Apr 12 2021

Simple Agreement Future Tokens

How SAFT works is the developer of a decentralized system that uses tokens, creating a SAFT with their genuine investors. This juice is also called a “contract addressed.” The certificate is accompanied by the agreement that the investor will financially support the project. In addition, they will receive chips at a later date at a discounted price. The company that develops the token network registers with the SEC (Securities and Exchange Commission). However, they do not spend chips at this point. A SAFT is classified as a guarantee, because until the tokens are created and released, investors put their money into a business based on the hope that these tokens will be sold at a higher price once the project is more developed. This meets the most basic definition of a security: to invest in a company while waiting for future profits. As soon as the system is operational, the chips will be distributed to investors. From that date, tokens can ideally be traded on stock markets without restrictions. We believe that the framework presented in the white paper is the best instrument currently available for navigation under US law. It does not just find successful legal structures; it tries to respect the political objectives that drive the law. We think it can do the same for laws around the world.

The SAFT project is a considerable effort to formalize a framework for compliant token sales in many legal systems. Today, most of the work focuses on U.S. regulations and finding a compliant path for selling tokens (usually pre-sale before tokens are useful). We welcome – yes, the project requires – the contributions of participants all over the world. Since cryptocurrency proponents are probably not well aware of securities law and may not have access to financial and legal advisors, it may be easy for them to break the rules. The development of SAFT creates a simple and inexpensive framework that new businesses can use to raise funds while remaining in compliance with the law. STOs allow companies to create whitelists and blacklists that allow them to comply with KYC`s requirements and comply with anti-money laundering (AML) and terrorist financing rules. StOs thus set a new benchmark in terms of transparency. It could help clean up the future of crowdfunding and breathe new life into the encryption market. A SAFT differs from a Simple Agreement for Future Equity (SAFE) that allows investors who invest money in a startup to later convert that share into equity.

Developers use funds from the sale of SAFT to develop the network and technology needed to create a functional je-token, and then provide these tokens to investors expecting that there will be a market on which these tokens can be sold. To simplify, STOs tokens are usually investor-linked for a certain percentage of the company. It`s a bit like stock. The tokens, which come from STOs, provide irregular returns, a stake in the company, participation rate and interest rates. In addition, the description of STOs involves the use of an intelligent contract defining the exact structure of the token. It is in the same vein as an ICO. OVs are UFOs that try to be compatible with the SEC. Unlike ICO, STOs tokens are by definition securities.

These tokens describe tangible assets and offer investors a share of the company`s assets. Which, of course, pays off, especially when the business is thriving. In other words, STOs tokens involve investors at a certain percentage of the company, as do stocks.