One question: How will that be with company-shares? I don't ask because I plan to buy but I'm interested in the relationship of token and share and how current Investors will exchange one into another and why.
Or more precise: If an Investor of the previous ICO wants to buy Heat-shares, he can pay with the token for that - give the token to the team and purchase shares. That way?
Great question, I think it will happen via the A2A exchange. A2A stands for asset to asset. It will work via the built in exchange on the HEAT ledger crypto 3.0 blockchain. They will release it very soon. They will most likely have an extra company share token that can then be traded for HEAT or BTC. I am sure they will release further info after the launch next week. So prepare your seatbelt because the coin will go to MOOOOOON soon!
Okay, thanks for the answer! But considered they need funding and considered they get a lot of Heat-Tokens as funding in exchange for Heat-shares, the result would be that they hold a lot of tokens they would have to sell to get money.
If I see this correct there may be an economical problem here.
Is there any incentive for those who are already invested to hold the token it instead of selling it in exchange for shares?
Is there any incentive for potentially new Investors to invest in the token instead of shares?
If the team is paid with Heat-tokens in exchange for company-shares - what should they do with that instead of selling to get funds?
It's possible that I'm missing something here, but even if there wouldn't be some drama here currently and not that much incentive to buy into Heat for new Investors, I see no scenario for a rising price while there are many potential threats - not only for the price of the token but also when it's about funding of the project. The team could find out: Oh, we have a lot of Heat-tokens now, but what to do with it? Waiting won't help because nobody with a clear mind would buy into it since it needs to be considered that they have to sell at a point to stay funded. I mean, that's kind of the business-model of the next ICO right? They get tokens for shares.
Or am I missing something here?
I believe it was mentioned before that the shares for the company are to raise a certain amount of Euros. Each share I think was planned to cost 25 EUR.
There will be 1 option given for each 400 HEAT coins an investor owns. This 1 option entitles the owner to 1 traditional share of the company at a 50% discount (12.5 EUR).
Okay, thanks!
That's a good incentive to buy shares with the token, or the other way around: It would be near to stupid not to exchange the token for shares, right?
And new Investors who would like buy into Heat also might focus on the token before the ICO to get a discount - as long as it's cheaper to use the token than another currency.
That means, it's likely that the team will get near to 100% of the token-supply but not that much of other funding. Especially because of that it wouldn't make any sense to buy the token after the ICO because the price can't stay above since the team needs to sell to get funding. If I'm not missing something here: There won't be a market for the token after the next funding round what also means that the team can't sell the tokens, at least not enough, not near to the price it was meant for - it will go down like a stone since there is no incentive left to buy it.
But since the price of shares is connected to the price of the token - it's unlikely that the price of shares will stay up when the token goes near to zero because the team holds near to 100% but runs out of funding. That also means, that there is not much if any incentive for new Investors to buy into this. That makes it even unlikely that the token will rise prior to the next ICO while it seems like a safe prediction that nobody will want it after the next ICO.
If I'm not missing something important, this is an economical circle-game - more a "downward-spirale".
Not necessarily, also I am not disclosing whether I will buy shares or not. I'm sure the coins will be trade-able with the shares at some point.
It depends on the proposed profit generating cases for the company. The team will not ever come close at all to getting 100% of the token supply...
As far as I understand correctly, the IPO funding will be for Euros. So I don't think they will be selling any HEAT for fiat for the IPO.
The price of shares I believe is denominated in EUR, not connected to the price of the HEAT coin.
I would assume also, HEAT will be used on the platform. So there is incentive for having HEAT. The team will receive 1 million heat after 1 year from what I understand in the OP.
Why would you keep the token instead of exchanging it for Heat-shares?
And please take a loot on the scenario out of the perspective of a potential new Investor. You say the next funding will be for . But it's kind of a naive assumption that anybody will send them Euros if it's possible to get the shares cheaper as long as the token does not exceed a certain level in price (didn't do the math but of course it can be calculated).
With other words: If there would be a lot of new Investors the scenario would be that the token first goes up in price to a level that there is no discount any more. Than it would need additional Investors who make the choice to pay for shares with other currencies like Euro or Bitcoin or whatever.
But: If this is not against all economical principles, the token needs to go down in value right after that. Because:
1) It has no advantage over the shares. Why would anybody who considers Heat as a good project buy into the token instead of the shares?
2) Who would buy into the token when it's safe to say that the team will have a huge majority of the total supply and needs to sell to be funded?
And the problem is: The value of the shares and the value of the token is connected. There is no chance that the value of the shares will stay up when the price of the token goes down.
1st Conclusion: No way that a rational actor will touch the token or the shares.
2st conclusion: Investors of the previous round will try to get rid of the token by selling them prior to the next funding round or by exchanging them for shares. And the team will get a lot of tokens that won't have much value after that.
3st conclusion: Since that is predictable for everybody who thinks about this, it goes back to 1st conclusion.
It's really interesting because all economical systems are about incentives and anticipation. And this one needs irrational actors to keep it running. It's like a magic trick that doesn't even work out for the wizards who designed it. That's why I called it a circle or a downward-spiral. The third conclusion leads back to the first one.
I think because the tokens have value for the platform itself, where the shares are for potential dividends from company profits.
The shares themselves will be sold for euros. The "options" which will allow 50% off share prices will be distributed to holders of heat. So, if someone comes late, they won't receive the allocation of options I think. This means that only the ones that hold HEAT when the options distribution is done, will get the options for discounted shares.
These options are supposed to be trade-able on the AE.
The coin itself has usage on the platform. The shares are different which are linked to the company itself, ideally which would produce profit for the company, and subsequently with dividends for shareholders.
The team will not have a huge majority of the total supply of the HEAT coin. If someone decides to sell say 1 Share_Option for HEAT, they will receive x amount of HEAT (the individual who got the option in the first place, Not the HEAT team). All shares from what I understand will be distributed once they are all sold. This means that once actual trading of the Shares for HEAT happens, it is between shareholders, not from the HEAT team. They will from what I understand, be getting Euros for the IPO of shares, separate from the HEAT coins. The HEAT coins are the backbone of the network and platform. The shares of the company are for a stake in the work of the company in the future.
