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      3. Getting Started
      • 17 Nov 2023
      • 3 Minutes to read
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      Contents

      3. Getting Started

      • Updated on 17 Nov 2023
      • 3 Minutes to read
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      Article summary

      System phases

      Design phase

      Beginning the design phase

      StepDesignOutcome
      Define common propertyBrainstorm possible common properties e.g. income, yield, weight. Does your industry have a common property standard? What is the liquid off chain market for the fungible property? Check whether you are double counting tokens. Check the relationship between the common property and the unique asset, are they being double counted? Plan token listing strategy on DEX (AMM) and CEX (Order book) or Gild Labs DCEX (Decentralised OrderBook). Define units of common property per 1 TKN. Define TKNs per $1 value. Name
      Define unique assetsSpecify end-user token holders have any rights or claim over the underlying assets, or physical delivery (if any)
      Define audit process
      ArbitrageDesign and establish arbitrage system (custodian can profit simply by arbitraging price divergences)

      Example, Future Grow Cannabis

      Let’s take this example, FutureGrow, cannabis producer. What is fungible, for example for cannabis is THC level fungible? Is the final product weight fungible?
      Naively we would expect it to be THC as that's the most low level chemical, like pure alcohol content, it's the thing that ends up being equal. Put it in the context of gold, it's the purity at a certain weight -- as prescribed by the LBMA (industry standard). So cannabis would be THC level at a certain weight -- but no industry standard so we'll have to establish that standard?
      When they mint a new plant they have a forecast on what they plan to extract from it, and i'm sure that at the end of the process they very carefully measure everything during extraction. Is it "pure THC" that is the fungible bit? because if so, that's what the ERC20 represents.

      Develop & test phase

      Work with our initial design

      Figma
      Github
      Web

      Create your screens especially focussing on

      1155 design
      20 name and details
      Look and feel

      Can use our template or new template you create

      StepDetailsOutcome
      Review Gild Lab screensWhat questions do you have? Are you clear what first, where? Are you clear how you will design your system?
      Being to build your screensUse our SDK
      Connect your infrastructureYour screens + subgraph + IPFS (we set up for you)
      Deploy testDeploy on testnet and begin to test with your ecosystem

      Some example screens

      t49.png

      revisions.png

      Legals & Regulatory

      Getting legal and regulatory right is crucial to the system’s success

      StepDesignOutcome
      LegalHow are the ERC20s treated?How are the ERC1155s treated? If ERC20s are a security, how are these regulated? Who can purchase, what are the conditions and how is KYC done?
      RegulatoryWhich jurisdiction?
      AuditsWhat audits happening? On what levels?

      Example, LOVE TO Be Bright Green

      We concluded that there are two levels of audit happening: (1) the audit that results in a PIE certificate; and (2) the audit that lines up the shares sitting on top of the PIE certificate with the blockchain (de-identified PIE certificates end up on chain?).
      They worried out loud a lot that the crypto they issue would end up in the hands of investors in countries that they haven’t done the regulatory work for.
      They are working with McMahon Clarke for their regulatory work (ASIC forms etc). Their lawyer, Langton Clarke, who they have a long relationship with, doesn’t know anything about crypto.
      We aren’t sure how to manage AFSL licensing obligations for our SFT system (called Moneybox). It contains off chain assets which are issued by a Mutual (public) company. These have price discovery and some liquidity though listed markets or private (pre-IPO) markets. The securities are issued to Producers who then sell or keep the assets – so the market is really dealing in secondary sales, even at IPO stage. The MCIs have a face value of $100 and are issued to Producers based on the value of their regenerative work. Producers may be Producer Members of the (Australian) Mutual from anywhere in the world. Likewise, Investors may operate in any jurisdiction. The Mutual needs to comply with Australian law at issuance and for direct sales where we are marketing only our own securities. We aren’t sure if wrapping these in a Moneybox constitutes a new security, and therefore what regulatory regime is required to do this in any nation using a platform that may not have Australian jurisdiction.

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