SqPay.io Real Estate Crypto InvestmentsSt. Petersburg, August 2017
Sqpay.ioTelegram chanel
https://t.me/sqpaypr - russian bounty chat
https://t.me/sqpay - russian
https://t.me/sqpayeng - english
Bitcointalk
https://bitcointalk.org/index.php?topic=2073007.0 - russian
https://bitcointalk.org/index.php?topic=2117288.0 - english
https://www.facebook.com/sqpay.iohttps://vk.com/sqpayhttps://twitter.com/vasily_mashkovhttps://sqpay.slack.com - english bounty chat
https://docs.google.com/document/d/1NENjeux-nIY2UJOhWS0ptQI9S9mMm9yoIbaVDFe6IWE/edit - russian bounty campain
https://medium.com/@vasilymash/sqpay-io-bounty-campaign-a90c2f322b51 - english bounty campain
SqPay offers a model of profitable investments in commercial real estate and shifts the
traditional investment model (with a high entry threshold and tax complexities) to the
environment of using Ethereum technology and digital tokens (on their basis). SqPay
tokens are backed up by real estate items.
This manifesto details the concept and components of the mechanism.
1. Introduction The project essence: SqPay connects Blockchain technologies with the realm of
commercial real estate.
This business model allows you to create a new vision of a commercial structure with
huge assets, where everyone can be an investor, influence and receive dividends.
The present and future technologies open up tremendous opportunities of becoming
part of an ecosystem with no restrictions on the movement of capital and investment for
private investors from all over the world.
Despite economic uncertainty and geopolitical challenges, investors’ activity in the
global real estate market remains high.
According to JLL experts, the global investment transactions with commercial real
estate will increase from $650 billion in 2016 to $700 billion in 2017, having recovered to
the levels of 2014-2015. According to JLL, the main investment real estate market in the
world is the USA: it is in this country that 16 of the top 30 cities in terms of direct
investment in the commercial real estate are located.
The absolute leader among the TOP-30 world cities in terms of direct investment in the
commercial real estate is New York ($33.1 billion in the first three quarters of 2016). The
investment transactions in New York are almost double that of London – the second
largest city in the list. Los Angeles has climbed to the third position with a 22% increase,
to $15.7 billion, due to an increase in foreign investment. The city has outperformed the
previous leaders – Paris and Tokyo (fourth and fifth places, respectively).
Investment activity in the world market is supported by increased investment from
institutional players attracted by the profitability of commercial real estate, as well as
new sources of capital from countries such as China, Taiwan and Malaysia.
New capital is only one factor of the market growth. Traditional investors also allocate
more funds for the use of opportunities in the area of real estate. Since these players
usually have well-developed mechanisms for redistributing capital, they can relatively
quickly send large amounts to the sector.
The share of cross-border transactions in the total volume of investment activity may
exceed 50% by 2020 against the backdrop of an increase in interregional capital flows.
One of the brightest trends in commercial real estate is the strengthening of Chinese
investors as the main players in the world market. According to the results of the third
quarter, China has overtaken the US, becoming the world’s largest cross-border buyer
of commercial real estate.
The difference between commercial real estate and other major classes of assets is
liquidity. Compared to stock exchange securities, such as stocks and government
bonds, the real estate market is not as organized and efficient as other markets.
Investments in liquid assets are hampered by the location in geographic areas deprived
of internal investment opportunities. Moreover, an important factor is the threshold for
entry into such projects for a private investor. Although many investors are looking for
and studying the opportunities of investing in overseas real estate, there are huge
obstacles in the market related to the movement of capital and the peculiarities of
jurisdictions in different countries, and hence the complexity of document processing
and asset management.
In the second part, we will detail the basic concepts of the project and sum up the key
components.
In the third part, we explain the system of tokens – its purpose, the pricing system and
the transfer of title. The (initial token offering) rules of the company will be described in
this chapter as well.
In the conclusion, we will consider the legal side and the associated risks.
Appendix A describes the stack-blockchain technology that will play a role in the
operational part of the project. The web application architecture is described in
Appendix B
2. The conceptThe SqPay project will be implemented in several stages.
1. Creation of a trust (DAT – Decentralized Autonomous Trust). The trust will be
registered in Hong Kong since the legislation of this city allows to protect the rights of
the token holders (Hong Kong is one of the most advanced cities for projects using
crypto-currencies).
2. Creation of an ecosystem in the Trust, which will allow the holders of tokens to vote
for:
- Distribution of profit;
- Selection of real estate items;
- New investment directions proposed by the committee.
3. Evaluation, audit and acquisition of commercial real estate by the trust. The real
estate item is selected only from the street retail segment with the current anchor
tenants. This will allow you to receive profit, distribute it among participants and invest in
the Trust development.
4. With the increase in the number of square meters of leased space, DAT will buy out
tokens from the market and “burn” them, thereby reducing their quantity and increasing
the value.
To officially launch the SqPay project, we need investments that are divided into two
rounds:
1. PreITO – softCup 0.1 M $ hardCup 0.3 M $
2. ITO – softCup 10 M $ hardCup 90.7 M $The funds collected at preITO are necessary for the Trust registration and preparation
of necessary documents, software development and project infrastructure.
The funds raised by ITO will be used for the acquisition of commercial real estate items
by the Trust, which will create a flow of profit that will be distributed among the holders
of the tokens.
Also, part of the funds will be used to purchase new commercial facilities and buy
tokens from the market.
3. The token system 3.1 System and functionsThere are 3 main reasons for creating a system of tokens:
- Raise enough money to develop the project. Crowd-funding with detailed rights and
warranties of participants is the best option for building a community that wants to
create and increase capital.
- Tokens are a universal tool of value for each participant, both in decision-making and
in income distribution.
- Tokens can be perceived as an investment tool, because the market price will change
with the time of project development.
The profit source is not the turnover of the tokens themselves, but real estate items and
their lease, while during the reinvestment the number of real estate items and the
market price of tokens will grow.
We would like to emphasize that SqPay team cannot guarantee a monotonous increase
in the value of the Tokens and is not responsible for any losses associated with Tokens’
speculation in the market.
3.2. Token descriptionsEach token allows you to profit from the distribution of dividends in proportion to their
number from the total number and to vote in making decisions proposed by the
committee:
- Distribution of profit,
- Investing in new facilities
- Activities of the trust.
SQP tokens are divided, i.e. their number does not need to be an integer, since
fractional partitioning will create the convenience for working with SQP as an investment
in assets.
The smallest fraction is 0.0001 SQP. It should be noted that to obtain dividends and to
vote, holders must have at least one full token. We will not be able to pay dividends if
the token holder trades them on a third-party exchange, rather than inside our
ecosystem.
The minimum number of tokens an investor can purchase is 1.
The total number of tokens is limited to 1,000,000.
PreITO (2 weeks)
1,000 – 3,000 (0.1 – 0.3%) – $50 per 1 token, and the minimum purchase is 2
tokens.
ITO (4 weeks)
900,000 (90%) – $100 per token, and the minimum purchase is 1 token.
97,000 – 99,000 (9.7 – 9.9%) – will be distributed among the team In the event that during ITO fewer tokens are sold, the number of tokens for the team
will be reduced based on 9% of the total number of tokens sold, and the rest are “burnt.”
The funds received from the sold ITO tokens will be stored in a purse with several
signatures, under the supervision of three members of the advisory committee. The
management of the funds will be transparent and consistent with the strategic plan. The
split is shown in the diagram.
Deals with tokens (sales, leasing, etc.) will be allowed only after the ITO completion.
4. Financial and economic modelThe financial and economic model is built and calculated on the basis of fundamental
indicators. The calculations take into account the payment of dividends in the amount of
50% of the profit. It does not take into account the increase in the company value as a
result of effective management and favorable conditions on the international market.
Based on the data given, the payback period of the project is 6-7 years (14.3 – 16.6%
per annum).
The basic information on the calculations can be found at
http://sqpay.io/ in the
Financial Model section.
5. Legal aspects To implement the project and protect the investor rights, a mutual fund will be
established in the form of a trust in a jurisdiction with the most developed and
progressive system of Anglo-Saxon law (Hong Kong, Singapore, or Switzerland are
being currently considered).
The trust will be created by analogy with the Real Estate Investment Trust (REIT) in the
US, providing investors with a yield of up to 40% per annum.
The trust manager (a trustee or management company) will be separated from the
ownership of the trust assets in order to avoid a conflict of interest and will receive
compensation depending on the financial results of the fund.
Acquisition of commercial real estate by the trust will be carried out on behalf of the trust
and only in the interests of investors (trust beneficiaries).
The right of investors to own the trust assets will be in proportion to the share of
investment and will be reflected in the articles of incorporation and will be bound by a
legal mutually binding agreement – the trust rules – published on the website and in the
SqPay application that acts as a “purse” for accounting for tokens. Tokens will be legally
equated to the shares in the fund (trust).
The application and the database at the website will be arranged on the basis of
Blockchain technology, which will allow investors to reduce the manager’s costs for the
services of the depositary and registrars, since investors themselves will act as
guarantors of transactions on the sale of the fund’s shares.
SqPay also plans to use and develop the use of Blockchain technology to verify the title
to real estate with government offices.
6. Future development We plan active development and acquisition of new commercial facilities. Diversification
will create a constant cash flow and be more flexible with different economic changes.
Blockchain and new technologies will create a strong and secure system. We want to
create a successful project in order to show a merger of the real sector of the economy
and the crypto-currency can be.
[
b]Appendix A: Blockchain Technologies[/b] The general ledger has been the heart of trade since ancient times and was used to
record various things, most often assets such as money and property.
The Blockchain technology is based on the concept of distributed digital registers that
are essentially asset databases, which can be shared on a network with multiple
websites or institutions. All network members can have their own identical copies of
ledgers. Any changes in the ledger are reflected in all copies within minutes or, in some
cases, seconds.
Distributed books are inherently more difficult to attack than traditional centralized
versions. Instead of a single database, there are several common copies of the same
database, so during a cyber-attack one have to attack all copies to be successful. This
technology is also resistant to unauthorized changes or malicious interference since
network members will immediately indicate a change of any part of the book. In
addition, the method by which information is provided and updated means that
participants can exchange data and be sure that all copies of the book coincide with
each other at any time.
Traditional books provide a level of confidentiality, restricting access to information for
the parties involved and a trusted third party. In contrast, the Blockchain system is
transparent – all network members can view the entries in the register. However,
confidentiality can still be preserved by disrupting the flow of information to other public
keys that hold the alias, which correspond to the participants. The network can see that
the transaction has occurred, but the unaffiliated parties do not have the information to
associate the transaction with specific identifiers.
In 2009, Satoshi Nakamoto introduced Bitcoin – the first implementation of a protocol
that allows issuing a digital document to a bearer without a trusted third party. This has
been achieved through the use of the registry replication system, i.e. Blockchain. Bitcoin
solves the complex task of implementing decentralized digital cash, but its security
model limits its efficiency and throughput: its architecture supports only one proprietary
asset, and its virtual machine offers limited support for user programs that determine the
movement of assets, sometimes called smart contracts.
Ethereum, launched in 2015, develops the Blockchain concept for a fully programmable
state replication mechanism. Although it includes a much larger (a powerful
programming language), it presents additional challenges for scalability and efficiency.
Its universal computational model creates difficulties for engineers to justify the safety of
their applications
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