💸Taxes? Never heard of 'em

Gaming & capital gains taxes are transforming before our eyes

Gooood Morning Rainmakers,

This newsletter is brought to you by Realio, a blockchain-enabled issuer, fund manager, and technology provider specializing in real estate private equity.

Without further ado, it's time to…

Get liquid 🌊

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Gaming will never be the same 🎮

Okay, so you've heard of Fortnite, World of Warcraft, and other popular online games…

But have you heard of Infinite Fleet??

If you havent, you will soon.

Infinite Fleet is an epic sci-fi massively multiplayer online (MMO) strategy game developed by Pixelmatic, and published by Exordium Limited.

They are disrupting the gaming industry in three ways:

  1. Raising money via an STO

  2. The in-game currency used is a native cryptocurrency

  3. Rare items for use in the game are being sold as NFTs

Let's get basic: STOs or "Security Token Offerings” means an issuer raises money from investors by offering blockchain-based shares or investment contracts that are backed by the company.

At the time of this newsletter going live, they have officially raised over $7M already via STOKR and their private network!

Deal terms:

  • Total Raised:˜$7.2M

  • Fundraising Cap: $8M

  • Investors participated: 813+

  • Type of investment: 20% profit-sharing rights

Very impressive.

However, the most impressive feat has to be the utilization of a cryptocurrency for their in-game currency, as well as using NFTs to represent the in-game spaceships.

The cryptocurrency used in the game is called INF.

It is very similar to any other in-game currencies like Gold for World of Warcraft or V-bucks for Fortnite; the two main ways to earn coins is either by completing missions/tasks or by simply purchasing it.

The main difference for INF is that it’s an actual cryptocurrency - think Dogecoin or Bitcoin, but for different purposes.

This means that players of the game can transfer their coins outside the game into their own crypto wallets and sell them for a profit on a cryptocurrency exchange!

Track the cryptocurrency trading here.

Imagine World of Warcraft or Fortnite enabling this functionality for their in-game currency and allowing users to profit off their performance.

There's no telling how much bigger these games would be.

If Infinite Fleet reaches the magnitude of those games, there will be some financially strong players.

On top of that, Infinite Fleet is capitalizing on the NFT trend by offering their in-game items as NFTs and tradable on a marketplace, just like any other NFT.

They will feature collectible spaceships that players can purchase, sell, and use within the game.

I really like this use case because normally, NFTs don't have a use outside of just ownership, but with these NFTs, the value comes from the game itself, which is super unique!

Samson Mow, one of the creators, tweeted about their success:

Hate Paying Capital Gains Taxes? Use DeFi 💯

What do people hate more than loud chewing in the movie theater?

Paying taxes…

I mean, after all, why should we have to pay the government anything after all the hard work we have done! 😉

That's a topic for another time, but I know a way you can momentarily avoid taxes on your security token & cryptocurrency investments.

Ever heard of DeFi (Decentralized Finance)?

Let's get basic: Decentralized finance is a concept where financial products are available on a public decentralized blockchain network making them open to anyone to use rather than going through a middleman like banks or brokerages.

If you haven’t already, take DeFi out to dinner, get to know its family - you are going to want to know it very well.

Unless, of course, you want to pay the government a large percentage of your realized gains.

When it comes down to any investment, what is the ultimate goal?

To earn a positive return on your investment.

If you don't believe that then you are in the wrong industry 😂

When an investor sells their stake, they usually receive cash for the sale, which includes paying a hefty capital gains tax.

If the investor was selling because they needed cash, they shouldn't be selling.

If they sold for cash, they need to take DeFi out on a second date because clearly, one date wasn't enough to understand what they were all about.

The way DeFi works is you can use your investment as collateral for cash.

You may be wondering, “How is this different from a traditional collateralized loan?”

Great question and the short answer is because traditional loans are cumbersome and just straight-up annoying as heck.

With decentralized finance loans, the whole process is ten-fold more seamless.

The only thing you need to provide is sufficient collateral to take out your loan.

Additionally, because the lender doesn’t know the borrowers’ credit history or have any relevant information, borrowers are required to stake twice the amount they want to take out.

Let's look at an example of two investors:

Investor 1: Holds 2 bitcoins

  • Sells 2 bitcoin for $100K

  • Pays the government a high % in capital gains taxes depending on their income tax bracket

Investor 2: Holds 2 bitcoins

  • Uses their bitcoin as collateral with a DeFi platform (Ex: BlockFi) to take out a loan

  • The 2 bitcoin enables them to take out $50K in cash whilst still possessing the bitcoin and avoiding taxes (because they didn't sell)

I used Bitcoin as an example because it is easy to understand, but you can use this with any asset that is on the blockchain.

This includes real estate, supercars, LP interests, Van Gogh paintings - you name it!

In essence, get to know DeFi, you won't regret it!

What else is making it rain ☔️

Fun fact of the week 🤯

INX Limited was the first-ever SEC-approved security token IPO 

  • They had over 7,200 investors participate in their offering

Game of the Week 🎯

“Which real estate property is tradable on the tZERO marketplace?”

  • The St. Regis Aspen Resort

  • FTX Arena (Miami Heat Arena)

  • The Empire State Building

Reply to this email with what you think the answer is!

If you are right, we will shout you out on our socials 💯

Connect with us ☎️

Thanks for tuning in! Keep an eye out each Monday for the next security token adventure 🧗‍♀️

For any questions, suggestions, etc - email me at Jonah@stomarket.com and follow me on Twitter!

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