sense to early-stage startup employees) but issue ICO-based denominated shares that are then owned by the employees by their holding of the private keys of the wallet - could be operationally similar to ownership of present day ERC-20 tokens), and then enable them to be traded on DEXs if the employee has already vested parts of the crypto-shares/ERC-20 equivalent tokens. The real expense comes in a bit with the requirement of needing to still have a valid legal structure in place with contracts, with specific terms that still are valid with the existing legal framework in whatever country the platform would support. It is for sure viable but will require a lot of capital for regulatory compliance, and also will need to compete in the longer term against better capitalized companies like Coinbase that already have all the necessary traditional banking relationships and other tech companies that operate in adjacent DeFi fields (if they ever decide to compete, of course). Like Coinbase could acquire Carta or one of those other startup equity focused companies and then use that user data to focus on the best startups to trial this concept with, and then roll it out publicly and then just totally kill your idea. I think it's definitely a good application of the technology and the existence of such a platform would structurally strengthen the crypto ecosystem over the long term. The fact that Coinbase did a DPO instead of some kind of fancy DeFi-based offering is telling in their potential lack of conviction in the ability to offer public securities at this stage in the game through some of these smart contract based platforms. I'm sure @barmstrong and the Winklevoss brothers have spent a lot of time thinking about this |
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I think the reason is very simple. Traditional markets have way more investable capital, which leads to better liquidity and higher price. Yes it is possible to issue an equity token, but credible companies will get better valuation and liquidity from traditional equity markets.