A New Standard For Cryptocurrency Investor Protection.
MANTRA DAO implements drastic measures over its initial membership offering.
Since our team decided to make OM token available to the public via an initial membership offering, our number one priority has been to devise a process that would ensure peace of mind to all our investors. In the wake of fraudulent initiatives that have seriously affected the reputation of our entire industry, we are committed to give them the opportunity to control and protect their investment in our project.
We had been looking at providing this protection via smart contracts but ultimately opted for a more pragmatic and, in our views, more robust approach. MANTRA DAO initial membership offering is governed by a comprehensive set of procedures. All these checks and balances mechanisms are meant to address three key issues: fund custody, legal claim and accountability.
- Funds Custody
The issue of who controls the funds is notoriously an opaque and very often nefarious aspect of blockchain projects token sales. Over the last few years a number of third party providers of storage and security services for cryptocurrencies has emerged to address this problem. We are working with HEX Trust which a licensed custodian company that maintains all the accounting and keeps track of every single penny raised.
2. Legal Claim
While it is common practice for accredited investors to enter into a SAFT agreement with blockchain projects owners, retail investors traditionally do not benefit from the same level of protection.
We believe it shouldn’t be that way. Electronic signatures are valid under most jurisdictions and provide a very convenient, very transparent solution to retail investors protection. Which is why our team decided to make the signing of SAFT agreements mandatory for every single contributor to MANTRA DAO IMO. Once we complete KYC for a particular user, we issue a digital agreement via Docusign where the user inputs his wallet address and the amount contributed.
How is this agreement useful? Essentially it gives our investors a legal claim over their OM token ownership. Imagine a scenario where the terms of the contracts are not consistent with the funds transferred, the legal contract will take precedence. Our SAFT agreement also includes terms of severability which stipulates the conditions of eligibility for refund.
The regulatory framework that governs the issuance of digital tokens and cryptocurrencies is constantly evolving. For this reason our team has devised a very strict KYC process. This way we can hold ourselves accountable no only to the regulators but to our community.
Another key consideration when structuring this crowdfunding campaign was to prevent large investors to destroy the secondary market. Which is why we capped contribution amounts for each round of the IMO. We also abide by a strict “first come first served” policy and ensure that each contributor has a time window that is long enough to allow them to go through the different phases of the investment process.
Too many blockchain projects have failed to deliver on their promises and we, at MANTRA DAO, are determined to make ourselves accountable for the money we are entrusted with. These various measures ultimately create pressure to the development team to actually deliver upon the project.
At the end of the day we do not believe in taking any chance with investors’ money. It shouldn’t matter whether you are accredited or not, everyone should receive the same amount of legal protection and transparency over investing their hard earned money.
Besides the overwhelming support that MANTRA DAO has received from around the world, we are especially proud of the community’s recognition of our efforts to make this initial membership offering completely transparent. We believe that the blockchain industry has a lot to gain from this kind of approach and it is our hope that other projects will follow suite and help us raise the bar.
About MANTRA DAO
MANTRA DAO is a community-governed DeFi platform focusing on Staking, Lending, and Governance.
MANTRA DAO leverages the wisdom of the crowd to create a community-governed, transparent, and decentralized ecosystem for web 3.0. Built on Parity Substrate for the Polkadot ecosystem, MANTRA DAO gives financial control back to the people to grow wealth together.