https://www.reddit.com/r/ethereum/comments/646e6i/blockchain_capital_is_using_an_ethereum_token_to/dg1ytut/ProtectYourMind 2 points 16 days ago
Okay, I'm going to talk about this outside of BCAP.
Let's say you setup a company and decided to start a blockchain. That blockchain will then be sold on the open market and will be valued at some amount. This will create a market cap and a total valuation of the coins.
What you could say is that on a quarterly basis, you're going to value your company based on a 3rd party assessment of your assets. You could then calculate the value of the coin. If the value of the coin drops below the value of the company, they could issue a mandatory buyback of the coins on the market until the market cap equals the NAV (Net Asset Value).
In this way, there is a guaranteed floor on the value of the coin, because the company guarantees a buyback in the market cap falls too low. By the same token, if the price gets too high, the company could release a supply of coins held to lower the value to match their latest valuation. This would put a ceiling and floor on the value of the coin, making it relatively close to the value of the NAV.
Now back to BCAP: this is not what they're doing. There is no guarantee on buybacks, it's 100% at the discretion of the fund. There is nothing but their good spirits you can rely on.
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[]darvink 1 point 16 days ago
Thanks for this.
I might have missed it but I still don't get how is the coin being tied back to the company? Yes you can say there is a presumed link between the coin and the company, but how do you enforce it?
A simpler analogy (the way I see it), say company A issued 1,000 shares. These shares represent 100% ownerships of company A. If they have excess return they can choose to dividend it out to all shareholders, or decide on a buyback so that the rest of the shares will increase in value - this is because there is a link between the shares and company ownerships.
So technically if the buyback happens until there is only 1 share left, the owner of the share is the owner of the company and its assets.
I don't see that with tokens.
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[]ProtectYourMind 1 point 16 days ago
Apparently neither of us are smart enough to understand this. That's what I've been trying to figure out for the last two days.
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[]darvink 1 point 16 days ago
Yeah, this was always the point that I am looking to establish, because we had the same challenge with our project, REIDAO.
We are tokenising real estate and were looking for ways to link the token and the real estate. In the end this is how we do it: the tokens can be claimed back to get the piece of property. Again I don't see this happening with asset management based of offering.
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[]ProtectYourMind 1 point 16 days ago
Ultimately, all you need is a guarantee of tying some value back to the value of whatever asset you're trying to track.
It's not like the piece of paper that constitutes the deed is magic. it has value because whoever has their name on that paper owns the property and it's backed up by all parties. If you had tokens that basically established ownership, then you would be getting somewhere.
So long as there's some financial guarantee to the asset, it can be worth something.
