There are a lot of vehicles that promise to unlock the power of blockchain to investors. Technologically, they offer so much. What most fail to mention are the risks. We believe developments in blockchain, and its adoption in the real economy, can be made more secure through intelligent investing. Those raising crypto (or any other) currency need to meet the criteria of a responsible businesses; those investing, need to have the information to make informed decisions on where to vest their funds. When either of the two falter, trust is lost not only in the actual project, but the broader, as yet nascent, blockchain world. Our solution is to build an independent crowdfunding platform that has an in-built expert function. We propose to recruit Chartered Financial Analysts to screen projects on the platform, and to provide a qualified assessment of the business potential and the risks. This would deliver to potential investors the kind of expert advice that comes as standard in the world of securities or private equity, but which has been lacking in digital currency investments.
The vehicle behind this project is Digital Disintermediation (DD) Ltd., a Special Purpose Acquisition Company (SPAC) domiciled in Gibraltar. DD is a FinTech affiliate of energy financing specialist, Lincoln Liquidity (LL) Ltd.
Ethereum-based blockchain is the catalyst that made our vision technically possible. DD’s Technical Advisor for the project is DEVnet, which has strong expertise in blockchain technologies.
DD was created to launch and operate an independent, digital crowdfunding platform to help nascent and mature, mid-size businesses raise financing in digital currency. The platform will be known as the DDEcosystem.
Development of the platform is impossible without talented people. We are attracting experienced investors, blockchain community leaders, UX-specialists, mobile developers, blockchain experts, representatives of the financial services and etc to work on the platform. With their help, we'll build a strong HR-brand on the blockchain market. We know exactly what steps we need to go through to become the world’s go-to crowdfunding platform.
University of Cambridge
John Brown University
Stanford Graduate School of Business
Wharton School of Business
University of Ottawa
A SPAC is a Special Purpose Acquisition Company and has more recently been a popular vehicle for raising capital in the public markets in Kuala Lumpur (KL) to be deployed in upstream O&G.
A SPAC typically has three years to find a suitable Qualifying Acquisition (QA) and deploy at least 72% of the capital raised for the QA. Since SPACs who fail to complete their QA before the three year deadline will cease to exist and at least 90% of their capital will be returned to shareholders, they are typically willing to pay a QA premium (to sellers) in order to help to ensure they complete their QA within the designed timeframe. This is an interesting exit strategy for some upstream O&G focused PE funds and E&P companies.
We have deemed the traditional SPAC model too risky and thus for the SPAC 2.0 model, we will conduct a series of smaller transactions on a monthly, quarterly, or semi-annual basis as the cornerstone investors in DD have a large pipeline of infrastructure assets, e.g., 200 MWs in hydropower plant assets.
We will be raising 10% or the equivalent of USD 10m for administrative expenses first and the residual 90% will be on a project by project basis but the management at DD shall have three years to complete USD 90m in accretive deals to earn a 20% interest in DDTokens, otherwise we will cease to be a crowdfunding platform. This is all imbedded within DDTokens via a smart contract.
As an illustration, if we release or list on DD the equivalent of 5.00 MWs or USD 7.5m per quarter in hydropower plant assets, this would be exactly USD 90m over 3 years to achieve our qualifying acquisition (QA). This is a more efficient use of resources as with the SPAC 1.0, the company only has to deploy 72% of capital raised while we are guaranteeing 90% in order to complete our QA. This significantly decreases the risk profile and enhances returns since we do not raise the entire USD 100m upfront with the money sitting in escrow earning a very low interest rate, practically zero, so investors in DD simply do not have the same high opportunity cost in terms of tying up their capital for up to three years but rather are free to use it for other opportunities until their funds are truly needed, unlike the SPAC 1.0 model.
Furthermore, there is no incentive to do deals that are not accretive as the opportunities are all independently vetted by CFA charterholders who do not have a conflict of interest (unlike management in the SPAC 1.0 model) so there is no QA premium to be earned. Thus, by doing a series of accretive transactions, this may result in superior risk-adjusted returns for investors and this incremental innovation is why it truly is the SPAC 2.0 model, a superior model for the future of finance.
DDTokens for the 1st round are prepayment for due diligence services by CFA charterholders, etc of a token equivalent of USD 10 m but the 2nd pool of DDTokens will be considered securities as we will pursue a simple agreement for tokens model (SAFT) of a token equivalent of USD 90 m.
Protocol-level tokens (Bitcoin, Ethereum, etc.) do not have any assets of any kind underlying them and remain far from the MAS and SEC’s current focus. Apps that give you a credit for future usage (Filecoin, Civic, Gnosis, etc.) are in our opinion still effectively pre-paid gift cards like an Amazon gift card, and are not covered by the MAS and SEC.
Thus, DDTokens will not be considered a security for the 1st pool as we are giving out DDTokens to CFA Charterholders who perform some sort of useful work, i.e., due diligence and thus it’s not a speculative investment relationship between the putative issuer and putative investor but in reality, it is more like someone being paid for contributing something, i.e., a wage.
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