Once the number of security tokens issued on the Platform reaches five, the Platform will construct the index encompassing all the Platform’s security tokens (ST).
After the issue of 10 ST on the Platform, an index token will be issued.
As illustrated on the picture below, proceeds from selling of index tokens will be used to buy all the security tokens issued on Smartlands in proportions defined by the index calculation algorithm. Security tokens balances will be amended in case of deviations from the proportions or issue of new ST on the Platform. The index token will make the Smartlands index of security tokens investable providing an opportunity to buy all the tokens in a certain proportion with one action.
We expect Smartlands Platform’s security tokens to become a popular safe haven assets for crypto investors and high-yield low-volatility investment for retail fiat investors. If an investor is not an expert in fundamental analysis and is unable to pick a specific token efficiently, the index token is the optimal way to make a low-risk investment and get familiar with security tokens without having an extensive expertise in the field. Index token is diversified by design therefore a possible failure of an individual security token is not going to significantly affect the entire portfolio.