The transaction, which takes place as part of tZero’s ongoing Security Token Offering (STO), sees GSR Capital pay the sum of $10 per token for 16 million tZero tokens.
Announced by tZero’s parent company Overstock.com Inc., the transaction is being made possible through an extension of the Security Token Offering up until August 6, 2018. It is a major bet and an expression of confidence in the future of tZero, which is Overstock’s majority-owned subsidiary focusing on Fintech and blockchain technology.
Though the tokens do not serve as equity in tZero, they entitle holders to a share of ten percent of the company’s adjusted gross revenue, paid out quarterly. The tokens also operate using the Ethereum blockchain’s ERC-20 standard.
It is unclear at this point whether this represents the start of a future trend that will see venture capital firms and hedge funds invest in specific cryptocurrencies, as against the ‘picks and shovels’ strategy they have favoured so far, but analysts are of the opinion that this transaction represents a huge statement of intent and may serve as a bellwether for the future of crypto investment.
Speaking about the investment, tZERO CEO Saum Noursalehi commented:
“We are overwhelmed by the support we have received from all of our investors, and thrilled to have GSR on our team as we seek to launch the world’s first security token exchange. This investment from GSR further validates tZERO’s strategy to introduce blockchain to capital markets, and this partnership will accelerate our global expansion efforts.”
tZero and GSR Synergy
Founded in 2004 under the GSR Group, GSR Capital operates from its three offices in Hong Kong, USA, and Mainland China, funding technology solutions of the future focusing on the area such as electric vehicles, clean energy, internet finance, modern agriculture, wireless solutions, and biotechnology.
The investment with tZero represents a bold bet on the future of crypto as a whole, but specifically on the use case of tZero’s DLR software, which is designed to improve the cost and operational efficiencies of securities lending activities, and to make them more transparent.
tZero’s adaptable modular platform integrates with trade participants to create a real-time, authenticated ledger which can be classified as a blockchain. Its users get the benefit of encrypted trading accounts, clearing and reconciliation services and a distributed register.
It will be recalled that tZero recently partnered with BOX Digital Markets in a partnership that saw the launch of a pioneering regulation security token exchange. According to information from tZero, this exchange will receive funding from the amount raised in its previous STO rounds.