Lykke Token Sale: a colored coin exchange platform - Smith + Crown

Lykke Token Sale: a colored coin exchange platform

Lykke is a crypto-asset exchange platform built on top of the Bitcoin network. They are selling tokens representing shares in Lykke Corp.

Lykke is holding a one year forward sale of Lykke coins. This is their second public crowdfunding offering. Initial rounds of investment raised (including off-chain, private offerings) raised $2.8 million.

Project Description

Lykke is a crypto-asset exchange platform built on top of the Bitcoin network. The Colored Coins protocol is used to issue securities backed by the value of real world assets. Users can issue stocks, company shares, or commodities backed tokens using fractional Bitcoins. These asset-backed “colored” coins are then traded on the decentralized Lykke exchange.

What is the token being sold?

Participants can purchase Lykke Coins which represent shares in Lykke Corp., a Zurich based LLC. One hundred Lykke coins is the equivalent to one Lykke share.

Lykke shareholders are eligible to participate in annual shareholders’ meetings and cast a vote (one share, one vote) in decisions brought forward for shareholders’ consideration. Shareholders are also entitled to future dividend distributions; however, at the time of writing, no dividends have yet been distributed.

What are the sale terms?

50 million Lykke coins will be made public in this sale, representing 500,000 Lykke shares out of a total of 12,856,900 (4%). 30 million Lykke coins (300,000 shares or 2.3% of the total) are already in circulation due to previous funding rounds.

Purchasing Lykke coins in this sale constitutes a forward contract between Lykke Corp and the investor. Investors can obtain Lykke coins at 0.04CHF (a 20% discount compared to the 2016 crowdsale rate) on the condition that they hold the coins for a minimum of one year following the sale date. After a year, if the price of Lykke coins is less than 0.04CHF, Lykke Corp. will make up the difference to investors. Otherwise, investors have the option to sell their Lykke coins on the open market.

According to the investor deck, the founder and team members own 64% of shares, the Lykke Corporation treasury owns 10%, seed investors own 22%, and ICO and post-ICO investors own 4%. This sale involves another 4%, though it is not clear out of whose portion they are taken.

What is the project status?

In the eight months since their May 2016 launch, Lykke has processed 12,500 transactions worth more than $45 million. As of January, 2017 the Lykke network had 3,650 registered users. A variety of assets have been registered, ranging from Lykke’s own shares, shares in a mining operation, and Mangrove tree CO2 certificates.

Lykke has a functioning wallet for iOS and Android. Users can buy, sell, and even issue shares on the Lykke platform. Currently, Lykke is applying for an investment firm license with the Financial Conduct Authority (FCA) for a multilateral trading facility (MTF) to offer a non-exchange financial trading venue.

Lykke services are not available to the residents of United States, Canada, Japan, and Australia.

Who is the team behind the project?

The Lykke team currently consists of twenty members in ten countries. Lykke plans on using 20% of the funds raised in this crowdsale to further build up their team.

CEO Richard Olsen is an experienced entrepreneur and co-founder of OANDA, a currency information and exchange company. He is also a visiting professor at the Centre for Computational Finance and Economic Agents at the University of Essex.

COO Sergey Ivliev was named the 2016 IT Expert  & Risk Manager of the year by the Risk Management Society of Russia. He is also a professor of Econometrics at Perm State University.

Official Resources