If you hadn't heard of Blockstack before 2019, you probably know them now by their historical SEC clearance to hold the first ever regulated token offering.
We were lucky enough to get some of our top questions about Blockstack's SEC qualification and what it means for the blockchain industry answered by their Investor Relations Partner, Brittany Laughlin.
Let's get started!
- Congratulations on your SEC qualification under Regulation A+! Can you tell us how long this was in the making?
Thank you! In our 2017 token offering, we knew we wanted to find a path to allow anyone in our U.S. community to be able to participate. We considered a few paths and decided that Reg A+ could be the right legal framework to make that vision into a reality. The process took over 9 months of work and help from legal and accounting experts. It’s an historic event to have the first SEC-qualified token offering.
You can learn more about the sale at stackstoken.com and read the full SEC offering circular at http://stackstoken.com/circular.
- What does Blockstack’s SEC qualification mean for the cryptocurrency and blockchain industry as a whole? Is there anything you foresee happening as a direct result of this precedent?
We hope this qualification will lead to greater access for the public to participate in network growth, so that they might share the benefits as an ecosystem stakeholder. Prior to this qualification, we had to limit investment opportunities to accredited investors.
Our offering circular contains detailed disclosures about our business, risk factors, and plans. We hope our path can set a precedent for other projects in the industry.
- In relation to traditional ICO token sales of 2017 and prior, what limitations/restrictions does Regulation A+ present?
Veterans in the crypto industry may be used to the ICOs of 2017 which were characterized by limited disclosures, 24-hour sale windows, and no caps on investment amounts. Our offering is different. For example, we require KYC/AML compliance checks. Our sale is open at stackstoken.com for 60 days by default. And, we are optimizing for a broad distribution of tokens instead of large investors taking all of the round, so we’ve restricted purchases over $200K without first contacting our investor relations team. For full details, check out our blog post about the differences: https://blog.blockstack.org/blockstack-token-offering-update-and-common-questions/
- Do you have an open dialogue with the SEC? What has the process been like behind the scenes with regulators?
We worked closely with the SEC. We’re grateful for their interest and collaboration, and it was a once-in-a-lifetime opportunity to help shape the industry.
- What happens after Blockstack’s 60-day token sale, from a regulatory standpoint?
Purchasers will receive tokens in their wallet at the time of the hard fork which will distribute tokens to each purchaser. The hard fork will take place approximately 30 days after the close of the sale, which is open for 60 days by default. If we reach the funding cap for either the general offering or the voucher offering before the end of the sale term, then we may close earlier.
Here is more about the unlocking time frame:
2019 Regulation A offering: Stacks tokens sold pursuant to our Regulation A offering are subject to an approximately two-year time lock from the date of the hard fork that distributes the tokens. 1/24th of the amount of tokens purchased will be released from this time lock on the date of distribution of the tokens, and an additional 1/24th will be released approximately every month. These tokens will not be subject to a transfer lock.
- What (if anything) can you tell us about Harvard Management Company’s stake in Blockstack? Are there other notable investors of Blockstack?
No comment on Harvard. We are lucky to have the support of USV, YC, Naval Ravikant, The Winklevoss Twins, Michael Arrington, and Kevin Rose to name a few.
- What benefits does the current token sale have versus the private sale in 2017, especially considering tokens were sold at a high discount to early stage investors?
One of the reasons we pursued a token offering under Regulation A was to give our early supporters the opportunity to participate in the Stacks token offering at the same price as accredited investors who participated in our 2017 token sale under Reg D. At the time, people who were not accredited investors had the opportunity to receive a non-binding voucher to redeem later at the same purchase price.
- With 165 applications built on Blockstack, how many daily active users do you have and what are your top dApps? What’s the biggest thing you’ve learned in building out this ecosystem?
Fundamental digital rights are a core part of our ecosystem. By default, we don’t track our users. As of the date of our offering circular, the network had approximately 115,780 registered user accounts. We’ve recently been focused primarily on building a great ecosystem for developers and building the app ecosystem in a sustainable way.
- Do you have a goal in mind for number of dApps on Blockstack by the end of 2019?
We can’t speculate on an exact number of apps, but we’ve been growing apps quarter over quarter. We developed a novel incentives mechanism, App Mining, which rewards developers creating value in the ecosystem. We plan to pay out $1M across the best apps in the ecosystem by May 2020.
- There are many competing “dApp-focused” projects. How is Blockstack different and why can it compete with others (i.e. ETH) who have such a head start?
We’ve been working on building a scalable network since 2013, based on first principles computer science and implemented by distributed systems PhDs. We have a live blockchain on main net, an easy on-boarding process for users with over 171 user-ready apps, and most importantly an adaptable, plug and play developer toolkit. We provide value for developers with auth, decentralized storage (gaia) and access to users from apps built in the language of their choice.
One of the things we’re working on now is our Clarity smart contracting language, which is better than Turing complete and for safety reasons, does not use compilers. The benefit is that developers are able to rigorously test their code prior to launching, and know that what they deploy is what will run. Overall we hope that our focus on engineering excellence and smart drives serious developers to the space.
Learn more about the stacks token offering or participate in the sale at stackstoken.com
Visit our website at Blockstack.org
Follow updates on our blog: https://blog.blockstack.org/
Join our Telegram group: https://t.me/BlockstackChat
Follow us on Github: https://github.com/blockstack
The Securities and Exchange Commission (SEC) has qualified the offering statement that we have filed with the SEC. The information in that offering statement is more complete than the information we are providing now, and could differ in important ways. You must read the documents filed with the SEC before investing. The offering is being made only by means of its offering statement. This document shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
An indication of interest involves no obligation or commitment of any kind. Any person interested in investing in any offering of Stacks Tokens should review our disclosures and the publicly filed offering statement and the final offering circular that is part of that offering statement here. Blockstack is not registered, licensed or supervised as a broker dealer or investment adviser by the SEC, the Financial Industry Regulatory Authority (FINRA) or any other financial regulatory authority or licensed to provide any financial advice or services.
This communication contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology. Forward-looking statements in this document include, but are not limited to, statements about our plans for developing the platform and future utility for the Stacks Token, our Reg A+ offering and launch of our network, and collaborations and partnerships. These statements involve risks, uncertainties, assumptions and other factors that may cause actual results or performance to be materially different. More information on the factors, risks and uncertainties that could cause or contribute to such differences is included in our filings with the SEC, including in the “Risk Factors” and “Management’s Discussion & Analysis” sections of our offering statement on Form 1-A. We cannot assure you that the forward-looking statements will prove to be accurate. These forward-looking statements speak only as of the date hereof. We disclaim any obligation to update these forward-looking statements.