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Introducing a Web3 Redemption Model

A Completely New Way to Unlock Liquidity. Participate in Redemptions by Just Interacting with a Wallet

by Pau Aguilar, Product Manager at Securitize
Sep 29, 2022

What is a Redemption?

For those unfamiliar with traditional finance, a Redemption is a liquidity event usually initiated by an investment fund.

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Imagine that a few months ago you decided to invest in a fund with low liquidity. Now you want to sell that share, but the lack of buyers makes it difficult for you to convert it in cash. In this situation, an investment fund can set up a Redemption, offering to buy investor’s shares back at a set price.

Redemptions have the following key settings:

  • Redemption Window: Determines the beginning and ending dates of the period where investors can participate in the Redemption.
  • Redemption Price: Established amount of money that investors are going to receive for each share.
  • General Limitation: The maximum amount of shares in the market that will be eligible for the redemption.

In our partnership with Arca, we introduce a completely new way to participate in a redemption by simply interacting with the issuer through the blockchain: send your tokens from your wallet to the selected Redemption Wallet and boom (🎉) all the process (token burning, contract signing…) will be done automatically.

How Does It work? The Step-by-Step

1. If you are a holder of a token that has opened a Redemption window you will get notified. Check all the Redemption info.

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2. Copy the wallet address from the Redemption page in the app.

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Side note: this wallet address will be only available in our secure app. No phishing attacks possible.

3. Send your tokens to the Wallet Address you just copied

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4. You’re all set! We will do everything else behind the scenes. Once the Redemption Window closes, you will receive your money back.

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This feature is already live and available for all the Issuers working with us and its investors. There is a lot of discussion when it comes to agree on What is Web3. We truly believe in this technology, not only for the empowerment of users and investors, but also as an interaction model capable to make owning assets easier than ever before. If buy and sell is accessible, owning what is yours should be simple as well.

This is how we are building the future of finance.

If you are a person who likes to work under high quality standards, you are passionate about blockchain, design and finance and like to work with world class team mates with cutting edge attitudes, then we are looking for you. Check out our open positions and join us in our way to make finance easier than ever before.

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