- tokenize.it or platform: A platform that enables company shares to be created and traded on an evm-compatible chain
- company or founder: A company that wants to emit shares, and in most cases receive capital in return
- investor: An entity that wants to receive shares of a company and is willing to pay for doing so
- (employee: A person that works for the company and may receive shares as part of their compensation. Emitting these shares can be done directly or through 3rd party contracts, but is not the current focus of this project.)
Let's assume that there will be one (1) platform, many (X) companies and many (Y) investors. This leads to the following number of deployments for each contract:
| contract | number of deployments | admin | reason |
|---|---|---|---|
| all factories | 1 | --- | the factories help to deploy to deterministic addresses and save gas through cloning or proxies |
| AllowList | 1 | platform | used by all companies |
| FeeSettings | 1 | platform | used by all companies |
| Token | X | company | represents a specific companies shares |
| Vesting | X | company | allows company to vest tokens over a period of time |
| Crowdinvesting | X | company | most companies will want crowdinvesting funds from all eligible investors |
| PrivateOffer | >X | --- | most companies will extend special investment offers to specific investors, or receive these from investors |
Tokenize.it deploys AllowList, FeeSettings and PrivateOfferFactory contracts once. See deployment for more information. Also, a web app will be provided. This app will not be described in depth here.
Using the platform, the company, in this example the company's founder, signs up using a wallet. After finishing necessary settings and verifications off-chain, the platform deploys a Token contract on the founder's behalf. The founder's address is set as admin in the constructor. This means that the founder is immediately in control of the contract, even though it was deployed by the platform.
Which addresses are able to receive or send the tokens can be limited through the requirements, which are checked against AllowList.
When tokens are minted, fees are charged.
When investments are processed, fees are charged.
The founder can offer tokens at a certain price to the public. If they want to do so, the platform deploys a Crowdinvesting contract and transfers ownership to the founder.
Afterwards, the founder grants a token minting allowance to the Crowdinvesting contract, enabling it to mint shares.
In order to buy tokens, investors must grant an allowance in payment currency and execute the deal() function. This will transfer the payment to the receiver selected by the founder and mint tokens to the investor. Alternatively, the investor can send the payment directly to the contract using the TransferAndCall standard.
The fundraising can be stopped or paused by the founder. When it is paused, conditions like price or minimum amount can be updated.
All transactions can be performed without founders or investors having to pay ethereum transaction fees (see Transaction fees).
Founders and investors can agree on specific terms for an investment, e.g. a special price or a special currency to pay with (see supported currencies). This investment is executed during deployment of the PrivateOffer contract.
Founder and investor have to agree on the deal in 3 ways before the contract can be deployed:
- terms of investment -> needed to calculate the contract's address (will be deployed using CREATE2)
- founder grants token minting allowance to contract's address
- investor grants payment allowance to contract's address
Once these steps have been completed, the platform executes the deal by deploying the contract. Again, all ethereum transaction fees are paid by the platform.
While tokenize.it does not provide legal council, it will provide templates for legal documents that are needed for the process of creating company tokens and raising funds. These templates will be provided in the web app.
The platform will pay all ethereum transaction fees for deployments and other transactions performed through it's web app. This is made possible through the use of meta transactions (EIP-2771) and trustless deployment procedures. Note that, independent of ethereum transaction fees, the platform charges fees for token minting and investments!
Companies will profit from a pool of verified investors provided by the platform, and investors will profit from companies being available for investment.
Tokens (=shares) being transferable between investors makes shares a liquid asset.