The decentralised blockchain's USP is privacy & freedom from confiscation.
If you look at the top 12 by capitalisation, 3 are exclusively focused on privacy, XMR, DASH & ZEC. In their Metropolis update, ETH will introduce Zk-SNARKs for privacy (which ETC can adopt too.) STRAT is developing Tumblebit so that easy private Bitcoin transactions are possible (LTC can easily be added) BTS has 'Stealth'...
The majority of ICO's these days are incorporating in Crypto Valley, Zug, Switzerland, still always ranked in the top 3 jurisdictions for privacy.
You have incorporated in Panama, not in anyone's top 10 AFAIK, you require KYC from investors & customers of your main product. So there's not much USP for investors or customers vs. using/investing in existing gold holding services. I know you have said you are looking at a gold token product which only requires KYC if you claim the physical which is great but to extend that idea further you could...
Through the use of a price oracle, create a smart contract that If you send ETH to the contract it sends you back 1 gram gold tokens at spot +2%. If you send gold tokens to the smart contract it gives you back ETH at spot -2%.
The contract is funded with enough ETH to cover 1% of outstanding gold tokens & replenished if needed every 24 hours.
50% of the fees charged above/below spot are sent to another smart contract and distributed to ORO token holders.
- The 1 gram gold tokens will likely trade on exchanges within a tighter range than the +-2%
- In the event of an Orocrypt bankruptcy token holders can claim gold directly from the vault with a minimum of 30 grams & with KYC.
That way customers have a private gold product they can access simply by sending ETH to a smart contract & investors have a private share that provides consistent returns from 50% of fees regardless of whether the 10x voting shares 'think' they have a more profitable use than dividends for the remaining revenue.
Your concept is brilliant! It only needs to be worked out a bit more. Some points that need revision are:
One gram. That is too small. Spot gold price fees for one gram range between 10-25%. If you charge 2% you would be losing money.
KYC. If you do not have a solid KYC process you will not be able to have fiat currency bank accounts or be able to buy gold from reputable providers, or store it at reputable vaults. Regarding dividends, it is illegal in most jurisdictions to distribute dividends without KYC and investor registration.
Fractional banking. 1% in daily reserves is too little. It would have to be much more and determined by a process similar to the stress tests banks are currently undergoing.
We would be happy to talk to you about your concept if you are interested in developing it together.
Thanks for the reply.
What about 2% above and below what Orocrypt would pay for a 100g bar? I.e a 4% spread/profit.
& What if the minimum gold token size was 1 gram but the minimum amount of gold tokens you needed for physical delivery/withdrawal was 100 + KYC (Example: Orocrypt buys 10, 100g bars and can now sell & buy back 1000 '1 gram gold tokens' backed by physical gold based on the current price of 100g bars - That way no 1 gram physical bars with a huge mark-up are purchased only 100g and up.)
Regards fractional banking. I'm not suggesting 1% gold reserves. I'm suggesting 99/100% gold reserves & 1% of that total value in ETH reserves. So if you have sold 100kg worth of physical vaulted gold, so 100 000 gold tokens on the market, the ETH contract should have at least $40 000 worth of ETH so that 1% of the gold tokens can be redeemed for ETH on a daily basis. In the event more people wanted to exchange their gold tokens for ETH, Orocrypt would sell more of their fully backed physical on the market, buy ETH with the proceeds and replenish the smart contract.
Regards dividends, I'm not familiar with the various laws surrounding them but I know many cryptos offer/will offer it in some form such as VSL, WAGR, TKN and the ones listed here
https://www.investitin.com/cryptocurrency-dividends/Perhaps one of those approaches would be a feasible & legal method for Orocrypt.
Regards KYC, pretty difficult, what if Orocrypt or a trust was the owner of the gold (for this particular product offering) with some measures put in place that would require the gold to be sold and ETH bought & sent to the smart contract in the event of a bankruptcy/other. That way the token holders are just owners of digital tokens, no bad actors could actually get physical gold because they have to pass KYC and have at least 100 1 gram gold tokens to get delivery.
(The OGC one gram backed token will be redeemable for physical & I 'believe' will be tradable on regular exchanges, ie the digital token can be bought and sold without KYC. (I don't like their model because their token issuance is limited, so the tokens will be valued at 'Gold + large speculative/volatile premium, like XAURUM which has some small gold backing but most of the token value is speculative & volatile which defeats the point.) Xaurum is also traded on regular exchanges, no KYC and there is a method to redeem the underlying physical I believe. Hopefully one of those offerings is using a legal solution to the problem that can be emulated.)
