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TL;DR: Crypto Bonds ... Initial Loan Procurements (ILPs) have emerged as a new fundraising method. Similar to an ICO but in the form of loans rather than coin
by pryelluw 9y ago
TL;DR: Crypto Bonds
... Initial Loan Procurements (ILPs) have emerged as a new fundraising method. Similar to an ICO but in the form of loans rather than coin acquisitions, ILPs enable borrowers and creditors to enter into a loan agreement through legally binding smart contracts. With an ILP, a creditor's investment is contractually tied to the performance of the company and eliminates the wild swings of volatility that have been associated with a vast number of ICOs. In simple terms, as long as the company makes a profit, the creditor gets annual returns...
- nemild 9y agoBut if it's an entitlement to a % of profits, then it is much more like equity.
- pryelluw 9y agoIt's a contract to get dividends on a loan that is based on speculation of profit (not tied to any assets). So, yes, a worse version of equity in a startup.
- JumpCrisscross 9y ago> a worse version of equity in a startup Minus the enforceability or equity and bond claims. So a combination of the worst elements of equity and debt plus additional negatives. Financial innovation at its finest...
- pryelluw 9y agoIt being blockchain based makes it innovative. I mean, it's linked lists 2.0: electro bugaloo
- charlesdm 9y agoIt's a profit participating loan (PPL)
- deleted 9y ago[deleted]