Distribution of Dividends in Tokens:
The distribution of dividends in tokens may vary depending on the specific terms and conditions outlined in the agreement or contract governing the investment or asset-backed tokenization. Below is a summary of how dividends in tokens, organized by the Asset-Backed Global Token Platform, are generally distributed and the guarantees in place:
1. Distribution of Dividends in Tokens:
a. Calculation of Dividends: The contract governing the investment or tokenization project clearly outlines how dividends will be calculated. This calculation is based on various factors, including the performance of the underlying asset, the percentage of ownership represented by the tokens, or other predetermined criteria. Examples of dividends promised to investors in exchange for tokens by asset owners can be found in the table below.
b. Timing of Dividend Distribution: The agreement also specifies when dividends will be distributed. Dividends may be distributed periodically, as shown in the table below (e.g., semi-annually, annually, etc.), or based on specific events, such as the sale of the underlying asset.
c. Dividend Type: Dividends are distributed in the form of tokens. These tokens can be digital assets or existing cryptocurrencies created specifically for the project, depending on the agreement.
d. Wallet Addresses: Token holders are typically required to provide wallet addresses to receive dividend tokens. These addresses must be associated with a secure and compliant digital wallet capable of holding tokens organized by the Asset-Backed Global Token Platform.
e. Smart Contracts: Smart contracts are used to automate the dividend distribution process. These contracts automatically distribute tokens to eligible token holders based on predefined rules.
2. Guarantees in Dividend Distribution:
The guarantees in dividend distribution depend on the terms specified in the contract and the reliability of the issuing institution. The guarantees and protections for tokens organized by the Asset-Backed Global Token Platform are as follows:
a. Transparency: The agreement ensures transparency in the dividend distribution process. Token holders have access to clear and up-to-date information regarding the calculation and distribution of dividends.
b. Escrow Accounts: In asset-backed tokenization projects, funds allocated for dividend payments are held in escrow accounts to ensure they are ready for distribution to token holders.
c. Legal Framework: The legal escrow contract and its listing and recording on the blockchain protect the rights of token holders’ investments and dividends from both sides. Assets in escrow are sold when token holders do not receive their dividends, with rights returned with an additional 10% compensation.
d. Regulatory Compliance: Applications comply with relevant regulatory requirements depending on the nature of the tokens, providing additional protections for token holders.
e. Token Lockup Periods: Some asset-indexed token holders may implement lockup periods during which they cannot sell or transfer their tokens. This helps stabilize token prices and allows long-term investors to receive dividends.
f. Reserve Funds: Some asset-indexed token holders may apply bonus/reserve funds, in addition to the profit margins in the table below, to cover dividend payments during times of financial distress or when profits are insufficient.
g. Audits: The Ethereum-indexed blockchain infrastructure, where tokens are registered and listed, along with our escrow regulators, provides regular financial audits, offering an additional layer of assurance regarding the project’s financial condition and ability to meet dividend obligations.
The Asset-Backed Global Token Platform brings together project owners seeking to tokenize their assets and token investors algorithmically. Responsibility and risk rest with the parties involved. It is crucial for investors and token holders to carefully review the investment or tokenization terms and conditions and seek legal and financial advice to understand escrow practices, guarantees, and available protections.
You can view the sample table of Profit and Dividend Distribution according to maturities from this link. PROFIT Tables