Novem, a gold storage and asset management company, conducted its first Reddit Ask Me Anything (AMA) after gathering user-submitted questions between August 9th and 12th. Novem’s CTO Christoph Klocker (u/crypto_chri) and COO Fouad Soultana (u/fs_novem) provided answers for the AMA on Tuesday, August 13th.
Alongside the AMA, Novem announced its plans to open its first gold store in Linz, Austria. In a conversation with NEO News Today, Klocker said the first store is tentatively scheduled to open on Monday, September 2nd.
The team also states that it has signed Novem’s first exchange listing agreement, with further information to be released nearer to the listing date.
In the AMA, Novem discussed the future NVM token burning process, a potential staking model, its signing of Grant Thornton as the external auditor, opting to store the physical gold with Trisuna instead of Loomis, as well as anticipation for NEO3 and NeoFS among other topics.
The full transcript can be found below (with duplicates removed):
Question 1: How are you going to create demand and value for the investors with a utility token such as NVM?
Christoph Klocker: To make the NVM valuable, we will burn tokens every quarter. Parts of the NVM we receive for purchases and parts of the transaction fees that the NNN generates will be used for the NVM burning. Over time we’ll decrease the amount of NVM significantly, it’s a similar model Binance made popular with its BNB token.
Additionally, we are working on a staking model to decrease the circulating supply available on the market. From a macroeconomic point of view, less supply leads to an appreciation of value.
Regarding discounts, as mentioned in our whitepaper, there will be various discounts. One of which is a two percent discount on NNN purchases. We talk to institutional investors and family offices, where investment amounts start at €500,000. At this scale, two percent is €10,000 in fees, so it might not be as minimal as one might think.
Attracting those kinds of investors, and larger NNN purchases will ultimately result in a higher NVM burning rate, which in return, every NVM investor can appreciate from an economic point of view.
Question 2: Will you have a website for buying and selling gold online?
Christoph: Novem will provide an online store in the future where you can buy, sell, or redeem NNN tokens at any time. So yes, you can sell your one kg of gold through our online shop or go into one of our upcoming 100+ stores. (See Question 10 about stores). If you want to redeem NNN, we even can send the gold to you all over the world. But, you need to take care of customs on your end.
Question 3: Has Novem publicly released its first audit of gold holdings at its gold storage facilities? If not, when will that be released?
Christoph: We signed the contract with Grant Thornton last week. Every quarter, the external auditor will inspect the gold vault in Liechtenstein to verify the stored amount of gold matches the number of tokens. Remember, one gram of gold equals 100 NNN tokens. The first audit will happen within the next three to four weeks. We don’t know the exact date ourselves, as they can visit whenever they want to ensure the integrity of the overall audit process.
Fouad Soultana: We chose to store with Trisuna in Triesen, Liechtenstein instead of Loomis due to a dispossession statute in German law that would allow the German state to seize gold in times of crisis or war. In Liechtenstein, there is no such law, which in return means that the gold of our token owners is safe at any given time. This was a fundamental decision as we are striving to be the safest gold-backed token there is!
Question 4: Is the gold pooled or allocated?
Christoph: It’s probably best we answer with what will be part of our upcoming prospectus:
By acquiring an NNN token, an Investor acquires ownership of a quantity of gold corresponding to the number of NNN tokens acquired from the Issuer. 100 NNN tokens represent 1 gram of gold of 999.9 purity. With the acquisition of the NNN tokens, the Tokenholder instructs the Issuer to hold and deposit their gold on the basis of a standardized maintenance and storage agreement applicable to all NNN Tokenholders. The gold of the NNN Tokenholders will be held by the Issuer for the NNN token holders in a collective warehouse in Liechtenstein. Each NNN token thus embodies a co-ownership share (quantity ownership) in the gold of all Tokenholders held in the collective warehouse.
In simple terms, for every one gram of gold we store, we issue 100 NNN tokens. The tokens legally represent ownership of the gold.
Question 5: How do the storage fees get taken?
Fouad: On every blockchain transaction, 0.05% will be taken off the amount sent, and sent to a wallet that belongs to Novem. So if you send 100 NNN tokens, 99.95 NNN will go to the receiver and 0.05 NNN will be sent to the Novem wallet.
If the NNN token trades on a centralized exchange (like Binance), there will be no transaction fees, as there is no blockchain transaction happening. Just an internal booking.
Question 6: What happens if there is a massive hack? Will you guys unlink the gold from the hacked tokens? If that’s the case where do you draw the line, so you don’t need to police every time there is a conflict like “I paid but never received the goods.”
Christoph: This is a tough question, and isn’t easily answerable. So generally we trust the blockchain and specifically NEO, that there won’t be a hack that would compromise a wallet. With dBFT, the consensus mechanism of NEO, there is no 51% attack possibility either. So no risk there. That means we are confident that the blockchain can’t be hacked.
So the only thing that can happen is that a user is hacked by acquiring a private key, or hacking a wallet, which of course is unfortunate, but nothing we can control. Nor could we verify if the user was hacked or if he claims that he was hacked. Therefore, users are responsible for their tokens at any time, and we cannot act on such hacks in any means.
Question 7: I use Vaultoro.com to trade gold and bitcoin. They stated in a newsletter that they will be launching Vaultoro 2.0 with more pairs. Will you list over there?
Christoph: If you want to trade Bitcoin and physical gold, you will have a better option in the future with our NNN token, which is ownership of physical gold. As you can trade it on competing exchanges, trading fees should be lower, and you can even redeem it at lower quantities if you want.
Question 8: Do you have a strategy in mind for encouraging the use of NNN as a quote currency for trading other cryptos?
Fouad: We are confident that a 100% gold-backed token will be a viable alternative to the fiat-backed stable coins. We are working on it, but we can’t publicly discuss that at the current time.
Question 9: Is the soft cap for Novem’s public token sale still US $3.4 million, and the hard cap of US $132.6 million?
Fouad: The softcap is €5,000,000 (today’s exchange rate in USD: $5,609,050).
The hardcap is €117,000,000 (today’s exchange rate in USD: $131,240,187).
Question 10: Novem plans to open 100 physical stores following a (hopefully) successful token sale. What are the costs associated with opening a store? How does Novem anticipate building such a large physical presence in a short timeframe?
Christoph: 100 stores is an ambitious number, but we see running these stores as vital to our strategy to establish the NNN token as the best gold token available. Mario Schober, our founder, has been running a very profitable store for years. We want every other store to be as profitable as the current one, which will feed back into the whole business. So we won’t rely solely on the token sale, but we will reinvest profits to the further expansion.
To maintain high-quality standards, we will not open 100 stores at once, but rather over a few years time span to use our funds strategically.
From the feedback of our community, the option to redeem physical gold is critical. With all these stores we will make it possible for customers to redeem their gold at any time. Either within the store or sending the physical gold to the customer.
Question 11: What exchanges do you plan on listing NVM and NNN? Switcheo? Non-NEO originated platforms? Centralized exchanges?
Fouad: The NNN is classified as a security in Liechtenstein. Therefore, the NNN will most likely the only to list on security exchanges within European legislation. However, in other jurisdictions (i.e., in Asia), we already have legal opinions, which state that our gold-backed token might not be considered a security.
For the NVM token, which is classified as a utility token, it can be listed on any exchange.
We are in discussion with exchanges, even a Top 10 exchange, and have already signed contracts for listing. Generally speaking, we want to list all over the world and will work on that over the upcoming months and years. However, we think the quantity of exchanges should not be the priority. Rather, being a successful business with profitable stores and being the most trustful gold token that is traded on the high-quality top exchanges out there.
We will keep you posted about listing announcements.
Question 12: Does Novem have any plans to digitize other precious metals?
Christoph: Other precious metals might be tokenized in the future. When it comes to tokenizing precious metals, density, and volume are crucial key performance indicators (KPI) that influence storage fees. For example, one kg of silver is way costlier to store than one kg of gold. However, it is too early at the current stage to discuss this matter as we are a laser-focused on establishing the safest gold-backed token out there!
Question 13: Have you seen participation in your token pre-sale from a diverse geographic group?
Christoph: We have investors from all over the world and have received interest from both retail and institutional investors.
Question 14: What are your thoughts for NEO3? What do you want to see in the next iteration of the NEO blockchain?
Christoph: With NEO3, NEO will have the best all in one package of any blockchains out there. High transaction speeds, oracles (Internet Resource Access), and NeoFS will allow sophisticated dApps which are not easily possible today.
We are especially looking forward to the Internet Resource Access (IRA). As mentioned, our NVM token gives two percent discount on NNN purchases, so what I envision is a smart contract where I can send the NVM to, and receive NNN back.
Currently, it is not possible, as the contract neither knows the current NVM price, nor the NNN price (which is the price of gold). In NEO3, I can request both prices using oracles (IRA) and then calculate the exchange rate. So, the utility for our NVM will be much improved then.
Question 15: Based on the work NEO SPCC has done thus far, how do you anticipate storing the audits on NeoFS?
Christoph: NeoFS is something we mentioned in our whitepaper from the very beginning. External auditing and storing these audits on the blockchain was baked into our concept very early, so we highly anticipate the release of NeoFS.
Note: Edits have been made for formatting and readability.
The full AMA can be found at the following link:
About The Author: Dylan Grabowski
Dylan is a reformed urban planner with a passion for covering the Neo ecosystem. His objective as a writer for Neo News Today is to report news in an objective, fact-based, non-sensational manner. When not behind a computer screen, he can be found in the mountains rock climbing. Find Dylan on Twitter (@GrabowskiDylan).
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