Why would a transfer of VERI from "Reggie's wallet" to JSE's wallet change the supply numbers or supply dynamics?
I wasn't alluding to market supply, I was talking about blockchain supply and how much of it counts towards "commonly reported" marketcap.
They are 2 distinct metrics.
Having JSE buy equity of Veritaseum makes no sense, no company operates like that.
"Institutional investors" (such as large hedgefunds) are generally prohibited from investing in unregulated markets such as Bitcoin. But if you can create a paper company, then create a token (on the Ethereum blockchain) and find a way to have that company "own" a portion of the blockchain value then you've basically packaged the blockchain asset into an "equity wrapper" which could in fact be digestible by "institutional investors".
That equity packaged token can be far more attractive to investors like Bank for Jamaica for multiple reasons:
[1] By investing in the equity of a company which owns 98% of the blockchain value, they still have huge exposure to the token trading price
[2] They bypass laws that don't let them operate in unregulated markets
[3] They potentially gain exposure to all of the intellectual property associated with the token technology (which token holders do not)
[4] The equity "buffer" passes exposure to downside risk from the equity holder to the "naked" token holders since equity holders retain a holding in their original investment capital which token holders do not
There are also advantages for "Reggie's Company"
[1] He can capitalise it from the ICO markets without loosing any equity (which he would do in VC markets)
[2] He needs to find liquidity for 98 million tokens than he could not find in the ICO market
[3] The tiny traded volume delivers him a price with which to negotiate with potential "institutional investors", but not without risk. So to mitigate that risk for the institutional investor he gives them access through the 'wrapper' which means that their investment is insured to some extent even if the token price crashes
[4] In that way he can further capitalise his company (but this time by compromising equity) from the institutional markets. However the huge abundance of tokens in his possession means he has nothing to loose and has passed the entire project risk to the token investor primarily and the institutional investor secondarily
The reason for the low initial offering was to mitigate the risk for small investors at the ICO stage. He had to do this to get some investment in at all costs otherwise there would have been no quotable market price for the tokens as an asset.
Those with most to loose therefore are "naked" token investors who invest now. They will carry the risk on behalf of:
• Initial investors
• "Reggies company"
• Institutional Investors (who invest in the token asset through the "Reggie & Co" Equity wrapper)
Of course I am making assumptions here because we don't really know what the genuine business plan is behind this ICO. But either way, anyone investing in the "2%" market now will be checkmated into holding all the risk by the three groups above as far as I can see.
