[FUND] - MCD Application by Fundament (Real Estate Security token)

Hi

We are hereby applying to add the Fundament Real Estate Token as a collateral to MCD.

Project website: www.fundament.group

Quick Summary: We offer the first Real Estate Token fully approved by the German Financial Market Authority (BaFin) that represent a portfolio of German Commercial Real Estate – which generates a planned annual yield of 4% plus returns from possible sales revenues.

Technical Specifications

What is the token contract address?

  • ERC20 Token Contract Address:
    0x423D8321be3DD7EbFF5B6c7da2EF6614B8547acf
  • Crowdsale Contract Address:
    0x97492124f65B499b3328A9BC87FEf164D309c9b7

Where can the source code be viewed? Please provide links to the source code for all contracts providing functionality to the token, including, but not limited to, transfers, freezes, whitelists, blacklists, transaction approvals/rejections, authorizations, upgradability, etc.

  • View on etherscan for this token contract: 0x423d8321be3dd7ebff5b6c7da2ef6614b8547acf#code

Which token standard does your token comply with?

  • ERC20

Does the token have any special mechanics for handling forks? This may include forks in the token app or in the underlying blockchain.

  • No. Forks will be handled be the issuer of the token who will determine which chain to honor. In principle, the issuer will honor the chain where the majority of the network moves to in order to provide utility to the highest number of people.

If yes, please provide a reference to more information on fork handling.

  • not applicable

My token fits with the following Dai Credit System adapter:

  • GemJoin

Has the token passed formal verification?

  • We use the standard OpenZeppelin implementation. The OpenZeppelin code has been audited by Level K

Overview Questions

Please provide a short summary of your project.

  • Fundament offers an asset-backed security token for real estate investments with a fully approved prospectus by the German Federal Financial Supervisory Authority (BaFin). Investors can choose to invest in EUR or in the cryptocurrency ETH. Repayments will be made accordingly. The token generates a planned annual yield of 4% plus returns from possible sales revenues. The Token will bring liquidity into a traditional illiquid asset class and will be able to be traded on both licensed exchanges as well as decentralized exchanges 24/7.

Please list the founding members.

  • Management Board and Shareholders
    • Thomas Ermel
    • Felix Ermel
    • Dr. Alexander Reichhuber
    • Jan Webering
  • Advisors
    • Florian Glatz
    • Robin Matzke

What type of crypto asset is it (utility, work, governance, etc)?

  • Security token (=tokenized bond). A bond is a traditional financial product that can have a variety of characteristics. One key characteristic is the repayment of the invested amount at the end of the term, which is accompanied by a fixed or variable return throughout the lifecycle of the bond. The Fundament Real Estate Token is no different: the issuer is obliged to pay back 100% of the investment at the end of term, as well as a variable return that depends on the performance of the assets. Fundament expects the current return of the Real Estate Token to be around 4% p.a. from rents. In case a property is sold, the expected return could double to 8% p.a. from sales proceeds that will be passed on to the investors.
  • more info on medium and on our website

What was the date of the ICO?

  • October 9th, 2019; it’s an STO not an ICO

What was the initial price and valuation?

  • EUR 1 per Token

How much capital was raised (in USD and crypto terms)?

  • Hard cap is EUR250; can be increased later on

What was the token distribution breakdown?

  • 100% of the token will go to investors; no free advisor or team-token; no discounts

Are any tokens on a vesting schedule? If so, what is that schedule? Describe any related vestiture limitations.

  • No

What are the circulating and total supply of the token?

  • Currently there can be a maximum total supply of 250MM Token. Later on, more token can be issued by way of a capital increase.

What is the wallet address of the treasury?

  • 0x69A369AAB606d737e1c5c47D51C6031f130c3444

How much of the ICO raise was converted into fiat (described in both terms of that fiat currency and the amount of tokens?

  • 100% of cryptocurrencies/tokens received in the public sale of the Fundament Real Estate Token will be converted into fiat

Were there any pre-ICO seed investors? Who and what were their respective allocations?

  • No. All Fundament Real Estate Token are sold at the same price to all investors. Fundament may charge an agio of up to 5% from investors during the placement period of up to one year. That may be the case when the real estate portfolio has risen in value due to certain project acquisitions so as to prevent earlier investors to be diluted.

Fundamentals

Please link to the whitepaper and/or pitch deck related to the token.

Please link to the most updated roadmap for your project.

  • cf. investor brochure for the investment strategy of the real estate
  • cf. blog post on the token on medium, see user @fundamentgroup

How many employees and contractors does your project have?

  • 8 team members; various marketing agencies and placement agents

What is the monthly burn rate?

  • this information is not public

What is the strategy for treasury management?

  • The asset manager of the token issuing entity is responsible for the treasury management. The treasury will be 100% fiat. All proceeds from the token sale will be invested into German commercial real estate projects.

Markets

  • Token distribution is global. The asset manager invests all the proceeds into German commercial real estate projects.

Which exchanges is your token listed on?

  • TBA; in principle all regulated security token exchanges as well as decentralized exchanges

Are you aware of any paid market makers for your asset?

  • No

Does your token have custodial support? Where/with whom? Please provide a copy of the custodial agreement if available.

  • Fundament cooperates with an external service provider to offer a token custody solution for institutional investors.

Community

  • We’re currently building a global community

Please link your email, Telegram, subreddit, Discord, Twitter, Medium.

  • contact @ fundament.group
  • twitter: @GroupFundament
  • medium: @fundamentgroup
  • telegram: fundamentgroup_invest

What is the website of your project?

  • www . fundament . group

Legal Specifications

Who is the token issuer (if any)?

The issuer is Fundament RE Germany GmbH - a limited liability company according to German corporate law. The issuer is registered with the District Court Hamburg (registration number HRB 150935). You can find the issuer with the registration number in the official digital commercial registry of Germany

Do you have legal representation related (1) to the issuance of the token, (2) regulatory requirements regarding the token, or (3) otherwise? If so, whom?

Fundament employs its own inhouse legal team. If required, third party legal opinions can be provided.

What is the regulatory status of the token? Please provide relevant documentation (e.g., legal opinions, prospectuses, public disclosures, filing documents, etc.).

The securities prospectus is fully approved by the German Federal Financial Markets Authority (BaFin). You can download the official (i.e. German) version with English terms from the official BaFin or an unofficial full English translation from our website. We can also refer to the official coindesk article published on the news that Fundament got BaFin approval where an official BaFin employee gave a statement to coindesk confirming that BaFin has indeed approved the Fundament Real Estate prospectus, also linked on our website.

Are there any rights associated with the token that do not follow from its technical implementation or technical ramifications of the system in which the token is used? If so, what are they? How are they enforced? Please provide documentation memorializing these rights.

Token holders are legally entitled to the full economic profit from the real estate investments. The return is variable without upside limitation. At the end of term (2033), the token holders are entitled to claim back dividends as well as the nominal amount of 1 € per token.

In what jurisdiction(s) was the token issued?? Please provide all filings and public documents related to the token’s issuance.

The Fundament Real Estate Token are issued in Germany.

Was the token issued as part of a regulatory process (e.g., securities offering)? If so, under which law, rule and/or regulation was the token issued? Please provide all documents related to this regulatory issuance process (to the extent not already provided in response to the above).

The Fundament Real Estate is issued according to German and European law. For any further information, please read the approved prospectus (see above).

Was the token issued as part of the fundraising process for your project? If yes, who are the investors and how much equity do they respectively hold?

All proceeds from the issuance of the Fundament Real Estate Token will be invested according to the terms of the issuance, i.e. in German real estate properties. The token is not and cannot be used for any other purpose. 100% of the investment will be invested according to the investment strategy laid out on in the prospectus.

Please describe the corporate and legal structure of the project/system/product in which the token is used.

The issuer is a German limited liability company (GmbH) based in Hamburg, called Fundament RE Germany GmbH.

6 Likes

Hi Maker-Community,

happy to answer all questions!

1 Like

Hi this is very exciting, welcome to maker! Here’s my first group of questions that came up during review of the security prospectus. I couldn’t find answer in the document, but I could of missed it.

“The Issuer has the right to terminate the token-based bonds in total before the end of the term, subject to a 30-day notice period at the end of each calendar month, but no earlier than 31.12.2025 (ordinary termination right)…Unless previously fully repurchased, token-based bonds will be repaid in the amount of their repayment amount on the last day of the month following the month of maturity without interest being payable on the repayment amount between the maturity date and the maturity date itself.”

What does this termination process look like and what events could lead to it?

How are individual tokens identified for cancellation, especially since the FUND tokens are tradable on DEXs? (with zk stuff anonymous exchanges will be around soon) What would lead to cancellation of only some FUND tokens.

Technically how would termination interface with FUND tokens locked in CDPs?

Is the annual interest payout in ether sent to wallets holding token? What if token is held in exchange wallets?

3 Likes

Hi @Fundament_Group and welcome,

First of all I will give you thumbs up for applying for CDP approval a day after kicking off your STO, you are most definitely not wasting any time :slight_smile:

Real estate tokens such as FUND are in theory prime material for CDPs. You are however the first real estate project to seek such approval so if the community asks uninformed or tone-deaf questions there is no ill will involved, just an online group of very different people that will need to learn about your business and your token contracts.

The present model for approving tokens to become CDP approved is aimed towards governance and utility type tokens, not security tokens such as yours so there will be a slightly different focus compared to ICO type tokens. This will be necessary as centralised assets such as STOs present different risks compared to decentralized governance and utility tokens.

I will start of with some very basic questions:

  1. Who is the person handing in the application (in this case @peterpan) and is he/she acting with the approval of the Fundament Group CEO? I do not want to sound overly paranoid but in theory @peterpan might not even be working for Fundament Group. This is highly unlikely to be an issue in this case but will be of importance later on as there are multiple thousands of real estate companies worldwide and we need a streamlined process for onboarding them.

  2. How will the bond yield distribution work with regards to the FUND token? How does the distribution (if any) work when the FUND token in locked up in an CDP?

Slightly more difficult questions:
All STOs (not just FUND) are vulnerable to exits. A company could raise funds and issue tokens, but the company might face difficulties and might not be able to fulfill its obligations to token holders. We therefore need to check the legal link between your FUND token and the bonds issued in order to prevent doublespend and to gain insight to what happens if the company must halt operations for any reason.

  1. Please describe legal link between FUND tokens and the bonds sold by Fundament Group. In the case of Fundament Group ceasing operations, how will a FUND holder in Argentinia be able to get a (partial) refund? What legal priority does FUND holders have in case of liquedation? Behind employees? Behind employees and fiat bank? I am sure you have been over this with BaFin multiple times but we have not.
  2. Please describe the process that proves that Fundament Group is not able to issue more FUND tokens than is guaranteed by bond sales. This might be a tricky one as we would prefer a API link either to you or to BaFin. I am certain you have thought this one through and are able to deliver much better feeds compared to the annual lawyer statements of Tether.
4 Likes

Welcome to Maker!

To expand on @Planet_X’s questions, could you list the conditions known to you under which German law could partially or completely sever the legal link between FUND tokens and their underlying rights, for a) individual investor entities or b) all FUND tokens? The doublespend example by @Planet_X is such a condition. Any historical example related to German real estate bonds rapidly changing value following legal action would be appreciated.

“The Issuer has the right to terminate the token-based bonds in total before the end of the term, subject to a 30-day notice period at the end of each calendar month, but no earlier than 31.12.2025 (ordinary termination right)…Unless previously fully repurchased, token-based bonds will be repaid in the amount of their repayment amount on the last day of the month following the month of maturity without interest being payable on the repayment amount between the maturity date and the maturity date itself.”
What does this termination process look like and what events could lead to it?

This clause essentially codifies a unilateral right of the issuer to terminate all the contracts between the issuer and the investor.

The issuer could be interested to do this, e.g. when they receive an interesting buy-out offer for the total portfolio in the fund. Generally-speaking this is not a likely event to occur but contractually-speaking the option exists.

Technically, the issuer would send an email to all token holders of which they possess a confirmed email address. For all other token holders (i.e. those who acquired their token on the aftermarket), the issuer would publish the cancellation notice on the website of the issuer.

Once cancelled, token holders have somewhere between 3 and 4 years time to give their token back to the issuer in return for the repayment amount. That timespan is determined by German statute of limitation. How that affects token locked up in CDPs, please read answer below.

How are individual tokens identified for cancellation, especially since the FUND tokens are tradable on DEXs? (with zk stuff anonymous exchanges will be around soon) What would lead to cancellation of only some FUND tokens.

It is very unlikely that individual bonds will be cancelled. It could happen, if - for example - it is unlawful to maintain the contractual relationship with the specific investor due to a court order.

Technically how would termination interface with FUND tokens locked in CDPs?

As mentioned above, should the bonds be cancelled (all at once) prematurely, then token holders have 3-4 years after cancellation to get the token out of CDPs and transfer them back to the issuer to receive the repayment amount.

If that time should not be sufficient (which is something we would love to learn about here in this discussion), we could imagine a deterministic smart contract-based solution to the problem. E.g. upon expiration of repayment claims by token holders (i.e. 3+ years after cancellation of the bonds) the issuer could determine the amount of FUND token still locked up in CDPs and park the corresponding total repayment amount as DAI in a smart contract. Once a FUND token is then removed from a CDP the token holder could transfer the token to the issuer’s DAI repayment contract and receive the repayment amount. In addition to simply sending the FUND token to the repayment contract, the token holder potentially has to present an on-chain-verifiable proof, that they had that amount of token locked up in a given CDP contract at the day of expiration of the underlying repayment claims. This is to prevent potential abuse cases.

In principle, the same mechanism can be applied to repayment at the time of maturity of the bond (i.e. end of term) as well as to annual dividend payments. Whenever any of these legal claims expires, the issuer can deploy a smart contract where the (re-)payment sum corresponding to token locked-up in CDPs is parked and deterministically paid out to qualified token holders.

Is the annual interest payout in ether sent to wallets holding token? What if token is held in exchange wallets?

No, we prefer a pull mechanism for obvious reasons. On a blockchain, you should never send anything to any address without prior confirmation of whoever controls that address. Instead, we will provide a smart contract that allows token holders to pull the respective dividends into their wallets. Conveniently, token holders will pay the individual transaction fees for that.

Token holders can choose whether they want repayment in crypto or fiat. We are working on providing multiple crypto currencies for (re-)payment. Needless to say that we would love to offer repayments in DAI :slight_smile:

1 Like

First of all I will give you thumbs up for applying for CDP approval a day after kicking off your STO, you are most definitely not wasting any time

Thank you! We see great potential in FUND token becoming a collateral in CDP. I think we all share this excitement here. <3

Real estate tokens such as FUND are in theory prime material for CDPs. You are however the first real estate project to seek such approval so if the community asks uninformed or tone-deaf questions there is no ill will involved, just an online group of very different people that will need to learn about your business and your token contracts.

Thank you for the heads up. We are ourselves comprised of a mix of crypto and legal people, so we’re having these conversations for 2 years already internally in our team. We have a massive amount of respect for the maker community and what you guys have built over the past years. It’s a truly a massive ecosystem and amazing community. We are proud to join the family and we’ll be super respectful with regards to all questions asked. There are no stupid questions, just bad answers.

The present model for approving tokens to become CDP approved is aimed towards governance and utility type tokens, not security tokens such as yours so there will be a slightly different focus compared to ICO type tokens. This will be necessary as centralised assets such as STOs present different risks compared to decentralized governance and utility tokens.

Makes total sense. Indeed, the risk profile is partially different and to us it’s super important that both sides develop an appropriate understanding of that. In our experience that also means that we have to resolve some of the unfounded paranoia of crypto people when it comes to the legal system. We have encountered many unwarranted fears around KYC and AML-related topics, just to name one topic. We want to keep the discussion focused around actual constraints defined in the written law, as opposed to hearsay of what is and isn’t – supposedly – possibly today de lege lata (to drop a fancy lawyer expression here)

I will start of with some very basic questions:

  1. Who is the person handing in the application (in this case @peterpan and is he/she acting with the approval of the Fundament Group CEO? I do not want to sound overly paranoid but in theory @peterpan might not even be working for Fundament Group. This is highly unlikely to be an issue in this case but will be of importance later on as there are multiple thousands of real estate companies worldwide and we need a streamlined process for onboarding them.

I am part of the Fundament team. As a proof, we have shared our application within our Telegram Group (cf. link on official website) from the Investor Relations admin-account.

  1. How will the bond yield distribution work with regards to the FUND token? How does the distribution (if any) work when the FUND token in locked up in an CDP?

See my previous answer ITT. To recap:

  • token holders’ legal claims for (re-)payment have an expiration date of 3+ years
  • once a claim expires, issuer could set up a deterministic repayment contract filled with DAI for the amount of token still locked up in CDPs at expiry date
  • from then on, token holders can trigger payment anytime through smart contract by sending token to the smart contract & possibly an on-chain verifiable proof that the token were locked up in a given CDP at expiry date of legal claim

Slightly more difficult questions:
All STOs (not just FUND) are vulnerable to exits.

You mean the issuing entity could go insolvent/bankrupt? Yes, that is a risk that we have also mentioned explicitly many times in the prospectus for purposes of investor protection.

Kind of offtopic but still relevant IMHO, the same risk applies to any ICO ever done. An ICO’s issuing entity could also go bankrupt with the result that token holders cannot expect any (more) of the promised functionality behind the token to be actually developed and implemented. In fact, that risk has realized itself in a growing number of instances, see e.g. envion or base coin.

As a matter of fact, the issuer of the FUND token is not a “startup” in a classical sense. The asset management team of Fundament Real Estate is not developing fancy/unproven technology or trying to build a multi-sided market/platform of any kind. Quite the opposite, the asset managers are buying and selling German (commercial) real estate.

Of course there are risks around that and all of them are explicitly discussed in the prospectus. But the risk of this failing is very much different from any normal startup out there.

But even in case of bankruptcy of the issuer, an insolvency administrator will take over control and will sell off all the assets of the issuer and disburse the profits to the investors. This procedure is supervised by the courts in Germany. This is one of the many reasons why we picked Germany as the base jurisdiction: there is a reliable set of institutions prepared to handle such cases for the benefit of investors.

A company could raise funds and issue tokens, but the company might face difficulties and might not be able to fulfill its obligations to token holders. We therefore need to check the legal link between your FUND token and the bonds issued in order to prevent doublespend and to gain insight to what happens if the company must halt operations for any reason.

  1. Please describe legal link between FUND tokens and the bonds sold by Fundament Group. In the case of Fundament Group ceasing operations, how will a FUND holder in Argentinia be able to get a (partial) refund? What legal priority does FUND holders have in case of liquedation? Behind employees? Behind employees and fiat bank? I am sure you have been over this with BaFin multiple times but we have not.

The FUND token is the bond itself. Holding the token in your wallet is like keeping a paper certificate of some shares under your pillow. Yes, you heard right. This is the crazy innovation behind all of what we’re doing. We bring back full control over your securities.

The token certifies, that the holder is considered a creditor of the issuer and the issuer treats the token holder as such.

There are no parallel structures or rivalry of bookkeeping systems (on- and off-chain). The only valid ledger Fundament Real Estate will acknowledge is its Token Smart Contract on the public Ethereum network. It is that simple.

There is not any kind of “intermediation” between the token itself and the legal claims (in total referred to as “the bond”) it represents. This means that by holding the token you actually hold the financial instrument, just as if you held a paper-based bond in your hand. In the timespan between the de-facto abolishment of paper-based bonds and now, where we introduce token-based bonds, it was de facto not possible for investors to actually own the bonds they bought themselves. So this is truly the biggest innovation in all of this. The FUND token is essentially a digital bearer instrument!

When token holders want to trigger a payment based on a claim enshrined in the bond/token, they simply interact with the issuer either through our investor dashboard or through a smart contract provided by the issuer (see some of the examples stated in my previous answer ITT).

Please describe the process that proves that Fundament Group is not able to issue more FUND tokens than is guaranteed by bond sales. This might be a tricky one as we would prefer a API link either to you or to BaFin. I am certain you have thought this one through and are able to deliver much better feeds compared to the annual lawyer statements of Tether.

The limit of tokens that can be minted is stipulated in the prospectus. You can check it out in the official database of BaFin. Click here: https://portal.mvp.bafin.de/database/VPInfo/prospekt.do?bereich=3&details=true&cmd=zeigeProspektEmittentenSuche&id=25958886&typId=40&locale=en_GB

If you issue more token than you are allowed to sell, you have BaFin (German Financial Market Authority) and the Bundesbank (German Central Bank) coming after you. On this note, there has never been a Fundament Token that has not been bought for 1€ per token. There are no free tokens for team or advisors etc. All token will be sold. There is no dilution for our investors.

Once the official placement period is over, we could hand over the ability to mint new token to 0x0. However, we might not do that, in order to retain the ability to issue a second prospectus that allows us to do a capital increase on the current bonds. That means that we would apply to BaFin for the permission to sell more token.

Again, there are no bonds outside the scope of the token smart contract. The smart contract is basically the single source of truth. Thus, everyone is welcome to check out the current amount of tokens using etherscan and make sure it is not exceeding the limit according to the prospectus: 0x423d8321be3dd7ebff5b6c7da2ef6614b8547acf (token contract address)

Regarding lawyer statements: Fundament Real Estate will get audited at least once a year by an external independent auditor. The audit report will be published on our website. In principle, the audit report will look as boring and “unstructured” (in a technical sense) like any other audit document. However, we’re very much interested in providing a structured, standardized data feed on the recent reportings including net asset value of the portfolio etc. However, I don’t believe such a data standard currently exists. If the maker community is interested in developing this, we’d be interested to discuss.

could you list the conditions known to you under which German law could partially or completely sever the legal link between FUND tokens and their underlying rights […] The doublespend example by @Planet_X is such a condition.

double spends are not possible since the only valid “source of truth” that the issuer respects is the official smart contract under this address: 0x423d8321be3dd7ebff5b6c7da2ef6614b8547acf

could you list the conditions known to you under which German law could partially or completely sever the legal link between FUND tokens and their underlying rights

You’re hitting a point that is dogmatically interesting albeit pragmatically irrelevant. The only case we can imagine where the token and the underlying split is in case of a wallet being hacked. Legally-speaking, the thief does not acquire ownership of the token nor the underlying. This situation leads to two questions:

  1. When the thief/hacker sells the token to a third party which is in good faith about the thief/hacker being the actual owner of the token & underlying, can the buyer in principle acquire ownership of the token and the underlying?
  2. When the issuer fulfills the claims of dividend payout & repayment at maturity of the bond, can they pay to whoever is the current token holder, be it the thief/hacker or third party which acquired the token “in good faith” (regardless of whether that was actually possible or not), with effect of discharging their contractual payment obligation?

The answer to question (1.) is disputed in academia and no decision of the highest court in Germany (BGH) exists

The answer to question (2.) is a clear yes: regardless of how you answer question (1.), the issuer can always render their payment obligation in a manner that discharges their contractual duties, except for when they were positively aware of the token holder not being the actual owner. Such a positive awareness, however, can effectively not be created. Because how do you positively prove a hack? Besides positive awareness, gross negligence could also be sufficient. The same applies: under which circumstances could the issuer be grossly negligent about a token holder not being the actual owner of the underlying claims? We cannot imagine a scenario where this is possible.

Long story short, the issuer’s one and only interest is to respect the token smart contract and nothing else. We cannot imagine a practical case, where the issuer had to respect anything other than the token smart contract.

Any historical example related to German real estate bonds rapidly changing value following legal action would be appreciated.

historically, this particular problem where the connection between the certificate of a bond and the underlying legal claim got under attack with the consequence of the underlying losing value rapidly in the market does not exist. for a long time now, investors never had ownership of the actual certificate. all they have is a depot at a bank where they don’t actually own the certificate, just a very narrow contractual relationship with the depot bank.

2 Likes

Thank you for the multiple, detailed answers. As a sidenote, I personally am grateful for the learning opportunity.

It is my understanding that from Maker’s point of view, a plan which gradually reduces collateral value over time is preferable to one which suddenly gives it a value of 0, even if that event is planned in advance. Why? Because with plan 1, when a CDP holder disappears into thin air, Maker can use the gap (however small) between unsafe and undercollateralised to liquidate the asset without incurring net MKR inflation. I may be missing something here so others please correct me if that’s the case :slight_smile:

Anyway that would make the “smart contract with locked DAI” solution much, much better. However it also looks like this solution would make you go beyond what’s expected & your legal obligations, right? A possible alternative would be a contract that, starting 3-4 years after cancellation, gradually pays out less and less for the bond tokens.

Unless I’m missing something, the costs associated with minting new bonds from a fresh address carrying a contract copy are negligible compared to giving up on the reputational benefits of giving minting authority to 0x0. As you mentioned the attitude distribution towards legal guarantees is quite idiosyncratic around Ethereum and other cryptocurrencies. Generally speaking: if there’s something you never intend to do and if no additional risks are created, it is culturally appropriate to tie your own hands with code.

It is still necessary to know exactly what would happen and when given this very unlikely scenario.

1 Like

interesting. i’ll wait for someone else from the community to take a position on this. but makes sense in principle.

Yes, the issuer would go beyond their legal obligations if he setup such a contract at expiry date of the claims. I do like the idea of gradually reducing the payout rate. And it seems to be in line with the gradual reduction over time you mentioned above.

The problem with creating a new smart contract is that this would create a new token as opposed to increasing the supply of the already existing/established/integrated token. That’s the only yet to us quite important reason why we consider leaving minting rights open. Beyond that I fully agree with you that if possible, we should tie your hands with code. I think we’ve done that as much as possible in all respects. As with all questions raised here, we’re open to consider all positions.

In principle the same as with any other payout scenario: a (re)payment claim is created, that claim expires at some point and then again the issuer could transfer unclaimed money to a smart contract to satisfy CDP-locked-up token.

1 Like

Is someone with coding skills checking the FUND smart contract?

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Let me know if you have any questions regarding the tech audit. Happy to get you in touch with our dev team :slight_smile:

Quick status update from our side: we’re currently engaging with community members to form a risk assessment group for our security token as well as to build a framework that can be used by other projects that will come after us.

In the meantime, we’re happy to discuss and answer more questions.

1 Like

I will refer Fundament Group to the article in the below link. MakerDAO will be preoccupied with the transition to multicollateral DAI for a number of weeks so the resources available for token risk review will be limited until the transition is well underway. This information is just in case you do not hear anything and is thinking Maker has lost interest, which is definitively not the case.

1 Like

Thank you! We are aware and respectful of the current focus of the maker team and the community. In the meantime we’re reaching out to stakeholders within maker and its community who are knowledgeable with regards to the risk assessment process and are gathering initial feedback and data to be able to move fast once MCD is deployed and ready to include other collateral besides ETH.