Utility or Security? How about both?!
Thoughts on MintHealth’s dual token structure with the helpful edits from James Dix.
The interest in utility tokens is so 2018…
As the 2018 cryptoasset market is off with a $1.8 Billion strong start and interest in understanding tokens are on the rise (see graph below), we have been writing about utility and security tokens here and here.
The impetus to discuss these is of course due to the legal concern offering security tokens (which derive value from an external, tradable asset subject to federal securities regulations), in the guise of a utility token (which represents future access to a company’s product or service and is no more than a ‘digital coupon’).
This hightened sense of legal vigilance is probably good and may even counter-act a regulatory over-kill that can skew markets and depress innovation. Until legal clarity arrives (and it will arrive soon), I would recommend applying my dear friend James Haft’s dictum:
“Every token is a security token, until proven otherwise…”
But why not both?
This is interesting
We don’t agree with every statement in MintHealth’s piece. We and others do not see “the sun-setting of the ICO as we came to know them” nor that “inevitable dominance of Crypto-Securities” is related to the technology hype cycle (we actually think that it is probably primarily a function of the large size of the private asset market, which is perhaps 10x the size of the public securities market).
However, the dual token design by MintHealth is a novel design and it is interesting, mostly because it clarifies the stakeholder relationship with MintHealth and it’s services:
- If you are an investor in healthcare and are interested in MintHealth’s platform- purchase MintHealth Tokens (MHST).
- On the other hand if you are a patient, a healthcare professional, an employer, a payer and you would like to be rewarded for healthy behavior or good practice (like encouraging to go or go to the gym, eat organic food, stop drinking and smoking, paying bills on time)- purchase VIDA Mint Tokens (VIDA).
- Researchers, policy makers, philanthropists might even- buy both!
Maybe healthcare is a unique vertical for dual token structure and not applicable in other user cases. Maybe the technical design or legal ramifications will turn out to be too complex. Nonetheless, this novel structure brings us back to the basics of token economy, of dis-intermediating valueless actors and empowering self-sovereignty.
Who knows?
It will be interesting to follow MintHealth’s project and hopefully this novel token structure might encourage all of us to transition from being passive health consumers into active health producers.
Until we know — thank you MintHealth for trying!
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Dr. Alex Cahana is an advisor to MintHealth
