ICO Insight featuring Sweetbridge

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Sweetbridge Transcript


 

Adam Chapnick:

Scott Nelson the CEO and Founder of Sweetbridge joins us now. Thanks so much for being here Scott.

Scott Nelson:

Adam, thank you for having me.

Adam Chapnick:

It's very exciting to have this conversation, because I've been doing a lot of reading around this, and it just blows my mind page after page. So this is exciting to have you.

Scott Nelson:

Its a bit freaky isn't it.

Adam Chapnick:

Yeah, it is. So let's hit the things sort of the big picture first.

Scott Nelson:

Sure.

Adam Chapnick:

So when's the Ico? When does the sale begin? How much do you plan to raise?

Scott Nelson:

So we plan to raise 64 Million. We've already raised over 10 in pre-sales.

Adam Chapnick:

Tremendous.

Scott Nelson:

And the public sales registration starts the end of this month.

Adam Chapnick:

Okay. So that's great. So the end of this month ... we're in January.

Scott Nelson:

Yep the very end of the month.

Adam Chapnick:

This is exciting. And how bought for the token? What's the mechanics of that?

Scott Nelson:

So we need everybody to go through KYC/AML. That's going to take us a couple of months to get everybody in.

Adam Chapnick:

That is know your customer and anti money laundering.

Scott Nelson:

That's correct.

Adam Chapnick:

Okay.

Scott Nelson:

Because we're going to be responsible people.

Adam Chapnick:

Yes, that's good.

Scott Nelson:

So we need to go through that. Get everybody in as members first. Get them verified and signed up so that there isn't this kind of panic rush thing for that all at the end. And then we will start dripping out the sale of our coins. It's a very unusual process, because we're actually holding ourselves accountable to financial results and performance before we actually can release coin.

Adam Chapnick:

Yeah, that's great. They call it a slow drip. Right?

Scott Nelson:

Yeah.

Adam Chapnick:

I think that says a lot about who's making the offering if you're willing to kind of block off some of that coin to hold yourself accountable. I think that says a lot about things.

Scott Nelson:

Yep.

Adam Chapnick:

Amazing. So in the video they talk about how token holders can access their own assets. Right? Via your liquid Bridgecoin. Is that right?

Scott Nelson:

Yes.

Adam Chapnick:

And they keep their assets ...

Scott Nelson:

Yes.

Adam Chapnick:

But they can access the liquidity behind them, and essentially lend to themselves. Is that right?

Scott Nelson:

Yes, that's right.

Adam Chapnick:

So how in the wold does that work?

Scott Nelson:

Well the blockchain allows you to lock assets, either because they are native to blockchain like Bitcoin or because they are wrapped in something called a Ricardian Contract, which has the ownership's state on the blockchain. That means that if you lock your assets, and that locking prevents you from being able to sell it, you can then borrow from the asset yourself. And how that works is the smart contract actually mints Bridgecoin based on the collateral value of your asset when you contributed it. You can then withdrawal that as much as you want up to the collateral value, and spend it on whatever you want without having sold your asset and you did this yourself. So this has implications that aren't obvious.

Adam Chapnick:

Okay. So what are the non-obvious implications.

Scott Nelson:

Well since you're loaning yourself the money you get to dictate the terms.

Adam Chapnick:

How about no percent I'm sure is the first one. Right?

Scott Nelson:

Well yeah, you can pick your interest rate.

Adam Chapnick:

Yes.

Scott Nelson:

And you can lower your interest rate in our system using something called Sweetcoin to zero if you want.

Adam Chapnick:

Yes.

Scott Nelson:

I'll explain more about that in a minute. But you can set terms that you wouldn't normally be able to set like the length of your loan, whether you want to have it interest only, whether you want it to be amortizing, whether you want to renegotiate your loan with yourself. You can do this anytime. Whether you just want a free month without actually having to make a payment. It's all up to you. The only rule is that your liabilities can not exceed the collateral value of your assets. That's it.

Adam Chapnick:

Got it.

Scott Nelson:

And as long as you don't violate that rule then you can do whatever you want.

Adam Chapnick:

So where does the actually money that I would get in the liquidation process come from? I shouldn't say money, where's the fiat let's say.

Scott Nelson:

Yeah. Let's step back first and start with the Bridgecoin.

Adam Chapnick:

Great.

Scott Nelson:

So it starts with that being created from an asset. So this is creating an asset backed currency, much like gold used to be in the days of old backing for the U.S. dollar.

Adam Chapnick:

Yeah. Right.

Scott Nelson:

This now becomes ... your assets become the backing for the Bridgecoin. Then the real question is well what can I do with Bridgecoin?

Adam Chapnick:

Right.

Scott Nelson:

If I just own it and I can't do anything with it, it's not valuable. Right. So we've created an economic system that has two major levers. One is a set of incentives for people for want to leave money in bridge coin. Think of it like interest is an incentive for you to contribute your savings to a credit union.

Adam Chapnick:

Yes.

Scott Nelson:

And that then loan people money out. It works the same way except it's not interest it's discounts. You get discounts when you're in the Sweetbridge economy on what will be an ever growing set of services, and goods, and other kinds of things. The other, which is really the major driver, is large corporations who have cash on their balance sheets but can't use that cash for anything except leaving it on their balance sheet without effecting the value of the corporation.

Adam Chapnick:

Interesting.

Scott Nelson:

And so what we allow is for the corporation to convert some of that cash to Bridgecoin, which is a cash or cash equivalent from an accounting point of view. So it still shows up on their books as a liquid asset as cash. Okay?

Adam Chapnick:

Yeah.

Scott Nelson:

That allows them then to get better payment terms from all of their suppliers in their supply change ...

Adam Chapnick:

In that ecosystem

Scott Nelson:

In that ecosystem. So if this is say somebody like GSK, the world's largest pharmaceutical medical device company, they spend 20 billion dollars on their supply chain. They can now allow their suppliers to get paid through our system in the same way that you borrow money from Bitcoin or something else. They can borrow money interest free from their invoices, from their orders.

Adam Chapnick:

[inaudible 00:18:43]

Scott Nelson:

Without taking a discount, yes. What the big corporation gets out of this is these suppliers of theirs have an average waiting cost of capital of about 6 percent. So that goes away. So they're going to save 6 percent. All GSK asks, for example, is let's say I want a two percent savings in exchange for doing this. They make 2 percent more profit, actually increase the amount of cash they have on their balance sheet from a reporting point of view, which changes the asset value of their stock. It changes the value of their stock probably by a significant amount, probably a 10 to 20 percent increase in value. This is billions, of billions of dollars.

Adam Chapnick:

Yeah, right.

Scott Nelson:

So this is why you do it.