On Thursday, August 29th, Novem participated in NEO Global Development’s (NGD) sixth (English-based) NEO LIVE event. NEO LIVE is an Ask Me Anything (AMA) style community event that takes place on the official NEO Telegram channel. In addition to the English event, NGD also hosts weekly NEO LIVE events in Chinese via WeChat.
Novem CTO, Christoph Klocker, and COO, Fouad Soultana participated in the AMA, discussing Novem’s upcoming public token sale, security of its gold-backed NNN token, reasons for choosing NEO, and more.
The full transcript can be found below:
Denis Suslov (ecosystem growth manager of NGD): Welcome to the [sixth] NEO LIVE on Telegram. This is Denis Suslov, EcoSystem Growth Manager. Very happy to have you guys here. I will be your host tonight.
Before the session starts, I would like to repeat the background of the NEO LIVE initiative in case that you are new to the group.
NEO LIVE is a marketing Initiative from NEO Global Development, to bring latest blockchain knowledge and NEO news to the community. It’s one hour live chatting every Thursday night at 8pm (UTC+8) in the NEO official Telegram group (https://t.me/NEO_EN). NGD core teams/NEO Eco Project leaders/NEO dev community leaders/pioneering blockchain leaders will be invited to share latest technological development, industry insights with the community members.
Our guests today are Christoph Klocker and Fouad Soultana from Novem Gold.
Christoph Klocker (CTO) – Worked on several of his own startups, and helped startups and enterprises to succeed in building world leading online platforms.
Fouad Soultana (COO) previously worked as a blockchain scientist for Fraunhofer Institute, where he was involved in blockchain projects in the banking, logistics, and bio-intelligence industries. He also has more than six years experience in founding e-commerce businesses and managing decentralized team operations.
Novem is launching on NEO and we are happy to have you guys here!
Could you introduce your project please?
Christoph Klocker: Hey all, great to be here, thanks for giving us the chance to present our project.
Fouad Soultana: Hello everybody, a big thank you to Neo for giving us this opportunity.
A little about us:
Novem is a traditional business, that was running a gold store for more than 10 years. Now we combine the traditional brick & mortar stores with the digital age and through digitizing gold. We plan to open 100+ stores in Europe and create the first global gold brand through our NNN token and stores. Our existing store is a very profitable business which every future store should be as well. The next store is to be opened next Monday on September 2nd in Linz, Austria!
With digitizing gold we want to simplify owning of physical gold. You do not have think anymore about safety, insurance, transport, minimum purchases, and associated costs. Having it digitalized, you can simply have any amount in your pocket not caring about any of these issues. You can purchase minimum amounts without paying extensive management fees. This way we lower a substantial barrier towards investing into gold.
Denis: Everybody, it’s time for questions now! To make it easy for the team to trace the question, please kindly number your questions, starting from 1. eg. A raises question starting with Q1, then B raises questions starting with Q2. Please keep the questions about NEO and the team, we will retain the right to select the questions. Also, the team won’t make comments on the token price.
Q1: Why did you choose NEO in the first place?
Christoph: First of all, we like the holistic vision of NEO, creating a smart economy and the tokenization of assets, what we do with gold.
Other than that NEO is currently the most practical blockchain out there. Think of someone entering our gold stores and buying our NNN token. There are no cost for account creation, there is (currently) no GAS required, and 20 seconds block time.
So I can tell that person to download a wallet, or purchase our chainlock cards, send the tokens over and 20 seconds all is done, he then can send it further to his nephew. No need to explain them and sell them an underlying currency beforehand or afterwards.
We know it will change in NEO3 and we are therefore currently actively involving us in the discussion about the possibility to pay with a NEP-5 token for transactions.
Q2: My understanding is you hold physical gold to back a 1:1 ratio of tokens in supply. To ensure this ratio stays 1:1, is Novem audited by any third party to ensure Novem hold enough physical gold?
Fouad: Yes that is right. To ensure the overall integrity we are woking with Grand Thornton as an external auditor. They do audits on a quarterly basis. The first audit is going to be published in the next 2-3 weeks.
Q3: Why would you digitize a physical asset?
Fouad: With digitizing gold we want to simplify owning of physical gold. Currently you have to think about, safety, insurance, transport, minimum purchases. Having it digitalized you can simply have any amount in your pocket not caring about any of these issues. You can gift parts of it to your loved ones. You can sell it at market rates on exchanges instead of bargaining in a neighborhood gold store. You can purchase minimum amounts without paying extensive management fees. To cover the costs we have there’s a 0.05% transaction fee on every transaction. Apart from that there are no additional fees like for storage and insurance. We cover those expenses through the transfer fees of 0.05%. This way we lower a substantial barrier towards investing into gold.
Q4: In your opinion, will the price of NNN be followed by gold price cycle or crypto market cycle?
Christoph: The price will follow the price of physical gold, as its 100% backed by gold bullions.
Q5: Can you briefly explain your recent milestones in development of this project?
Fouad: Great questions, we had some delays due to some regulatory barriers as the NNN is considered a security in Liechtenstein, but we are about to get the approval by the FMA in the coming weeks.
We have already minted 21kg of gold and are live on the MainNet. The first official Novem Gold Store is going to be opened next week in Linz, Austria. Further locations are already in the working.
There is a lot more to come, once we have the official approval.
Q6: Can you briefly describe your economic model?
Christoph: Novem is a traditional business, that was running a gold store for more than 10 years. Now we combine the traditional brick & mortar stores with the digital age and through digitizing gold. We plan to open 100+ stores in Europe and create the global gold brand through our NNN token. Our existing store is a very profitable business which every future store should be as well.
In future we want to extend the traditional business of buying and selling gold with more services, having digital gold will make it possible to offer simple saving plans and other financial products, this will require additional licenses though. By having stores all over Europe we’ll have access to a wide customer base, so we can bring gold and cryptocurrencies to a wide set of customers and offer future digital products as well.
Q7: What are your market expansion plans? What is your market target?
Christoph: As stated in our whitepaper, with our physical stores we will start opening up stores in Europe first, before expanding further to Asia and other global markets. In fact, we are opening the very first gold store in the world on September 2nd in Linz, Austria, in which you can also buy gold-backed tokens instead of physical gold.
Our target market is everyone that wants to invest in gold and not want to bury it in his backyard. We want to make owning gold sexy again.
Q8: What is the current supply of gold in any form you currently hold?
Fouad: Currently there is 21kg of gold stored with our partner Trisuna in Triesen, Liechtenstein.
Q9: What price are you going to sell your tokens for?
Christoph: We always sell at best market price for 1 gram gold bullions.
Q10: How will you manage (hedge) the downside when the gold price goes down or crashes? If the company reports losses or goes bankrupt, are there any guarantees that holders will receive their backed in gold?
Fouad: This is a very good question! One thing we focused on mostly was that the token holder will never be affected in case of a bankruptcy of our company. In contrast to other projects, legally, the NNN token represents ownership of the gold stored in the vault. So creditors of Novem can never access any of the gold belonging to the token holder. Even if Novem goes bust, the token owner can go to the vault and pick up the gold. Talking to other projects they couldn’t even answer the question. With us, you own the gold, and we have an external auditor that is regularly auditing the amount of gold stored in our Vault. More information in our prospectus that is publicly accessible soon!
Christoph: For the NNN token, there’s no risk on our side, as we buy and mint new tokens when people buy the NNN tokens. The token holder *owns* the gold so the risk is solely on the token and therefore Gold owner.
Q11: Have you considered the future prospects of when we start mining asteroids for gold and how would you go about your business when there is a massive injection of gold into the world economy?
Fouad: Honestly, we have had this question a couple times now. It is hard to say how long it will take and what the effect on the gold price will really be, as there are too many speculations.
Christoph: I read about that as well, looking forward to see SpaceX becoming a space mining company. I guess it won’t happen in the next coming years, so let’s wait and be excited to see it happen.
Q12: Will Novem Gold adopt a staking model?
Fouad: Yes, it is already in the works!
Christoph: For our utility token NVM we are planning a staking model.
Q13: Why did you choose Liechtenstein as a country to store the gold?
Fouad: Simply said Liechtenstein is a safe haven for storing valuables. In fact, this small country is only known for this among the elites. Storing gold, diamonds, rare paintings safely is what they are highly proficient in.
But let us look at it from different perspectives.
Regulatory perspective: The regulation allows for quantity ownership. Earlier, we intended to store the gold in Switzerland, as it is likewise a safe haven for storing highly valuable assets. However, with suisse law every gold bar would need a serial number that is linked to the actual gold/token owner. When trading NNN on exchanges, we can not track who actually owns NNN tokens, and thus this was no option.
Anyhow, in Liechtenstein they follow a different approach called quantity ownership, meaning that it is only important to know the amount you own instead of knowing which gold bar exactly is yours.
Political perspective: Looking at current political evolvements, it might happen that we are right on track towards a new global recession. The event of war is also possible at any time following global tensions. In most countries there are dispossession laws allowing the government to seize assets like gold to (counter) finance the recession or a war.
Good news, in Lichtenstein there is no such law!
This is also the reason why we brand ourselves among other reasons to be the safest gold-backed token out there!
Q14: Are these auditors drilling for samples in your gold supply? Some gold suppliers have been known to put tungsten into their bars.
Christoph: When the gold is stored in the vault, the vault checks the purity of the gold using a spectrometer (I think its called that way) to make sure it’s 100% gold. Also, we only work with LBMA certified refineries and currently our partner is the oldest refinery in Germany, Hämmerle and Meurle, which we trust. As a gold holder, you are better off using us than a neighborhood store.
Q15: Are there any plans to add any other rare minerals into your project such as silver, platinum, or palladium?
Fouad: Other precious metals might be tokenized in future. When it comes to tokenizing precious metals, density and volume are important KPIs that influence storage fees (e.g. 1kg of silver is way costlier to store than 1kg 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!
Q16: Can you explain the governance policies that you have to convince people that their assets are safe?
Fouad: We are as a company 100% liable. These points will explained in our securities prospectus that will also upon approval be published.
Q17: Will there be an airdrop to NEO hodlers?
Christoph: We actually have an airdrop for our utility token NVM. We have a dual token model and a burning [model] for our NVM in place, also there’s a public token sale coming up.
Q18: What are the advantages of the NVM?
Fouad: When buying our gold-backed token NNN with our utility token NVM a discount applies. You can also use the token to buy physical gold, jewelry, or watches in our stores at a discount.
What Christoph already addressed is that there is going to be a token burn. We’ll take parts of the profit to burn tokens and eventually decrease supply.
Q19: When buying the token because it would increase its value? Or would it be a stable gold-based token?
Christoph: The NNN token is 100% backed by physical gold, so the price will always relate to the gold price. The NVM supply will be decreased over time, and price will depend on the market.
Denis: The time for the AMA is about to finish, for more information please send our guests a private message!
Good, thank you Christoph and Fouad for your time and detailed answers!
Fouad: We highly appreciate this opportunity and want to thank NEO again and thank you everyone for the great questions.
For further information please visit our Telegram group. We are happy to answer your questions.
Christoph: Thanks for having us and all the great questions.Thanks for having us and all the great questions.
Note: Some edits have been made for formatting and readability. The full conversation can be found at https://t.me/NEO_EN.