A few weeks ago, we announced the Tixl Hodlers Club and today we are excited to introduce the Tixl Global Reserve (TGR).
For every Tixl Token that Tixl gGmbH has sold, or will sell in the future, the intention is that we will pay a certain amount of Bitcoin from the sale into the TGR. This serves to provide not only transparency but also gives our investors the confidence that a certain amount of capital is available. Initially, the TGR will be funded with Bitcoin exclusively. Other assets may be added in the future.
For public traceability, the TGR will be available at the following Bitcoin address: 3M8U3mmZ7YuWTfzpMHZo8NsBESZyp9dbHt
What should the TGR be used for?
Most importantly, the TGR is intended to strengthen the confidence of our investors. With an amount of liquidity, further development is secured for a period of time. In line with this, the TGR could be used for expenses related to product development, for example. The TGR is not intended for more significant expenditure in areas such as marketing or exchange listings.
How will new Bitcoin flow into the TGR?
For every portion of Tixl Token sold by Tixl gGmbH, a corresponding share of Bitcoin is deposited into the TGR. In addition, we are already working on more ideas to create future revenue streams to benefit the TGR.
Why use Bitcoin for the Backing and not USD or EUR?
Our goal has always been to have Tixl fully decentralized. For this reason, we don’t want to establish the Tixl Global Reserve with a currency which is, itself, centralized. Due to the decentralized nature of Bitcoin, it is the perfect choice. Some consider Bitcoin to be Digital Gold.
In combination with public traceability, Bitcoin has the optimal properties required for the TGR.
Why isn’t the whole asset completely transparent?
We appreciate the importance of making our decisioning as transparent and understandable as possible, but there are several reasons why we cannot provide complete financial insight:
- At times, there may be more significant expenses that are incurred before a public announcement — for example, exchange listings. Announcing these could lead to speculation.
- Often there are non-disclosure agreements involved in negotiations related to exchanges and marketing, etc. If these types of expenses were paid from a publicly known address, we would unintentionally violate these agreements, as payments would be straightforward to trace.
- When negotiating with potential investors, it can be disadvantageous to publicly detail the funds needed to run the operation each month and amounts still available.
What happens if the TGR is not needed for project development?
There is the potential (and our goal) that the reserve is not utilized. By selling tokens until the mainnet launch, and beyond, our aim is to cover the running costs and increase the reserve over time.
Should the reserve not be needed in the long term, our aims are as follows:
The primary purpose of the TGR is to provide backing for the Tixl currency, further adding to its value. Value should be enhanced because of the Bitcoin network. It is planned that the TGR will provide more security for Tixl token owners. To the extent that is permitted by (supervisory) law, and being implementable and technically feasible, a Tixl token owner may be offered the option to substitute their Tixl tokens for Bitcoin, according to the current percentage of the backing. This only makes sense in the case of a drastic fall in the value of Tixl, and where the price is not expected to recover in the foreseeable future. Any tokens swapped for Bitcoin would be burned and removed from the circulating supply.
Please note: As the development of the TGR-project and the establishment of the TGR itself is intended only at some point in the future, regulatory requirements with German supervisory law regarding, inter alia, cryptocurrencies and token issues have not been clarified conclusively. Therefore, the TGR-project or the TGR could be subject to future legislation and/or regulations by German supervisory authorities.
Further, already existing supervisory requirements, e.g., according to the German Banking Act (“Kreditwesengesetz”), have yet to be clarified.
If it turns out that the TGR-project, or the TGR, requires permission from the German authorities (Bundesanstalt für Finanzdiesntleistungsaufsicht, “BaFin”), then we will consider obtaining the necessary permissions.
In the event it is necessary to obtain permission, or the conditions in relation to obtaining this permission are too onerous, it may be that the TGR-project cannot be realized. It may also be that existing or future supervisory requirements pose a similar threat to the success of the project.
Until the legal framework surrounding the TGR is complete, a Tixl token owner does not have any claims to receive Bitcoin from the TGR, even though this is the ultimate aim.
TGR example calculation
A theoretical example of how this would work:
Tixl Circulating Supply = 135,000 MTXLT
Tixl Price per Token = 200 USD
Tixl Market Cap = 27,000,000 USD
Bitcoin Circulating Supply = 18,000,000 BTC
Bitcoin Price per Token = 25,000 USD
Bitcoin Market Cap = 450,000,000,000 USD
TGR = 150 BTC = 3,750,000 USD
Backing Percentage = 3,750,000 USD / 27,000,000 USD = 13.9%
Backing Per Token= 150 BTC / 135,000 MTXLT = 0.001111 BTC / MTXLT
With a backing percentage of 13.9% of USD value, a Tixl owner would be able to swap 1 MTXLT to 0.001111 BTC. Our goal is to reach an average backing of 25%.
What is the Status of the TGR?
Currently, we are in the legal preparation stage of the TGR. That means we are going through all the details with the help of our legal advisors. Our plan is to send an inquiry to the BaFin regarding the regulatory conditions which must be met for the fulfillment of the TGR-project in 2020/2021.
As mentioned above, if we cannot obtain the respective permission(s) from the BaFin, or provisions of German (supervisory) law do not allow it, then the TGR-project may not be realized.
If everything proceeds as planned we are targeting 2022–2024 as that general timeframe that redemptions will be possible.
What could Impact the TGR?
Price changes of both Bitcoin and Tixl can affect the TGR. When looking at the following examples, rises and falls are always relative to the USD as the base currency:
- Where the price of Bitcoin rises and the Tixl price stays the same or falls, that will have a positive impact on backing percentage of the TGR
- Where the price of Bitcoin rises and the Tixl price also rises with the same relative factor, the backing percentage of the TGR would not change
- Where the Bitcoin price falls and the Tixl price rises, or stays the same, that will negatively impact the backing percentage of the TGR
- Where the Bitcoin price falls and the Tixl price falls with the same relative factor, the backing percentage of the TGR would not change.
Can the TGR be decentralized?
Our goal is to have the TGR be as decentralized as possible. We have concrete ideas about how this can be realized. We cannot outline this in detail until it has been agreed with the BaFin.
Is Tixl Token now a Stable Coin?
We don’t consider Tixl token a stable coin because neither Bitcoin nor Tixl has prices which are currently stable in the true sense of the word. However, the fact is we are working hard to have the biggest and most well-known cryptocurrency partially backing Tixl. While there are never any guarantees in the crypto environment, we are continuing to try and add value, and trust, to Tixl to make it the best coin it can be. We see initiatives such as the TGR as being positive for our valued investors and the Tixl project in general.
Where can I find the current status of the TGR?
The status of the TGR can be tracked here: https://tixl.me/tgr.