Weekly Ways to Earn Crypto: ArCoin, a US Treasury backed Security Token
This series has one goal: To make money. In the pursuit of making money, however, there are two approaches. First, you can spend time (labor) to earn money by performing tasks for others. Second, you can utilize cash (capital) to allow it to earn for you. This second approach is the goal. Use money to make money.
ArCoin is a project that we have been working on at Tokensoft for about a year. We are providing the tech stack for the Arca team to issue, manage, and track the ArCoin asset on the Ethereum blockchain as an ERC-20 token. The Arca team has put in a lot of effort to get this pushed through the regulatory barriers and I'm Super Stoked (TM) to see it go live.
The super high level background for ArCoin is that a '40 Act Fund has been set up and approved by the SEC to hold US Treasuries and to track the ownership of the fund as an ERC-20 on Ethereum. Holders of the tokens are allowed to transfer and buy/sell peer-to-peer, with one main exception: all holders of the tokens must go through a KYC process so the fund knows who is holding it. This logic is enforced with the ERC-1404 standard that uses what we call "Preventative Compliance" to prevent anyone from taking on chain actions that would be against the rules. Essentially, all holder's accounts are whitelisted to hold the tokens and if you try and send to a non-whitelisted address, the transaction will fail.
Another interesting aspect of this token is that it will pay dividends out on a quarterly basis. If the US Treasuries held in the fund earn a return, you will be sent additional ArCoin to your account.
OK... enough with the background. Let's invest in this asset and see how it works.
First, head over to the ArCoin website. Here you will find all the details about how it works, what to expect, FAQs, and links to the SEC Edgar filing.
Lots of FAQs since this is literally the first time in the world that an SEC approved fund is running on Ethereum.
Once you are ready to purchase, you can head to the investment portal and start the process.
Standard email verification...
You do have to choose whether you are buying new ArCoin or redeeming existing ones. The redeem option is only going to be available on a quarterly basis. This ensures there will always be an option to sell back your investment if desired.
All right, so now begins the KYC process. This is pretty standard. You will need to provide your contact details and a photo ID.
The KYC process can take up to 3 days but is usually pretty fast. The main thing is that all details need to be accurate and the company will need to make sure you are not on any Anti-Money Laundering (AML) watchlists.
Once you are verified, you can start the purchase.
There is a $1k minimum investment and you must specify where you want your tokens sent. If you choose the Tokensoft Investment Account option, you will get a new multisig (non-custodial) wallet created for you and have the best experience (I am biased).
To purchase, you will need to send in a USD wire or send an ACH payment. The big thing to note here is to include your Transaction Number in the memo or details field of the wire. If you don't do this, it can delay the processing since they will need to manually determine where the funds came from.
Once the funds are posted, your tokens will be minted to your wallet. If you chose the Tokensoft Investment Accounts option, all you have to do is log into the account with the same username/password you logged into the ArCoin investment portal and you will see your funds.
Here you can see I have $5k of ArCoin minted to my account.
Drilling into the asset you can see the deposit into the account. This shows address 0x00000... because it was a new mint of the asset into my account.
Running the Numbers:
Amount Invested: $5,000 + $30 Wiring Fee
Current Value: $5,000
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