PERMANENT SUMMER: THE NEW MATR TOKEN…And Why The RWA Bull Market Goes On Forever*
*offer void where prohibited by law ;)
In an epic ten-year spree, Ethereum has shown its potential to change the world for the better, but to achieve its full potential it has to extend its reach and firmly grasp real world assets (RWA)
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Mattereum GmbH has launched the MATR token through Swarm, a German exchange regulated at the same level as a bank. This token gives significant discounts to users of the Mattereum system when onboarding assets. Nine years ago I was part of the Ethereum team that wrote the rulebook for the future of finance and many other things, now Mattereum is delivering on this by enabling Real World Assets (RWA) to be put on chain safely and effectively. The landscape has been changed by TradFi deciding the future is tokenized assets. Mattereum’s system is the only one that can make this work. It provides an enforceable legal connection between the token representing an asset and the tokenized asset itself.
This has the power to completely transform finance for the future and make Mattereum bigger than Visa.
This is a once in a century transformation, like when music went digital
Please note that the Mattereum Discount Token (MATR) is available for purchase through Mattereum GmbH’s fully regulated German crypto exchange partner, Swarm. Buying MATR is subject to terms and conditions in eligible jurisdictions — in particular, residents of the United Kingdom and the United States of America are excluded from the public sale of MATR. Sorry about that, folks.
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At the end of January, Mattereum GmbH launched its token MATR* on Swarm, a German exchange regulated to the same level as a bank. As I write, prior to our big marketing push, it has already sold something in the region of $650k of tokens. This is the culmination of a long path that began, for Mattereum, back in 2017, but for me, much earlier.
Nine years ago (almost to the day!) I started as launch coordinator for Ethereum, and I set out the big vision for it in Ethereum’s launch document Programmable Blockchains In Context. It was nothing less than a new vision for the blockchain, a vision based around smart contracts. Bitcoin’s launch in 2009 is conventionally seen as the inflection point, the moment when everything changed, the moment when the blockchain became the future. I am not so sure, we’d definitely never seen anything like that before, but Bitcoin was weird money, and decided to stay as weird money, even though the prospect of the blockchain being able to do everything could be seen by the far-sighted from the start — Satoshi got it, it’s there in the original Bitcoin whitepaper — “Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers”.
So, Ethereum happened. The key thing that you could do with Ethereum that you could not do with Bitcoin was smart contracts; you could use the blockchain as a computer to execute digital contracts that would allow it to do almost anything. This loosed the true potential of the blockchain on the world — the ability to create new kinds of property, beyond money itself. It is perhaps this that was the true inflection point. In a piece I wrote when ETH hit $100 I described its origins as “a bunch of funny-looking villains pull together this remarkable piece of technology which, at the time, we thought was going to change the world”, and well, it kind of did, but maybe not how we envisaged it.
As I write this ETH has just hit $3500, the NFT craze, which needed Ethereum to function, has come and gone making a whole lot of people a bunch of money, then, just as quickly, losing it for them again. There have been scandals, frauds and rug pulls, and the entire reputation of the blockchain, particularly Ethereum, stank like a month-old kipper for a while. But those of us with the long view know about the Perez Cycle. This describes how world-changing innovations undergo a steep innovation curve, create unsustainable bubbles, which burst, ruin a lot of people, become radioactively untouchable for a while, then have the sound, workable elements picked up by mature actors and built into solid, useful and profitable long term businesses. We saw it in the dotcom boom, we saw it in 1929 with the stock market, and even with the railway boom way back in the mid-19th century. Out of these came web 2.0, the modern financial system, and most countries’ transport infrastructure. And so it is with Ethereum. What we have seen so far may not have embodied the vision we had for Ethereum, but that vision was not lost.
I have kept that vision in sight and sat tight. Mostly, the Mattereum team are old, at least compared to other blockchain people, and have seen the Perez Cycle before; one of our team ran a top level domain in the early 2000s and I lived through the dotcom crunch. While bull markets turn to bear markets and back, and crypto winters come and go, we have had our eyes on long-term mature use cases. We have spent the time doing the hard, complicated, slow work that builds the machinery to make Ethereum everything it was supposed to be so that it has a long-term future.
If you wonder why the blockchain has not got greater traction, why it has just been the locus of fads, fancies and scams, it is because it hasn’t had a mechanism to connect it to the real world. It’s been like an engine revving in isolation, it needs the gearbox to connect it to the wheels so that it has grip on the road and the traction to actually get somewhere. Mattereum has been building that gearbox, the thing that gives the Ethereum blockchain a way of grasping the physical world by firmly and legally connecting it to RWA. That way it can achieve what it was always meant to do. The reason I left the Ethereum Foundation was that I saw that this is what was needing to be done and it was becoming increasingly clear that they were not going to do it, so I needed to. Now I have, through Mattereum.
But what is it exactly that I have done? What was it that took six years and millions of dollars of investment? Mattereum has built the digital and legal infrastructure that enables the sale and lease of physical property and other assets through smart contracts using Ethereum. To do this we have created the Mattereum Asset Passport (MAP), which is a detailed product description of physical assets backed by legal warranties bundled together using smart contracts on the blockchain. With our partners at Swarm, we can now tokenize any asset a lawyer can recognise and fractionalize it too, and any asset or fraction of an asset comes with the Mattereum protections. This means that when you buy a real world asset token that has a MAP on Ethereum, you have unambiguous legal ownership of the linked physical asset. If you buy a token representing a gold bar, it enables you to turn up at the vault where the gold bar is stored and say “that specific gold bar there is mine” and have your claim accepted.
This is major — it is a potentially world-changing innovation.
Moreover, a MAP provides guarantees that the real world asset it describes is as claimed. If you buy a piece of real estate with a MAP that has been guaranteed to be in a certain condition and you turn up to find the roof leaks and the drains are blocked, you have the right to make a claim and be compensated. It is not just Mattereum that makes these promises, it is independent guarantors, and legal claims against them can be made in 172 jurisdictions worldwide — Mattereum’s legal infrastructure is built on UK common law provisions for digital commerce and is enforceable in 172 jurisdictions under international law. We help create a doubt-free environment for trade. We’ve started with gold, real estate, luxury goods, art, antiques, and other items where authenticity is particularly important, but ultimately our system could be used for everything. There are huge implications for this that I’ve explored in more depth elsewhere.
It’s easy to claim to put physical, real world stuff on chain, but it’s hard to prove that the stuff is real to a buyer on the other side of the world, and it’s even harder if that buyer is an AI (the Mattereum system also has important implications for enabling AI to connect to the physical world). Without the ability to prove that stuff is real, there’s no way to keep scammers out, and RWA scams will make the old NFT scams look trivial. Allow the scams to thrive and the long term viability of Ethereum as a global platform for trade will be doomed. Mattereum’s system squashes scammers like bugs.
If you buy things like stock in major companies, say Facebook or Tesla, due diligence is built in, but for most other things, like real estate, you have to do that work for yourself before you buy, and it’s expensive. Diligence is the hard problem in almost all financial transactions.
Mattereum solves this; it is essentially a diligence facilitation company for Ethereum. Any transaction done on Ethereum for an asset with a MAP has the diligence done automatically.
We can do this for Mattereum customers, but we can also do it for other companies in the RWA space. Making it work took time and money (a lot of both); other companies putting RWAs on the blockchain don’t have to repeat that work, we can provide our system to them as a service, giving them a shortcut to secure and reliable tokenization and fractionalization.
Mattereum has built upon successive waves of innovation on the blockchain that have peaked and then crashed, building as more and more people get involved. At each step there are ten times the number of people involved than were in the previous wave, and each time that happens the story changes radically. Eventually the innovation reaches escape velocity and goes stratospheric, and, I believe, this is where we are now.
Our system has the potential to be the rails on which the future of commerce runs. Serious TradFi people are getting it; Larry Fink from BlackRock Capital has come out in favour of a tokenized future, saying that their great new horizon is tokenization of every real world financial asset, and Mark Yusko, founder of Morgan Creek Capital Management, has followed him, saying “everything of value in the world will eventually be a token”. The City of London, too, gets it, the world’s leading financial centre. The Lord Mayor, who heads the City, has set up his Smart Economy Networks project, which has tokenized assets as a major plank and actually names Mattereum as a key company in the network. Before all this, Sir Geoffrey Vos, the Master of the Rolls, head of the UK’s civil justice system, involved Mattereum in the development of the UK’s Digital Dispute Resolution Rules (DDRR) as he is a firm believer in the blockchain as the future of commerce, and sees the opportunities offered by Mattereum’s innovations. Mattereum has gone on to be the first company to use the DDRR in their work.
Over the past ten years we’ve gone from a single lone hero talking about building smart contracts into Bitcoin (Vitalik’s MasterCoin) to the leaders of TradFi insisting that blockchains, tokenization and similar are the future of finance.
We nailed this. Too early to know if we won or not, but back in 2015, the Ethereum team wrote the rulebook for the future of finance and many other things. Now Mattereum is delivering on it.
In the end it’s about the money.
How much money?
All of it: how much information is left offline these days in unscanned paper books and undigitized music? A few percent. What we are doing is like that, but with money and assets. We have the potential to be bigger than Visa; I had long conversations about Mattereum with Dee Hock, Visa’s founder, and he did not think this was ridiculous.
Ethereum is now hitting Early Adopters where institutions with real use cases stop trying to fit the technology into their existing technology stack, and start moving their assets on to Ethereum’s technology stack, Mattereum is here to guarantee that this works. This is the beginning of “TradFi” and “DeFi” merging into, well, just “Fi”.
This is a once in a century transformation, like when music went digital. That doesn’t happen twice.
We held back on issuing a token until now, until we were sure we were being lifted by an unstoppable rising tide, and the legal, licensing and regulatory environment were ready. We could have leapt onboard with one during the ICO goldrush with everyone else, but our strategic mindset said “wait”, and we were not wrong. With the mature use case for the blockchain that we were planning for now being understood by the serious players, now is the time, so the decision was taken to launch MATR, a token offering discounts on Mattereum’s products and services.
Mattereum’s purpose is to provide a legal structure for RWA operations on the blockchain so that when users buy a tokenized asset such as real estate or gold, the purchaser of the token unambiguously owns the connected physical asset, or a fraction of the physical asset if it has been fractionalized as well. As a result, it was particularly important for any token associated with the Mattereum Group to be constructed in a legally sound way that provides the protections for purchasers that many other tokens fail to do. Without such protections other token buyers are vulnerable to rug-pulls and other sharp (and illegal) practices. To do this, Mattereum’s chosen path was to incorporate a subsidiary in Germany (Mattereum GmbH) which could mint and sell the MATR token through Swarm, a fully regulated and licensed German exchange operating under the same regulations and to the same standards as TradFi banking institutions in Germany and so providing customers with equivalent protections.
This was not, perhaps, the simplest route, but it was the one that gave MATR the absolutely best protection. We believe we are the first group to issue a token through an exchange regulated under the same rules as banks, but we hope this paves the way for more people to do things the same way. It involved more lawyers and negotiation than other routes, but it works, and now we’ve done it we can help others do it too, adding assistance with token issue processes to Mattereum’s portfolio.
The Mattereum Discount Token White Paper gives the exact formal details of how the MATR token works, but essentially it offers a discount on Mattereum fees for transactions with real world assets on chain, such as Onboarding Fees and Certifier Fees. Each token used reduces the fee by 1% and given that, in turn, onboarding fees are 1% of the assets’ selling price, for the kind of assets we’ll be onboarding, the discount received for using a token could be substantial. Let’s just have a look at how that would play out in a real transaction:
If a client wishes to onboard a $1m asset, the onboarding fee would be $10,000. If they use MATR tokens to reduce this fee, each token reduces the onboarding fee by 1% (subject to a maximum discount of USD $10,000), and a user can burn up to 50 tokens per asset. So for that $1m asset this means that burning the maximum of 50 tokens would result in a 50% reduction in the onboarding fee, or $5000. For that transaction each token would represent a cost saving of $100, and they are currently on sale* at $0.65 per token (going up in increments to $2.00 until the sale ends on 4 July — details are in the white paper).
We think this will be popular.
VINAY GUPTA Mattereum Founder and CEO
Find out more about Mattereum GmbH’s token sale*.
*The Mattereum Discount Token (MATR) is available for purchase through Mattereum GmbH’s fully regulated German crypto exchange partner, Swarm. Buying MATR is subject to terms and conditions in eligible jurisdictions — in particular, residents of the United Kingdom and the United States of America are excluded from the public sale of MATR.
