NeoBroker Smart Fund
NeoBroker Smart Fund is a low-risk investment solution that provides users with the ability to invest in pre-IPO companies (like DigitalOcean, SpaceX, etc.). Users can collectively purchase tokenized securities and receive profits when such securities are redeemed post-IPO.
The feature is enabled through the use of a blockchain-based protocol powered by Ambisafe. This regulatory-aware protocol enables us to create smart contracts that fully automate operational flow, making it more transparent and performative.
Investment APY: ~50% Time horizon: 12–24 months
The smart fund contract communicates with an SEC-regulated investment fund, Unicorn Tokenization Corp. that owns actual shares of the company. Whenever the smart fund has reached maximum monetary capacity, it executes the purchasing transaction, and issues a corresponding amount of fungible tokens, so that each token is backed by an underlying share of a company.
Essentially, tokenized shares can be perceived as stablecoins, but instead of fiat currencies, they’re backed by actual market stocks and grow in price accordingly.
Upon purchase of tokens, investors’ information is saved in the blockchain registry and thus cannot be tampered with or modified. After the purchase, token holders are entitled to receive dividends from the company (if such dividends are paid out). If the company goes public, securities will be redeemed and profits distributed to token holders.
Described below is the interaction process between users and the company’s investment solutions.
The user has two options to deposit funds to a smart fund: either through his own external wallet or via LocalTrade’s payment gateway.
The user specifies the wallet with some balance in crypto or purchases BUSD through LocalTrade’s payment gateway, then chooses a company to invest into. The user sends BUSD to the contract address of the selected smart fund.
As soon as a smart-fund contract reaches a defined threshold of accumulated funds (for example, 50 000 BUSD), the contract initializes the process of purchasing shares in the form of tokenized securities.
Accumulated BUSD (BEP20 network) is swapped to ETH/USD-pegged crypto (ERC20 network) through a cross-chain bridge. The smart-fund contract then sends ETH to purchase pre-IPO shares of a chosen company.
Purchased shares are non-fungible, therefore the smart-fund generates fungible Earnings Security Tokens LCT (sLCT) and distributes these tokens among all investors, in accordance with the investor’s deposited amount.
sLCT tokens represent the user’s stake in the smart fund, ownership rights of the underlying shares and, respectfully, the right of claim for such shares. Users have full control over their sLCT tokens: they can transfer ownership and right of claim on tokenized securities simply by transferring sLCT tokens to another wallet of an eligible user.
Tokenized Securities of pre-IPO companies are contained within the smart-funds contract for the next 12–24 months until the liquidation period ends. According to SEC regulations, shares of US-based companies can be sold 90 days after such a company goes public.
Smart-fund contract utilizes oracles to get the exact IPO date and calculates the redemption date for Tokenized Securities 90 days after the IPO. On redemption day, the smart fund initiates liquidation of Tokenized Securities for USD-pegged crypto (ERC-20 network), which is then deposited to the smart fund’s contract.
Acquired USD-pegged crypto (ERC-20 network) is swapped for BUSD (BEP-20 network) through the cross-chain bridge. After the swap, the smart-fund contract starts distributing BUSD pay-outs between users, according to their ownership stake (amount of sLCT held).
Amount of pay-outs and carry fee are calculated as follows:
- 1.First, the smart-fund contract distributes funds to users, covering the initial deposited amount.
- 2.As soon as the distributed pay-outs reach the deposited amount, the smart fund contract deducts 20% of the following distributing pay-outs as a carry.
- 3.The remaining 80% of the profits are further distributed among users, according to their stake in the smart fund.
In order to withdraw pay-outs, users need to send their sLCT tokens to the smart fund’s contract address. sLCT tokens are burned automatically upon sending.