“Security tokens are the future for the gold investment industry”: an interview with Easygold24
Can you give us more information about the Easygold Token project and how it works?
Our company, Hartmann & Benz, was established in 2019. Since then, we have consistently grown our revenues and customer base every year. Based on our experience in the precious metals and investment sectors, we recognized the potential of security tokens for our business model and retail investors wishing to enter the gold investment sector. As a result, the idea for Easygold Token was born, which has been in development for two years already.
Easygold Token extends our tried and tested operational model to a new level and offers profit share rights of 50% of our net profit (also known as dividends) to its holders. Our process begins with acquiring raw gold directly from the supplier, which is then transformed into high-quality LBMA-certified gold bars. The bars are then sold on the commodity markets with a profit of 20% to 30%. At the end of every financial year, token holders receive up to 50% of the net profit from every cycle in proportion to their current stake in the total supply. The rest is reinvested in the same process, starting the cycle anew. This allows us to scale the project indefinitely.
Why are security tokens, in your opinion, important for gold investing? What advantages do they offer compared to existing options for retail investors outside the cryptocurrency world?
As a company engaged with various gold investment products for many years, we deeply understand commodity and precious metals markets. Security tokens offer the best middle ground between advantages and disadvantages compared to traditional investment methods.
We can separate gold investment options into two main categories – acquiring the physical asset through a gold dealer, or acquiring it in a “digital” form – be it in the form of an online gold investment product, as gold futures, stocks of gold mining companies or as ETFs shares that own gold.
Acquiring gold bullion, coins, or notes is the most secure but the least flexible option, making it only suitable for long-term holders. While it allows you to acquire a tangible asset, you have to account for storage costs to ensure the security of the asset. Selling your gold takes time, and if you need to do it quickly, you might be forced to be contemptuous of lower-than-market prices.
Acquiring gold in any digital form offers the advantage of liquidity; if you want to cash out, you can pretty much do it right away – but it carries other inherent risks that you need to be aware of. Stocks and ETF shares, for example, can be diluted by the companies and are usually acquired through brokers or platforms that charge variable fees. Online gold investment products, while generally safe, are also risky since the company managing them might need to act in good faith.
This brings us to security tokens as the new and best way to invest in gold. Security tokens are similar to gold stocks – they share the same advantages. However, there is one considerable difference in favor of security tokens – unless the token developer has programmed its smart contract to allow him to issue new tokens in the future, there is no way for shareholders to see their stake get diluted. As in the case of our token, EASG, the total supply is capped, so it’s impossible for us to issue new tokens in the future.
I would go as far as to say that security tokens are the future of the gold investment industry.
What about utility tokens – what are the differences between them and security tokens when it comes to investing in precious metals like gold?
When compared to utility tokens, specifically in the context of investing in precious metals or commodities, security tokens offer two key advantages. The first one is that they allow the holder to earn passive income. One of the most well-known tests every token must undergo before financial authorities classify it in the jurisdiction it will be sold in is the so-called Howey Test. Only security tokens are allowed to offer the prospect of “income derived from the effort of others” – dividends, for example, fall under this same category. So a utility token would not be allowed to give profit-sharing rights or similar to its holders, making it an inferior choice to security tokens for that purpose.
Secondly, unlike utility tokens, security tokens are regulated in a much tighter way – to be able to sell them in the first place, you have to undergo a strict screening by financial authorities and have it approved. Any fraud is penalized heavily, significantly decreasing the probability of the token issuer planning to do a rug pull or any other form of token manipulation. The high degree of regulation ensures that the investors are protected and gives the token less speculative characteristics.
The Easygold Token project is currently offering special bonuses for early investors. If you are interested in learning more about the benefits for investors, the people behind the project, and how the business model exactly works, visit www.easygold.io.
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