All About Investing In Security Tokens
Tangible’s bond is live! We have some very exciting news to share – we just launched the Tangible bond on our security token investment platform. This makes it possible to invest in Japan’s prime winter holiday destination, Niseko, from as little as 50 Euros. Keep reading to find out all about it.
Why Invest in Security Tokens?
There are tons of investment products out there. So, what makes security tokens so great? Let’s have a look at the concept to better understand this.
Security tokens are an investment product, backed by real assets. If we are speaking about equities or equity like tokens, they give investors a stake of the issuing company or dividends from the companies, or assets, performance.. These could be, revenue, dividends, or share in capital gain. On the other hand, digital bonds are issued by companies to raise capital to get projects off the ground, which becomes their debt. They gain access to financing while their debtors or investors gain access to attractive returns in the form of interest payments.
So, why is this better than traditional securities? In short, it allows instant settlement and opens access to unique companies and projects. It also gives companies access to a whole new class of investor. This means that trading assets that were previously difficult to enter and exit, are now easily accessible with low fees and daily returns.
Security token investments sound great, right? It gets even better from here, because we just listed a new bond you can get your hands on! You can start investing in Tangible!
What is the Tangible Bond?
In short, Tangible(TGBL2YR) is a two year bond issued to raise capital for the construction of a development called Basecamp in Niseko, Japan.
Tangible KK, a Japanese corporation, has acquired prime land in Asia’s premier ski resort in Niseko, Japan. This will be the home of Basecamp – a development of 7 units making up 855 square meters of accommodation for holidaymakers in Japan’s prime winter destination.
Basecamp will not just be another traditional building. It has been designed with a social ambiance in mind. Guests have the opportunity to interact with each other, enjoying a meal in the kitchen or telling tall stories of their day on the slopes. Extensive use of large windows has been included to give an open feel of being emerged in the treetops which incorporate ample views down the valley. The interior follows the Japanese feel of minimalistic design with extensive use of wooden accents that enhance the overall feel of tranquility.
Why Was the Tangible Bond Created?
Tokenized bonds are not just another investment product. There is a bigger story behind it. In this day of social media, we all want to be part of something. To pull your phone out and show friends and family a picture of something you own or you’re part of. Imagine this “asset” was located in a place where you had never stepped foot, or visited once and yearned to return?
Until today, owning property abroad has been just a dream for many. Such tangible assets are not easy to acquire, particularly on your own. Getting access to unique investments outside your own country is near impossible. This is where the Tangible bond steps in and solves this problem.
How Does it Work?
The people behind Tangible wanted to make investments into securities accessible. So, they issued a digital security – a token. It is based on blockchain technology and allows investors to trade products freely and instantly. This removes time and location barriers – investors can be located in different time zones and sides of the globe and trade freely. Not to mention significantly lower fees
All this is made technically possible by a cooperation between several outstanding parties. Token registration is made possible by Ignium. It acts as a Central Securities Depository (CSD) under the regulated framework of a ‘sandbox’ formed by the government in Montenegro. Then, a Multilateral Trading Facility (MTF) is set up. MTF is essentially an exchange where one can transact. This is where CoinMetro steps in. CoinMetro is easy to use for both beginners and pros and equipped with 24/7 support should you need to ask a question. CoinMetro is licensed in several jurisdictions, US, Australia and Estonia, and operates under reliable AML and KYC policies. So, you can be sure that your funds are safe!
The combination of these parties allows Tangible to issue a bond, sell it to our investors, paying them a daily return and using the funds for construction of the Basecamp property. At the same time, the investors will have the freedom of trading the product they hold on the Coinmetro exchange. This is known as, ‘secondary trading’. It’s a win-win for all involved.
Basecamp delivers an innovative way for investors to be part of a project, while earning decent returns, even during non-revenue producing construction period, while perks(free nights stays), and eventually equity-like rights of this unique asset are all part of the deal.
What used to be just a dream before, is now a reality thanks to tokenized assets.
How To Invest in the Tangible Bond?
Did this spark your interest? Are you wondering how to own part of Basecamp, a holiday resort in Japan? Don’t worry, it’s easier than it seems!
The first step is to participate in the bond offering. You can start investing from as little as 50 euros! The bond acts like any traditional bond. It will return 5% per annum, meaning for every €10,000 invested you will receive €500 each year. The kicker is that we’ll be paying you daily, roughly €1.37/day on a €10,000 investment.
Why are daily payments so great? In short, they make exiting the investment very convenient for investors. If you wish to leave or need your funds, you can sell your bonds to another buyer and you’re already squared away with what you are owed. No hassle, no chasing us, no paperwork, just exit. You’re free to trade in and out as you wish.
The bond is effectively you lending us funds so we can get the project built. In return for that, we’ll pay you interest on it just as if it were a bank loan. This bond will have a life of 2 years at which point we’ll need to cash you out (i.e., get your initial investment back in full, or swap into the equity like ‘Growth’ token).
Near the end of construction (around September 2021) we’ll come back and ask the bond holders if they’d like to swap the investment into more of an ‘ownership’ interest. We call it ‘equity-like’, as having equity in a property like Basecamp, you would need to be registered on the titles. You’d need to provide signed documents, we’d need to employ a solicitor to handle all this and it would make it all very expensive, inconvenient, slow and make you liable for loans, insurances and other aspects that apply when owning such an asset.
So we thought…why not provide all the benefits of property ownership but take away all the hassles? That’s exactly why we created a Growth token. You get all the benefits of the Growth of the property (rental revenue and capital gains), but no cumbersome procedures of real equity, or liability of loans and similar risk.
Anyone wanting to do the swap, Bond to Growth, will potentially get returns from actual revenues when vacationers rent the units, and will also see the value of their ‘share’ change as the value of the property changes.Stick with the stable returns of the bond, or swap into the growth and potential returns of rental revenue and capital gains. It’s you;re choice
Bond Expiration Buy Back
So what happens if you choose not to swap for the Growth token and the bond expires? At the end of the 2-year bond term, Tangible will cash you out. Tangible’s liability will be determined by the revenues to that point and the sum of people who have upgraded to Growth.
The secondary market is what makes this model such a game changer to how we normally invest. Tangible bond gives you access to global offerings and makes sure your investments have liquidity. Where once you may have been locked into an illiquid investment, such as property, for decades, you now have the option to decide when you’d like to exit. Or, if you find the performance attractive, then you may like to pick up a little more. Secondary trading means you have a marketplace to trade, be that the bond, the growth token or the use token. You can buy and sell as much or as little as you like, provided there is someone on the other side ready to match your offer.
Would you like to learn more about the Tangible bond? Head over to our platform to see all the details! In case you need any help, our support team is available for you 24/7.