Liquidation Strategy for my Founder’s Reward
Nearly 18 months ago I co-founded Lisk together with my dear friend and partner Oliver Beddows. It has been an incredible journey thus far and we have a long and brilliant road ahead. For us, the Lisk project hasn’t come close to showing its full potential yet, and now with 15 people working full-time on our product, it is more evident than ever that the future is bright for the platform and ecosystem.
One of our core pillars has been the promise of complete transparency to the Lisk community. For that reason, I would like to share exactly what I, as Co-Founder and President, intend to do with my own personal holdings of LSK.
In January 2017, 12 months into the project, after speaking with other large holders of LSK, I formed a careful strategy for the sale of a portion of my founder’s reward. For everyone who doesn’t know, the founder’s reward is my stake in the network for helping to kickstart it. Similar to shares in a typical startup, I received a number of tokens in the network.
Originally, I received 4,000,000 LSK from the initial distribution. However, at the beginning I decided to share 200,000 LSK with first-day donators. Additionally, I donated 100,000 LSK to the Community Assets which shall become a DAO-like Lisk community platform for ideas. That means my current holdings are 3,700,000 LSK, not including random donations to my account.
After a lot of thinking and conversations with other major LSK holders, I have now decided to split my current holdings of 3,700,000 LSK into two categories; 1,700,000 LSK in category A for further investments into the Lisk ecosystem and 2,000,000 LSK in category B for liquidation over time into other cryptocurrencies or fiat.
Category A: 1,700,000 LSK for Blockchain Apps
The Lisk ecosystem will see a large number of Token Sales happening in 2018 for the many Blockchain Applications which will be developed. I want to reserve 1,700,000 LSK for further investments into the Lisk ecosystem to strengthen it and give early developers a kick-start.
I can’t give an exact break-down on how I’m going to invest into the different projects built on Lisk; however, I will be careful to do my best to invest in the right projects at the right time, as I am fully committed to the success of the platform.
It should be noted that I will only make investments into Blockchain Application projects which utilize the Lisk SDK and which accept LSK in their Token Sale.
At current prices this amount would equate to a $4,000,000+ investment fund, which I believe shall accelerate Blockchain Application development on Lisk dramatically.
Category B: 2,000,000 LSK with a 10 year liquidation plan
As working on Lisk is my job and my life right now, the vast majority of my personal assets are represented in LSK. To be responsible to my family and our future, I plan to appropriately diversify a fraction of my LSK into other assets, such as potentially real estate. With this in mind, I am outlining a plan which puts strict limits on how and when I may sell any LSK holdings, ensuring that it remains self-evident that as Co-Founder and President my interests are fully aligned with the Lisk project.
I am publically reporting that the first significant sale of my LSK occurred during the 24th calendar week of this year when I used Bitcoin Suisse AG to responsibly sell 300,000 LSK slowly and at market rates. The LSK which have already been sold will be transferred after this post is published. Today, there are 1,700,000 LSK remaining in category B.
My current plan is to carefully sell, over ten years, most of my remaining LSK tokens, which will further decentralize the network. This will be done in strict accordance with a plan intended to prevent upset of the market. From now on, I dedicate myself to a fixed liquidation schedule of 6 month intervals.
Below you can see a table which shows exactly when I can sell how many LSK:
The “Liquidation” column shows how many LSK I can liquidate in each cycle, however I have no obligation to actually sell. I can also hold the tokens and wait a bit longer before liquidation, that means in the next cycle I could sell more in one or multiple steps. The important numbers are in the “LSK left” column. They represent the total outstanding LSK I should at least own at the end of every cycle. As indicated in the chart, at the end of ten years, I will hold at least 283,512 LSK as a long term investment and as my personal stake in the network.
The first chunk was sold fully regulated through Bitcoin Suisse AG and I plan to continue doing so. However, 10 years is a very long timeframe in the Blockchain industry, therefore it’s yet to see how the space is evolving.
Finally, I want to reiterate my commitment to the Lisk project and what we are creating and achieving. I look forward to the bright road ahead, one which drives the development of blockchain applications and the entire industry.
10th January 2018: 110,000 LSK (A: 100,000 LSK / B: 10,000 LSK)
16th November 2018: 65,000 LSK (A)