Dean
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A Panamanian company called Orocrypt is running an Initial Coin Offering (ICO) crowdsale as part of their plan to launch a new gold backed cryptocurrency. The Orocrypt tokens will be issued on the Ethereum blockchain, meaning that they can be stored in any Ethereum wallet and sent to any Ethereum address. The sale starts on June 14th 2017.

Gold on the Blockchain

The combination of gold’s long established use as a store of value with cryptocurrency’s global payment network technology is one which many people see as a marriage made in heaven. It brings the convenience and ease of use of a natively digital currency to gold, while combatting cryptocurrency’s issues with price volatility by associating it with the oldest and most stable form of money in the world.

Gold is widely held up as a ‘safe haven’ asset due to its very long history of being highly valued, meaning that it is considered the safest medium in which to store your wealth. Throughout history it has been used as money by many different people at many different times, and even today is thought of as a kind of monetary asset even though nobody uses it as everyday money any more. It has fallen out of favour as money today purely because it is inconvenient to store and too valuable to easily carry small amounts for everyday shopping. By putting gold on the blockchain these problems are solved, and gold can once again be used as it has vbeen throughout the ages: as ‘real’ money.

So it’s not surprising that there are several companies around the world working to bring the two together.

The basic principle is simple: A digital token is issued which represents a certain quantity of gold, which itself is held in a secure, insured and audited vault. Users can then store their tokens in a digital wallet, enjoying the advantages of owning gold without having to store it themselves, and can make electronic payments to anywhere in the world directly from their gold reserves without needing to sell for fiat currency first.

Orocrypt Gold Tokens

In the third quarter of 2017 Orocrypt will launch its gold backed token. Each token will effectively represent a digital storage receipt for 30 grams of fine gold bullion. This bullion can be redeemed for physical deliver at any time.

The gold itself will be stored in insured and audited vaults in Zürich, Cayman Islands, Liechtenstein, and Hong Kong with monthly inspections by Société Générale de Surveillance SA.

Anybody can own these tokens and by doing so own the 30g of gold backing each token. Instead of charging storage fees for holding the gold, Orocrypt plan to charge a small 1% commission over the gold spot price on new token purchases, combined with a 0.04% transfer fee whenever a payment is made using the gold tokens.

In time, the company plan to launch a whole range of precious metal tokens, including silver and platinum in addition to gold.

OROC Tokens and the ICO

Unlike other ICOs, the Orocrypt token sale will distribute legally binding shares in the company. I’m sure that this will be a big bonus to many investors who will appreciate the security that this offers compared to the wild west rules of most cryptocurrency crowdsales.

According to the website:

Tokens represent Common shares in Orocrypt Inc., conferring all the usual rights and privileges of owners or shareholders… Like any company common shares, they entitle holders to dividends, rights to vote, and rights to payout in case of acquisition or sale. Orocrypt has a fiduciary duty to token holders.

This is the first time I’ve seen language like this, at least so prominently, during an ICO. Most ICOs have terms and conditions full of language trying to wriggle out of any legal responsibility, even going so far as to describe purchases as ‘donations’. So its kind of refreshing to read a description in which the issuer is explicitly stating their binding responsibilities like this.

In total, there will be 1,112,000 shares in the company. Out of this total, 45% of Class A shares will be ‘tokenised’ and sold during the ICO, while 24% will be held by he board as Class B shares, 18% reserved for employee incentives, and 13% used for “finance, bonus and compensation for services and rewards.”

You can find more information on Token Market or by visiting the Orocrypt website.