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As ICOs give way to STOs in terms of fund-raising, the general sentiment of entrepreneurs is turning towards STOs. These entrepreneurs are tokenizing use-cases one by one and bringing entire ecosystems on the Blockchain. But, are these ecosystems sustainable? Will the people adapt the tokenized life and use token A to perform activities A1 and A2, use token B to perform activities B1, B2, and B3, and so on and so forth?
People embraced the Fiat currencies because of their universality — the ability to be exchanged for another of equal value. Cryptocurrencies such as bitcoin and Ethereum began to find traction with the users for this reason alone. They had the potential to be — the one coin to rule them all. That they allowed disintermediation by excluding banks was the icing on the cake.
I got in touch with the Founders of the MintHealth team, an STO based on the Polymath platform. Since the Polymath platform has received much media attention in the STO space, it seems apt to get the views and insights from someone who is already conducting an STO.
We are excited to work with Polymath in their efforts to create the gold standard platform for issuing securities in a fashion that protects both the investor and the company looking to bring meaningful improvements to industries across the globe. In regards to the actual offering, we are excited to be partnered with Open Finance to enable liquidity of MHST.
MintHealth will use Polymath’s Security Token Standard Protocol, ST-20, which simplifies the process of creating and investing in MHST while embedding legal and regulatory compliance into the tokens themselves. The Polymath platform will enable the MintHealth Security token to become programmable equity affording greater control and customization over the equity. The MHST can be traded 24/7 without the need for intermediaries or centralized controlling functions.
You will absolutely see the rise of the security token. In fact, industry analysts and leaders predict that 25% ($20 Trillion) of the existing global equity market of $80 Trillion will be security tokens in the next 3 to 5 years, driven primarily by the massive influx of institutional capital. The Security token is an incredible tool for companies as they enable stakeholders to participate in the growth of a company and reap the benefits of its success in an SEC compliant manner.
As for the novel dual token structure, we see this as necessary for our company, and likely will become more common in the future. Several industries can benefit from incentivizing consumers. A growing spectrum of industries already have loyalty programs (think Amazon, CVS, Amex etc). As more companies leverage Blockchain, it is likely the fruits of a dual token structure will become more apparent and widely leveraged.
Each year, around 40 million people die from chronic conditions, like diabetes and heart disease. Although these conditions are largely preventable, many still put themselves at risk through poor food choices, sedentary lifestyles, excessive alcohol use, medication non-compliance, and smoking. In addition, patients with chronic conditions may see a physician only every three to six months, largely ignoring their condition(s) in between visits. Data clearly show that patients who are engaged have better outcomes, but we haven’t given them the means to do so.
Patients often have limited access to the medical information in their electronic health record (EHR). If they want to see a specialist in a different network, it’s unlikely the two siloed EHRs even talk to each other. If they have any personal devices, like a FitBit, or use an app like myfitnesspal, it is unlikely that data has been incorporated into their health record. The blockchain is adaptable, portable and, most importantly, secure, thereby allowing all patient clinical, imaging, and behavioral data to be seamlessly and securely transferred from patient to doctor, to caregivers, and back.
Crypto-Securities, also known as security tokens, are designed to overcome current challenges by tokenizing securities tradeable on the Blockchain, where the main use-case, is the anticipation of future profits in the form of dividends, revenue share and/or price appreciation. We believe regulated security tokens are more sustainable means of capital raising and offer investors an opportunity to actually own a piece of blockchain based projects.
As with many aspects of the Blockchain space, there is a lack of baseline knowledge around these concerns. A security token is basically a traditional equity security that is represented by a token on the Blockchain. The concerns around governance are not unique to Security Tokens, rather related to how the smart contracts are applied to the same governance guidelines used in today’s capital markets.
MintHealth Security Tokens (MHST) will be a security token offered through a Regulation D private sale process as well as a Reg CF on StartEngine (Check that out here: https://www.startengine.com/minthealth). The MHST token will entitle holders to i) a 10% royalty percentage of revenues generated through the sale of VIDA by MintHealth and ii) equity ownership in MintHealth. This structure provides a unique balance of participation in ecosystem growth and an equity ownership stake in MintHealth as a company.
There is dramatic and intense innovation underway across “competing” Ethereum-based networks. We believe smart contracts are a powerful capability that enables the MintHealth PaaS. This innovation is occurring not only on the “legacy” public Ethereum network but through projects such as Stellar and many others. Depending on the specific requirements a project might have, the Ethereum network is viable. In MintHealth’s case, we will be deploying a “hybrid” model whereby we will use both public and private networks that can leverage smart contracts.
MintHealth Vidamints™ (VIDA) will operate as the rewards and incentive system on the MintHealth platform where Patients will earn VIDA as a reward for completing healthy activities. Patients will then be able to redeem VIDA for rewards in a similar fashion to frequent flier miles or other loyalty program point systems. In this case, the purchaser of the Vidamints will be insurance companies, corporate wellness programs, and any other entity that takes on the financial risk in caring for patients with diseases like obesity, diabetes, hypertension, among many other preventable chronic conditions. The VIDA token will not be used for capital raising. It will be a loyalty/utility token that is sold at a fixed price and will be tracked and transparent via the Blockchain.
No cautionary tales, but we are very excited to be joining forces with Polymath as they aid our vision of achieving clinical outcomes and financial rewards like never before leveraging Polymath’s automated and scalable platform that helps companies issue securities on the blockchain. As our Co-founder & CEO Samir Damani stated, “We are excited to work with Polymath in their trailblazing efforts to create the gold standard platform for issuing securities in a fashion that protects both the investor and the company looking to bring meaningful improvements to industries across the globe.”