It's a new account, my first post, and it's not the typical collateral of altcoins, so I wanted to put down plenty of collateral.
It's not the
typical collateral but it's not
valid collateral either.
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Why isn't this a valid collateral? I was surprised bitcoin loans for equity as collateral is not a huge market and I'm here to learn why and get practical experience from the borrowers perspective.
It's purely for business - the company is in the process of listing some shares on a private/public market, if I pay $5k using loan with my personal shares as collateral instead of company paying it using its profits, then company's profit is $5k more and at a conservative 10x profit multiple the valuation is $50k more, so I'm paying $1.5k interest for at least $50k higher valuation on the market.
Private with Public has a big difference. So you want to buy more shares of the company with others money and use them as collateral, in order to look like someone else buying them? And how do you know that will be a conservative 10x profit? If not, you will not pay interest? I'm a bit confused...
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We're listing on a market for startups (e.g. portals that provide early liquidity for startup employees before IPO), the market offers these shares initially to a list of private investors and then these private investors will be able to buy/sell these shares on that public market to all users. The $5k is a tiny listing fee this market charges, I thought it would be a fun and profitable experience to use a bitcoin loan, actual trading will be in the range of millions, we'll probably put 10% of company shares for sale and will be only selling shares, not buying. I can see profit to valuation ratios of all other companies listed on that market, companies doing similar amounts of revenue as us, are actually listed at $60-70M valuations, not the conservative $10M I used here. I don't understand the "will not pay interest" question.
Good point about liquidity, depending on valuation methodology bitcoin price would have to increase 3x-30x in valuation in 3 months for the bitcoin re-payment value in $ to match the market value of the collateral and both I and the company have plenty of assets in our war chests to re-pay earlier if such black swan event starts to happen.
If you and
the company have plenty of assets, then buy these shares without taking a loan based on cryptocurrency (anonymous, unreversible). It's more than weird to come here and ask for a loan of ~$6k when
the company (and you) are worth $10m and is on course (?) to do half-million dollars this year. Plus that you don't have to match the collateral but the loan amount (plus the interest) and in BTC not in fiat. Eg you will have to repay 0.156
BTC either BTC has $10 or $10mil.
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How would you set re-payment amount in dollars and re-pay in bitcoin? I mean each exchange has usd/btc price variations and there's also price variation during the transaction confirmation time, so with fiat there could be conflict over whether the full amount was re-paid? My understanding is also that the goal of btc lenders would be to increase their btc assets, not inflationary fiat assets?
Are you saying that because my company does $500k in profit, I should not go for an extra easy $50k in profit with a few hours of work and in my opinion very low risk?
My understanding is that contract would have incoming and outgoing wallet addresses and amounts are public on blockchain. Any risks I'm missing?
No accounts involved, I'll sign and e-mail a one page contract for shares as collateral and lender will be secured by the Securities Act of 1933 and the US legal system.
You will sign as who exactly? Who will verify that you are the real one and not some other using fake doxs and that this company exists and it's not an empty shell company? An e-mail with a name and a signature? Really now?! And please, don't through laws and acts just to convince us.
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I'll sign as shareholder, it can be notarized and Apostilled. Lender can check from free online state corporate registries that a company exists, when it was incorporated, that it is active, and the annual statements are public and filed with the IRS. There are also many websites where you can put in the name of a US company and they will show a history of the amount of revenue the company has done.
State of Delaware supports digital signatures.
Doesn't support though digital currencies.
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It does. Delaware is one of the top crypto jurisdictions:
https://www.newsbtc.com/news/bitcoin/state-delaware-passes-law-make-blockchain-based-stock-trades-legal/https://cryptolawinsider.com/delaware-crypto-jurisdiction/Imho. it's a more secure collateral than any altcoin.
Just LMAO!!!
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I don't understand what is funny about someone taking your altcoins and you being out of luck? Poly network hack, 99% exchanges have been hacked or operators exited with the coins, vulnerabilities discovered in all hardware wallets, hardware wallets using closed source chips and PRNG (retirement scam), even Trezor has acknowledged this and started work on an open source chip. Two of three most popular bitcoin paper wallet creation websites were stealing your crypto. Ledger database hacked and clients have been targeted by spear phishing attacks almost daily since then. So it's a minefield spiced with volatility and rug pulls for lenders.
With shares (securities) as collateral and doing a deal over the internet (wire), it's secure.
