Proof Suite Seeks To “Tokenize” Real-World Assets – ICO Soonbr>
Proof Suite is a service that looks to tokenize real-world assets – real estate and businesses, most prominently – and help investors share in the appreciation. They have over 2000 assets already tokenized (200 are selling on exchanges) and the company is launching its own token sale on November 1 after raising $1.7 million in its pre-sale.
Mike De’Shazer, Proof Suite’s CEO, talked with Block Tribune about the service. “By tokenizing assets and selling them fractionally on the blockchain, we free up their value to be used productively and give people more control over their assets,” said De’Shazer. “Essentially, we’re using the trustless nature of the blockchain to hand over the role of banks and regulators to the crowd. The results will be new opportunities, greater financial sovereignty, and greater financial efficiency.”
The service’s Assurance Market Protocol (AMP) will take the features of the Proof Dashboard and decentralize them, making them resistant to censorship attempts. In addition to allowing people to tokenize assets, AMP will include a prediction marketplace to insure and asses the risk of tokenized assets.
“The prediction marketplace is exciting because it creates a self-regulatory environment for investors’ protection. People with expertise in a particular asset are incentivized to stake for it or against it, based on the potential for financial rewards. It’s the first truly honest system for risk assessment.”
AMP also includes a decentralized exchange. In addition to exchanging cryptocurrencies like ether and bitcoin, this exchange also lets people trade and store Proof’s Crypto Fiat, which pegs ether to USD or Euro in an ether reserve wallet. This is the first pure blockchain solution for fiat-pegged ether.
“Proof’s Crypto Fiat has several advantages over other implementations. Instead of relying on reserves of actual fiat currencies, we’re building an ether reserve pool to guard against rapid shifts in value. There’s no need to worry about an underlying fiat account being mishandled, seized or becoming inaccessible,” De’Shazer said.
BLOCK TRIBUNE: Your company is based in Estonia and mainly operates in Korea. If I have a legal dispute in the US on something Proof did, where will the case be tried and under what law?
MIKE DE’SHAZER: The distributed nature of cryptocurrency and the blockchain means that few of our transactions would happen in a single jurisdiction. It also means that Proof is not involved in much of the transfer of value. To answer your question directly, I think that it would depend very much on the specifics of the dispute. Outside of Korea, it would probably be in Estonia and under Estonian law. I defer to our legal counsel for most legal questions.
BLOCK TRIBUNE: What real-world assets beyond real estate are you initially targeting? You mention businesses – what sort of guidelines are contained in the smart contracts to account for their expenses and costs?
MIKE DE’SHAZER: People can use Proof to tokenize almost any asset they can prove legal ownership of. That includes company shares, commercial paper, community currencies (such as Berkshares community currency in Mass), and new asset classes tied to initiatives and tokenized intellectual property.
Business owners can issue tokens for their companies and pay dividends or other rewards to token holders. When business owners deploy contracts onto the blockchain, they specify certain expectations, criteria, and limitations that they must meet or abide by. When these requirements are not met, that’s when the insurance and risk prediction markets kick in, protecting the token holders and rewarding speculators.
BLOCK TRIBUNE: Is there anything that you can’t (or won’t) permit on the platform?
MIKE DE’SHAZER: With AMP we created a self-regulated environment where people can insure assets or stake against them based on their knowledge of the market. It’s a completely decentralized platform and neither we nor anyone else will have to power to control what kinds of assets are on the platform. The curation and ranking is based on the safety of a token, as decided through our insurance and prediction market.
I’m confident that the system will work and allow the crowd to properly identify the best and safest tokenized assets, as well as overly risky or fraudulent tokenized assets. We rely on the most powerful force in the universe: The free market. People are incentivized to insure assets they’re confident in and to stake against assets they’re not confident in.
But let’s say that an asset that seems like a safe bet ultimately doesn’t work out. No problem. It’s likely to be insured up to 250% of its actual value, so token holders are made whole in the end.
If a tokenized asset is fraudulent, it can still rise to #1 if it has more insurance and less staked risk than other tokens. If it’s insured by more than 250% for example, then all the token we are introducing a trustless system. This is what blockchain is meant to do.
BLOCK TRIBUNE: What happens if Proof goes out of business? Are the smart contracts null and void?
MIKE DE’SHAZER: No, if anything happens to Proof, the AMP will live on and tokens can still be traded. All the code is open source so the AMP can improve and grow as the blockchain technology itself evolves.
BLOCK TRIBUNE: Will Korea’s ICO crackdown hamper your planned token sale?
MIKE DE’SHAZER: This has been widely misunderstood within the media. There isn’t a ban on token sales in Korea. Korea’s FSC proposed some regulations and restated existing securities rules, but they did not actually ban token sales.
In Korea, it has always been illegal to sell securities without having authorization from the government. The task force that has been in the news has stated that they will penalize token sales that are actually issuing securities. At Proof we are not selling securities through our upcoming token sale and the FSC’s statement will not affect us.