Today, we’re excited to unveil the registration process for the Blockstack Token Sale.
When we announced our whitepaper and made our initial announcement of the sale, we mentioned that the broader token distribution system of Blockstack, from the sale to mining, is specifically designed to get tokens in the hands of as many people as possible while complying with applicable law.
We’ve thought hard about what qualities would be most important for the Blockstack token sale to help the Blockstack ecosystem grow and thrive. There have been many token sales since we started thinking about our token distribution (back in Fall 2016) and all of them gave us the opportunity to analyze, learn from, and improve upon various token sale mechanics. We’re very happy with what we’ve come up with and we’re extremely excited to share it with you.
The 8000-member Blockstack community of open-source developers and enthusiasts is the life-blood of the Blockstack ecosystem. So naturally, we made it our goal to make our token sale as inclusive as possible while complying with applicable law.
There are two paths in the registration process - one for accredited investors and one for non-accredited individuals.
Accredited investors generally include anyone with over $1,000,000 in net worth or over $200,000 in annual income for each of the last two years, as well as companies and trusts with over $5,000,000 in assets.
Non-accredited individual registration
The non-accredited individual process will be open to all who don’t qualify as accredited investors.
If you’re a non-accredited individual, you will:
1) download the latest version of the Blockstack Browser at blockstack.org/install
2) fill out your Blockstack ID and verify at least two social media accounts
3) Go to https://blockstack.com/sale-registration and click the “Sign in with Blockstack” button
4) approve the sale registration’s sign in request
5) fill out the final form and submit
After the registration period is over on November 10th, you will have your Blockstack ID reviewed. To ensure you’re a real person, and to give all people an equal and fair opportunity to participate, we may ask you for a photo upload of a government ID. Then, around November 17th you will be sent a “voucher” for free for a future purchase at the same price as the accredited sale.
Each person will be able to redeem the voucher with Blockstack Token LLC to finish the transaction and make the purchase at a later date (subject to applicable law) at the same price as what is paid in the accredited investor sale (more on that later). At the time of purchase, they will be required to present a government ID that matches the legal name on the voucher.
It’s important to note that due to legal constraints, the voucher is not a promise or guarantee, and Blockstack Token LLC has the right not to honor it. If for some reason a voucher is not honored, the user will not pay anything.
Note: If you’re already a user of the Blockstack Browser, you still have to download the latest version (v0.20).
Accredited investor registration
The accredited investor process, meanwhile, will be executed in partnership with CoinList and will be open to anyone who qualifies as an accredited investor.
If you’re an accredited investor, you’ll be able to go to coinlist.co in order to:
1) fill out your identity information
2) get your accreditation status reviewed
3) prepare your funding (in USD, Bitcoin or Ethereum)
After the registration period is over, accredited investors will be able to submit payments and make a purchase in the token sale.
Note that these investors will not be purchasing tokens directly. Instead, they will either (a) buy a “simple agreement for future tokens” or (b) buy fund interests in one of two Delaware Funds that will invest in Blockstack Tokens. Both of these are mechanisms to acquire tokens and the option available to each investor will depend on investment size and whether the investor is, in addition to being an "accredited investor," a "qualified purchaser." More details will be provided in the information on these opportunities, as discussed below.
Further, we’ve put mechanisms in place designed to both help protect investors with their purchase and provide checks and balances on our public benefit corporation (the primary sponsor of the Blockstack network and parent entity in the Blockstack structure) to ensure we spend the money carefully and wisely.
First, only 20% of the proceeds of the accredited investor sale will be available to the company to spend upfront. We believe that the network not going live is one of the biggest risks for any utility token project. As a result, we built a mechanism into our legal framework to allow investors to get up to 80% of their funds back if the network doesn’t go live with the token by a preset milestone date. How much investors will get back will depend on whether they invest in the SAFT or a fund and other terms of each investment.
Second, once the tokens are successfully developed and deployed on the network, the more important thing for the developers and the community to focus on will be to grow the network and the broader ecosystem. Therefore, we built in another mechanism where investors in the Delaware Funds could receive a portion of their funds back if the network doesn’t reach 1,000,000 verified users by a second milestone date. Investors in the SAFTs will not have this feature based on the SAFTs.
This safeguarding mechanism is one we’ve never seen before and we believe it sets a new standard for cryptocurrency token sales. We value checks and balances and responsible distribution and we believe the entire ecosystem will be better served by it as a result. We do stress that all investments involve a risk of loss, and even with the features described below, you could lose all or part of your investment in the SAFTs or the Funds.
There are many additional terms and features of the SAFTs and the Funds, which will be described in the materials provided through blockstack.com and coinlist.co. Before you invest, please review those materials carefully.
Where to Register
You can register for the Blockstack Token Sale today by going to blockstack.com.
Beware of phishing sites. Blockstack Token LLC is the only entity sponsoring the sale and blockstack.com and our partner Coinlist.co are the only websites that can list token offering materials.
Accredited investor and non-accredited individual registration will end November 10th, 2017.
The Blockstack token distribution is a major milestone in the 4-year-history of the Blockstack community and we’re extremely excited to share it with you. Check out our FAQs, please don’t hesitate to ask us questions (via email or twitter), and we look forward to your participation.
Disclaimer: The Blockstack Tokens are a crypto asset that is currently being developed by Blockstack Token LLC, a Delaware limited liability company, whose website can be found at www.blockstack.com. This post does not constitute an offer or sale of Blockstack Tokens (“the Tokens”) or any other mechanism for purchasing the Tokens (such as, without limitation, a fund holding the Tokens or a simple agreement for future tokens related to the Tokens). Any offer or sale of the Tokens or any related instrument will occur only based on definitive offering documents for the Tokens or the applicable instrument.