There are four main modes of operation when using the SharesChain platform: providing companies and individuals a legal understanding of what is needed in their jurisdiction, access to legal service specialists, smart contracts that obey the law, and investors or collaborators who participate in the exchange of said assets using the SharesChain Token.
Providing a legal framework for companies that wish to operate in the blockchain sector are important because they need to know exactly what their legal requirements are in the first place. This allows them to move onto the second step (seeking legal service providers) because they have better access to the information that is directly related to conforming to their local regulations thus allowing them to know exactly what they need. Companies spend exorbitant amounts of time and resources seeking this legal understanding, but due to the lack of regulation in the industry, the company often still finds itself unsure whether or not it is in full compliance.
Access to Service Providers
Legal Service providers help companies acquire a legal foundation by understanding the rules of their local jurisdiction and applying them to the company as they incorporate. Since the blockchain industry is highly technical and often requires precise algorithms and engineering techniques, it is difficult for a company to know if its smart contract constructions and blockchain applications are in absolute compliance with these legal rules. In turn, some law firms find it difficult to determine whether or not the rules of a smart contract are legal because they are determining this through conversations with the engineers and their legal understanding of the whitepaper. This is why it is very important for a company to get its whitepaper validated in the eyes of the law, but worrisome if the service provider has little or no experience.
A Legally Grounded, Smart Contract Framework
Companies in the blockchain space that wish to turn their assets into tokens for trading on exchanges need to develop smart contracts so that investors trust that the value and trading of the coin can be taken at face value. Simpler yet, investors need to be aware that they will actually receive a return, which can be problematic if they cannot understand the algorithms of the smart contract. Smart contracts must be written in a particular way that complies fully with the laws of the area the company is operating in, and this can be difficult to determine unless the legal service provider is experienced in the blockchain industry. This can be even more difficult for the folks developing the company if they choose to form the company outside of their local authority.
While companies and investors are all considered participants in the SharesChain ecosystem, we are well aware that investors have deep concerns regarding the legal standing of the companies from where they wish to acquire their shares. Smart contracts form the basis of trust between individuals and entities but this is only realized in the case when the rules of the smart contract are clear and legal. This requires the investors, legal service providers, and companies to all be transparent and on the same page with regards to the specifics of what they’re offering.
Unification and the SharesChain Platform
To adequately understand how SharesChain can solve these problems, we must first look at how a blockchain company generally goes about forming its token mechanism. Since a company usually has a clear proposal, mission statement, investors (or at least an investment strategy) and some proof of work or concept, they are able to ascertain an evaluation much in the same way that a company would outside the blockchain space. Once the company accepts its evaluation, it can assign a value for a digital token that is a representative of its equity or share value given that the company will release a precise amount of tokens. At this point, we can consider the assets of the company (the equity or shares) to be tokenized in that their token and its mechanism have a precise rule structure and value.
The appropriate way to solve all the aforementioned issues is to provide a landscape where all of the players can participate in a transparent way. The unification mechanism for the SharesChain network can be encompassed with the SharesChain Token (SCTK). However, this is not an asset token, like the tokens described earlier. The SharesChain Token is a token similar to the original Bitcoin or the original Ethereum token. The SCTK, in its essence, is a gas token that fuels transactions much like using a currency at a shop fuels a shopkeeper to give a customer the product they desire. However, SharesChain, in its present form, will be using the SCTK token to allow companies to seek out service providers and pay for their services. Companies and service providers can also use SCTK coins to get access to legally viable smart contracts pending on their jurisdictions that are a priori accepted by the community (otherwise they would not be there). This allows SharesChain to assign a reputation value to all its participants. Service providers, companies, investors, and any other intermediaries will utilize the SCTK to make transactions on the SharesChain platform and so a legal and reputation-based checks and balances can be quantified and disseminated in a decentralized way.
This user-friendly platform brings together the necessities off-chain with the luxuries on-chain by providing a methodology for companies to get legal information for their jurisdiction and seek legal services thus allowing them to properly tokenize their assets. The community and individual participants (e.g. investors) will have access to specialized service providers to help them conduct more transparent analyses on the companies they’re interested in investing. The SharesChain Token bridges the gap allowing all the participants to take action on the chain or off the chain by allowing users a currency with which they can make these exchanges. The SharesChain Wallet on the platform will allow users to make these transactions directly and eventually they will even be able to use the currency token to directly invest. In the end, all blockchain spaces must operate legally and transparently to gain the trust and to capture the hearts and minds of developers, service providers, collaborators and investors — and SharesChain is exactly how we get there.