Tokenizing Private Equity Starting with SpaceX: Interview with Alexander Zaitsev
SpaceX went from Elon Musk's ambitious idea to a company worth over $30 billion. Until now, small investors have had no way to benefit from its rise – but things are changing thanks to USPX, a blockchain asset based on SpaceX shares. We've sat down to talk with Alexander Zaitsev, Head of Strategy at Raison Asset Management, an asset management company participating in the USPX project.
Alexander, what exactly does a USPX token represent?
USPX is a smart contract – what you’d call a token – based on a regulatory-aware protocol created by Ambisafe. This smart contract represents economical interest in SpaceX. Each token is worth one-tenth of a share. As a registered investment adviser, we manage an investment fund, Unicorn Tokenization Corp.
It has SpaceX shares in it its balance, having purchased them on the secondary market. A corresponding number of security tokens is issued by the fund such that each USPX token is fully backed by the shares we own. Token buyers will thus get the same economic benefits as the owners of the underlying shares.
Who's behind the USPX project and Unicorn Tokenization Corp?
We have some of the best companies and minds in the industry on board. First, there's Ambisafe
, led by Andrii Zamovsky – it’s one of the leading platforms globally for issuing security and utility tokens. They've already helped to launch over 100 assets that have together raised $300 million. We are also lucky to have Ambisafe's lead Solidity architect, Oleksii Matiiasevych – he personally saved $1.5 million in the Parity wallet hack two years ago.
I represent Raison Asset Management
, a global portfolio management company and a registered investment adviser regulated by BVI FSC and US SEC. Through Raison’s infrastructure, Unicorn Tokenization Corp has already purchased a substantial package of SpaceX shares.
What's the main advantage of owning USPX tokens as opposed to buying actual SpaceX shares?
The main advantage is that as an average investor, you have no chance of getting a hold of SpaceX stock at all. It's not a public company, and it's not traded on the NYSE, NASDAQ, etc. So the only time it sells its stock is during investment rounds. For example, in 2019, SpaceX did three rounds of funding and raised about $1.3 billion in total. Once a round is completed, you can buy shares on the secondary market – that is, from the shares’ current owners.
But even if you find some stock on sale, the required investment is at least $50,000 and is more likely to be $250,000 or higher, with lots of paperwork involved. So USPX is the only chance for individual investors to get access to SpaceX shares.
So USPX token holders won't actually become owners of SpaceX shares?
No. USPX is a kind of derivative with an underlying asset. We’ve designed it this way to make sure that it’s compliant with legislation. You must understand that we do not resell SpaceX shares to the purchasers of USPX. Rather, USPX is a unit in a fund that was set up for the sole purpose of investing in the underlying asset, in our case SpaceX.
So, USPX holders won't get the right to vote, will not be in the register of SpaceX shareholders, and so on. But they'll be able to trade USPX on certified cryptocurrency exchanges, where all the main economic principles are at work and the price is determined by the supply and demand.
Additionally, every time the valuation of SpaceX goes up, the price of the token will increase, too. So, you get all the benefits of owning a liquid appreciating asset backed by the stock of a huge real-world business. And, of course, as a regular holder of a unit in our fund, each USPX token holder will benefit from the dividends paid on the underlying asset. If SpaceX goes public, it will be a cash-out event for all USPX holders.
SpaceX has tremendous potential for growth. It was valued at $1 billion in 2010 and $10 billion in 2015, and now it's worth $31 billion. Every time a test flight succeeds, the price goes up. It's one of the largest private companies in the aerospace industry. They are already flying supplies to the ISS in uncrewed dragons, and now that they've successfully tested the engines of Crew Dragon, they'll soon do manned flights as well. There's a round-the-moon mission planned for 2023, and all the seats have already been sold.
Another reason why we decided to focus on SpaceX is that you can't buy its shares on the primary stock market. It's one of those assets that all investors want but almost none can get, except for whales like Google, Bank of America, and so on.
What will happen if SpaceX goes public?
If SpaceX does an IPO, Unicorn Tokenization Corp will sell its shares and distribute the proceeds to the token holders, minus the applicable fees. But the “if” here is a big one – Musk might never take SpaceX public at all. He did so with Tesla and regretted it afterward. If there's no IPO, USPX tokens will remain the only way for small buyers around the world to participate in the success of SpaceX.
USPX is available on multiple platforms: Orderbook
by Ambisafe and Raison
, offered by Raison Asset Management. The minimum purchase is just 100 EUR, and you can pay in BTC, ETH, or USD or with PayPal, SwiftWire, or a SEPA transfer. Large buyers are eligible for additional discounts.
I should mention that we can't sell USPX tokens to citizens and residents of the US, Singapore, Japan, and Switzerland. For all others, there's a KYC and AML check, and buyers are subject to the security laws in their own country.
Will the token holders be able to sell their USPX to others?
Of course. At the end of November 2019, we’ll be launching a secondary market. You’ll be able to trade your tokens on several platforms: Orderbook, Latoken, Vertex.market, and Codex.one. A little bit later, we’ll enable USPX trading on Raison, too.
Where can potential buyers consult your legal documents – for example, the fund incorporation certificate or a share availability confirmation?
All the documents are available on the official USPX website at https://spacex.orderbook.io/
. After the KYC is successfully completed, customers can also get the main document of the fund – the Private Placement Memorandum.
Are you planning to tokenize shares of other companies?
Sure. We are already working on adding Reddit and Airbnb and looking into many other potential options. I am convinced that tokenization or corporate stock is one of the best real-world use cases for blockchain. It's only a matter of time until it becomes completely commonplace – and by that time, our fund will be a long way ahead of the competition.
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