Scaling up Maecenas — Financial Product & Regulation (Part 3)

This is the third part of the “Scaling Maecenas” series. You can read Part 1 here and Part 2 here.

Financial Product & Regulation

As one of the main pillars of our company, our financial product is a key component within our delivery.

The innovative nature of our offering meant that we were required to spear-head the construction of a model that would allow us to bridge real assets into the crypto world.

Adding further complications, regulation does not always seem to keep pace with technology. The ever-changing regulatory framework present in the real world provides a tight and limiting environment under which we must operate in order to remain compliant.

Having faced many challenges, we are particularly happy with how we managed to lead a multi-disciplinary effort, requiring experts from various fields (e.g. Finance, Legal, Tech & Compliance to name a few) to successfully deliver our working beta product.

The facts

• We were the first company to successfully tokenise and auction fractionalised economic rights of a multi-million dollar piece of art.
• Albeit with some limitations (exclusion of US citizens and only accepting crypto as form of payment), our financial structure proved to be robust, whilst ensuring we remained 100% compliant.
• The complicated regulatory landscape meant that we faced many unanticipated challenges, however, we managed to deliver on our promises with only minor delays from the road-map indicated on our white paper.
• The scalability of our current structure can be improved; this is something we are actively working on. Despite this, we managed to keep costs under control to a great extent, with the auction itself proving to be profitable.

The reasons

• Our main objective was to be the first to enter the market, ensuring we kept our competitive advantage.
• We were advised that under our current structure, if we were to have accepted citizens from certain jurisdictions (for example the US), we would have exposed the company to legal risks.
• Implementing a FIAT gateway which adheres to our high security standards requires a strong partnership with an agent we are 100% sure we can trust with our customers’ money.
• Finding solutions to these two issues would have extended our timeline, but is something we are currently working on.
• Whilst scalability was a concern, it was not our priority. As pioneers within Asset Tokenization, we were venturing into uncharted territory. This exercise offered us invaluable experience that we can apply to our feature endeavours.

Our plans

• As the first to enter this market, we must continue to build on our competitive advantage.
• Develop a structure that will allow citizens from all over the world to participate, particularly those from the US.
• Launch partnership with our financial agent. This will allow all our clients to invest using their local FIAT currencies during the next auction.
• Develop a legal structure that is as scalable as possible, keeping costs and transaction frictions to a minimum.

Originally published at blog.maecenas.co.