🔒 Security tokens are the real stablecoins

The LUNA fiasco could have been prevented via regulation

Jonah Schulman
June 06, 2022

Welcome to the 14 new Rainmakers who have joined us since last week. Join the 2,717 others who are laughing, learning, and staying at the forefront of tech every week!

Gooood morning, Rainmakers! ☀️

As always, I have two captivating topics for you to dive into: 

1️⃣ 🔒 Security Tokens are the real stablecoins: Security tokens are seen as more 'stable' assets compared to crypto because they are legally and compliantly backed by an underlying asset!

2️⃣ 🎶 Tokenized Music Financing: Hear how the multi-platinum artist, KYLE, is leveraging security tokens!

Without further ado, it's time to…

Get liquid 💧

🔒 Security tokens are the real stablecoins

WOW!

I mean, the last few weeks in crypto have been absolutely ludicrous.

All the skeptics of our industry came out of their cave and were seen chanting "I told you so" after LUNA plummeted to almost zero and UST lost its peg to the USD.

WRONG!

Just because one cryptocurrency project didn't come to fruition does not mean the rest of them will go up in flames.

Here's a reality check: It is factual that LUNA, Bitcoin, Ethereum, NFTs, and security tokens all run on the blockchain, but they are actually entirely different.

However, there's something to be said about regularity clarity for these types of assets and use cases. 

I specifically became perplexed and quite worrisome when I read how the reboot of LUNA was being rolled out.

For those of you who don't know when a company goes bankrupt, the first parties to be paid out are the debt holders followed by the equity holders.

In the case of Terra, this is how the company 'appears' to be structured:

- Terra: The company

- LUNA: The equity of Terra

- UST: The debt of Terra

LUNA looks like equity because it has no fixed value, it went up as the optimism for Terra grew and went down when Terra imploded.

However, because these are not securities (by the law at least) those distinctions and requirements are not relevant here.

LUNA 2.0 has since been launched and for the damaged UST and LUNA holders, they released the payout details to the 'debt-like' and 'equity-like' holders:

I know, very interesting indeed.

Why are the LUNA holders receiving a much higher distribution than the UST holders, if UST is supposed to be debt and LUNA is supposed to be equity?

Well, the answer to that is LUNA and UST aren't technically debt or equity, so they can do whatever they want.

That's exactly why we need regulation more than ever!

Many people are losing their life savings overnight.

The moral of the story here is to stay safe and always do your own research, but the wild west continues to become wilder.

🎶 Tokenized music financing

The era of music financing is being disrupted drastically by the implementation of blockchain technology.

Artists no longer have to seek music labels or outside financing to finance their music aspirations.

They also don't have to rely on the success of their music to ensure a return. 

Did you catch that? 

"They also don't have to rely on the success of their music to ensure a return."

That's exactly what the multi-platinum artist KYLE is doing here.

Due to the fact that KYLE has enjoyed 2B streams and over 650M views on YouTube across his content, he has curated a strong community and fans of his music, which enables additional monetization opportunities.

KYLE has contracted Opulous and WeFunder to offer a rare investment opportunity for his fans and interested parties to capture royalties to the performance of his album, It's Not So Bad.

Once the round closes, KYLE will receive the upfront capital from investors in return for royalty rights tied to the album's performance.

Let's take a look at the deal terms:

Deal Terms:

  • Location: Wefunder
  • Sale Date: Wednesday, June 1st, 2022.
  • MFT: Kyle It’s Not So Bad (full album)
  • Campaign Amount: USD $550,000
  • Royalty Split: 27.5%
  • Price Per Token: $1
  • Tokens Available: 550,000
  • Minimum Investment Amount: $200
  • Bonus perks: Artwork NFTs with perks including VIP experiences, a studio session with KYLE, and exclusive merchandise

It looks to me that Opulous has finally figured out the acronym for their investment products, MFT (music fungible token).

At first, they wanted to attract the mainstream by calling these investment products S-NFTs, which stood for Security-NFT.

They have since rebranded to MFT, which makes more sense because they are offering fungible securities and not non-fungible securities.

As of 06/02/2022, they have raised $152,153 from 263 investors and counting.

A quote from KYLE sums this opportunity up pretty well: 

"I wanted to release a whole MFT album with Opulous so that my fans and I can get closer to a model of becoming successful as a unit, redefining success together. Sharing this experience with fans and maybe even friends and family is a valuable thing. I don’t think anything will be able to match the feeling as we cross the finish line together.”  

- KYLE

Congratulations to the team and everyone who was involved - we look forward to seeing more opportunities like this!

💦 What else is Drippin’

  1. The Security Token Market Crowdfund has passed $6.6M from 1,179 people in pledges:  Pledge now and reserve your spot to invest with us!
  2. Former OpenSea exec arrested and charged with insider trading of NFTs: Just because they aren't deemed securities doesn't mean it's the wild west always.
  3. STO Exchange ERX Starts Distributing Rental Income To SIRIHUB Token Holders: Dividends for security token holders of Sirihub!

Everything in this report is for informational and entertainment purposes only. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.

Disclosures:

• No money or other consideration is being solicited, and if sent in response, will not be accepted;

 • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through the platform of an intermediary (funding portal or broker-dealer); and 

• A person’s indication of interest includes no obligation or commitment of any kind.

Subscribe to What's Drippin'

Subscribe to laugh, learn, and stay informed on all things security tokens every Monday!

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.