Listed financial securities
Synthetics, decentralized exchanges
Trading fees and costs
Placing and Booking Orders
Trading Tokens on Markets
The Red Matter Energy Token
For Company Issuers
Issuing a Security Token
Listing your Security Token
Marketing Security Tokens
Key points about Red Matter Capital platform:
View an intro video
A security is a negotiable financial instrument that holds some type of monetary value. It represents either an ownership position (e.g. shares) in a company, a creditor relationship represented by owning a debt obligation, or rights to a share of the company’s future revenues/profits.
Companies on Red Matter sell shares and securities directly to investors, cutting out investment banks and Wall Street middlemen. Typically, early-stage investors are limited to VC’s, brokers and banks, with individual investors unable to access potentially valuable deals. Red Matter allows individual investors to directly invest in companies they believe in.
Crowdfunding typically raises financing for new businesses in exchange for a product or service to be delivered in the future. Securities issued for a project provide the means for investors to receive a share of the project’s financial success, either through shares in the company or a share of revenues/profits.
A Pre-IPO company may issue three types of financial securities: equity, revenue share and debt. An equity-based security provides the investor with a number of non-voting shares in the company that owns the project. A revenue share security grants the investor, rights to a percentage of revenues that the company receives. A debt security is a loan for a fixed term and interest percentage that the company commits to pay to the investor when the obligation becomes due. A Debt security may be represented as a fixed income note or a convertible note where the investor is able to convert the note to shares at the date of maturity. Each of the different security types are transferrable and sellable to other investors on Red Matter’ secondary market exchange.
An investor may sell securities to another investor on Red Matter’s Primary Market exchange. Transactions on the exchange are executed by Blockchain smart contracts that enable peer to peer transactions. Additionally, if the Pre-IPO company issued a synthetic token, an investor is able to convert the security token into a synthetic token and trade it on a supported Decentralized Exchange to obtain liquidity and earn commissions when staked in a pool.
There are no restrictions for purchasing financial assets on Red Matter unless the account holder is domiciled in an OFAC country. For orders exceeding USD 5,000, Red Matter will request additional information on your personal details including ID, proof of residency and address.
When a buy order for a stock or commodity is created and paid for, the buyer receives a booking confirming your purchase and a status field on your order. When the status changed to ‘Filled’, it indicates the order was processed, indicating that the order was accepted.
After an order is filled, digital securities are issued on a Blockchain smart contract that are backed by the stock/commodity which was purchased. The digital securities are pegged 1 to 1 against the assets purchased, allowing to easily trade them on decentralized exchanges or investors in the crypto community.
For now, Red Matter accepts only LTC coin as a means of fast booking unless the investor proceeds to fund their account in advance with fiat.
Transfers on Blockchain smart contracts can be credited in seconds using crypto whereas fiat may take days to be received which makes the limit order price a buyer placed no longer valid by the time fiat is received. When Red Matter receives an LTC transfer, it converts to fiat, transfers the funds to the Red Matter broker account and executes the order within 1- 2 hours.
You can fund your trading account with fiat. Send an amount in Euro or USD that you wish to fund your account based on expected trades. Once received, the user may go to their dashboard to book an order and receive a trade confirmation within minutes.
You can sell your financial securities by selling its security tokens on the Red Matter Primary Market Exchange. You can also place a cash out request to Red Matter as a Sell Order, subject to terms and conditions.
RMC synthetics are different because they are fully backed by assets. Not only are synthetic prices protected against devaluation as result of the asset price creating a floor, they can also potentially earn money in more ways that traditional investments or non-asset backed tokens.
Some digital securities on Red Matter have underlying smart contracts that can be converted 1 for 1 into a synthetic token that can be traded and staked on a secondary DEX market, such as Pancake Swap or Uniswap. Go to the tab ‘Synthetics’ to view all listed assets available on DEX markets.
You can buy by doing a Swap with crypto for the token on the RMC Synthetics page or on a DEX market like Pancake Swap.
Tokens are made available when investors purchase securities and stake them on the smart contract as synthetics. If you already own security tokens, got to your dashboard and Exchange tab to convert into Synthetics. Alternatively, from the RMC Synthetics page, click on the Liquidity tab for listed asset to convert securities into tokens and add them to the pool.
If you do not own the security, follow the steps outlined in the section ‘Listed Financial Securities’
Tokens are backed by digital securities (e.g. a stock) and are available for sale only in case there are sufficient digital securities to convert into Synthetic tokens, In case there are no securities in the pool, you will receive a notification that you are unable to conduct a Swap. In this case, you can add Synthetics yourself by following the steps outlined above to buy the security and converting them into Synthetics.
Synthetic tokens are backed by underlying real assets that protect the value of tokens traded on DEX markets. For example, if you own Telsa stock and have digital security Tesla tokens, you can convert them into synthetic tokens that get traded on DEX markets. If the DEX market synthetic token price becomes lower than the security, you can sell the synthetic back into the security without incurring a loss on your original investment.
If you invested in a Pre-IPO company, your security tokens get liquidity when trading them on DEX markets where liquidity pools are staked by investors. If you invested in a publicly listed financial security, you can earn additional returns by trading the synthetic on a DEX market.
When purchasing Pre-IPO security tokens, the costs are paid for by the project issuer. If you pay in a different currency than the project currency, you receive the amount of securities after converting into the issuer’s currency.
When trading security tokens on the Red Matter Primary Market, sellers pay a 1% commission on the sale to Red Matter. However, when buying or selling tokens using Red Matter Energy (RME) crypto you pay 0% commission.
When trading synthetic tokens on DEX markets, traders pay commissions directly to the DEX market. When converting a synthetic back into a security token, traders pay a 0.25% commission on the sale to Red Matter.
When buying or selling a security (stocks, ETFs, REPO bonds, commodities) on a publicly listed exchange, the following commission fees apply to your order depending on how you pay for the security.
When paying with Litecoin (LTC):
When paying the Red Matter Energy (RME) crypto currency:
Here is an example of a sample trade when paying with Litecoin (LTC):
Here is an example of a sample trade when paying with Red Matter Energy (RME):
With the exception for REPO bonds, there are no management fees for trading on Red Matter.
Investments in REPO bonds are subject to the following management fee schedule:
* Repo lending rate subject to change and confirmation at time of order
There are no up-front management fees charged to an investor. The fees above are deducted from coupon payments.
Example scenario: calculation on a $1M nom value with $100,000 invested Capital with an assumption the investor sells the bond assets on the 365th day from initial settlement date.
|Coupon 5 %||50,000|
|Admin fee 1%||1,000|
|Success fee 20%||4,200|
|REPO finance 1% *||9,000|
When placing an order for a listed security you are presented with fields for Quantity, the Limit Price and Validity Date.
After entering enter those fields, you are placing an order at a maximum price within a valid time period. We suggest increasing the Limit Price to account for market volatility. Amounts paid over the purchase price will show as a credit on your account and can be used for another order.
The order form indicates the amount of LTC tokens you need to pay to place your order. The amount is calculated to include a real time conversion of LTC to fiat (normally USD), the gas fee and the Red Matter trade fee.
When submitting your order the payment form will display the amount of LTC you need to send along with the unique wallet address for this order.
Important! You must send the same LTC amount indicated to the exact wallet address displayed on the form. Should you send by error to a different address, your funds will most likely be lost and not recoverable.
Your order status is displayed under the Trade tab and the Orders list on your dashboard.
The status fields on your order track indicate the different possible stages of your order:
Waiting for payment
This shows when your payment is being confirmed on the Blockain before crediting your account. Normally takes less than 1 minute.
This shows your LTC payment was confirmed on Blockchain and is being converted into the asset’s fiat currency and thereafter transferred to your account for booking your order. This may take up to 30 minutes in certain conditions.
When your order Limit Price is less than the current market price, your order will remain Pending until the market prices adjust or you hit the Cancel button to re-book a new order.
Filled means your purchase has been executed. You are issued security tokens against the asset you purchased which you can find on your dashboard under the Holdings tab.
This indicates the amount of funds received after the LTC was converted to fiat is less than the Limit Price you set. You are able to re-book your order and the amount you have previously sent shows up as a credit on your account that is applied to your new order.
This happens when your order was not filled within the Validity Date due to market volatility. You may re-book your order with a new Limit Price.
To invest in a pre-IPO company, hit the Invest button to open the form where you fill in for the amount of securities you are purchasing. The amount of security tokens you will receive is automatically calculated and displayed along with the amount to pay and the currency of the securities.
When submitting your order the payment form will display the amount and currency to pay. In case of a fiat payment the options include Credit Card, SWIFT and SEPA for fiat required transactions. If the securities price is denominated in crypto, you are presented with the crypto amount you need to send along with the unique wallet address for this order.
After paying for an order, the status field indicates ‘Waiting for Payment’ until your funds are received and then changes to ‘Purchased’. The time for receiving funds varies depending between 1 to 3 days depending on the type of transfer.
An investor may buy or sell pre-IPO company’s securities on a Primary Market when the security represents the actual asset offered for example shares in a company. Placing a Bid or Offer is made by going to the Trade page and the Exchange tab. When a transaction is confirmed it appears under the Portfolio tab in the Transactions and Holdings list.
You may trade a Synthetic token of an asset, either a listed public security or a pre-IPO company issued security when the security token for the asset has been linked to a BEP 20 token via the Red Matter smart contract for issuing Synthetics. When a BEP20 token is available for a security it appears in the list of assets on the Secondary Market table.
To trade a Synthetic, go to the Synthetics page https://redmatter.capital/FinSecurity/Search#dexcont or from your dashboard go to the list on the Secondary Market table under the Trade tab and hit the ‘Trade on DEX’ button to open a page where you can Swap tokens or Add Liquidity.
When trading a security on Red Matter’s Primary Market, investors can trade different project tokens even when tokens are listed in different currencies (e.g. USD, Euro, ETH), The Red Matter Energy (RME) token is a master crypto token for converting into or out of different project tokens.
For example, when you sell a project token denominated in USD, you receive a converted and equivalent amount of RME from a buyer, You are then able to use RME tokens to purchase ETH based security tokens in another project.
Transactions are settled using RME’s smart contract to ensure transfer against payment. RME is pegged 1 to 1 with USDT crypto and converted into a project’s fiat or crypto currency when settling transactions.
When buying a security token on the Primary Market, the conversion between RME and the project’s currency is displayed.
When buying a security token, add RME to your wallet using Meta Mask and proceed to buy RME with USDT.
If you sold a security token, go to My Wallet and the Cash Account tab to find your RME balance. Hit the Withdraw button to sell RME and send USDT to your wallet.
A company can issue a security token against an asset that is registered on Red Matter and sell tokens for fiat or cypto.
Assets that can be registered on Red Matter include:
Listing involves setting up a project based on the type of asset backed security to be issued.
There are 2 parts for creating a listing:
Part 1 requires the company to fill out information on the company project, upload content and provide a list of team members.
Part 2 requires providing details and legal information on the company, the asset, type of investment offer, asset valuation and the amount of funding to be raised.
After registering yourself as a company looking to raise funds, you are able to create a project by logging into your dashboard and clicking the button ‘Add Project’ located under the Projects tab.
After submitting Part 1 of your project, the Red Matter compliance team will review the information provided. The status is ‘Waiting for Approval’.
If approved, the company is allowed to then create an investment offer. When receiving approval, you will receivean approval notification and the ‘Create Investment Offer’ button appears.
Click on the ‘Create Investment Offer’ button to proceed to provide the details of your offer and for the issuing of your security token,
When you Save your investment offer after carefully reviewing it, the Red Matter compliance team will review the asset backed investment offer information provided. The Invest Offer status is ‘Waiting for Approval’. While the offer is under review, you are able to Edit your offer.
If approved, the company is allowed to then issue its token for investors to purchase. The Invest Offer status is ‘Approved, Ready for Publishing’. After the offer is approved, you are unable thereafter to Edit your offer without submitting a request from the compliance team.
Note: the compliance may request additional information from the company issuer at any stage during the listing process.
After receiving approval of your investment offer, you are able to list your project tokens on Red Matter’s centralized exchange by clicking on the ‘List on RMC’ button.
You may also choose to list your tokens on a decentralized exchange (Pancake Swap) by clicking on the ‘List on DEX’ button. To know more on how DEX trading works, review the investor section ‘Trading Tokens on Markets’
Company-issuers can use Red Matter’s marketing tools to give reward tokens to followers in exchange for actions that help promote your project. For example, a follower may write a review, post a story or provide referrals that help to build a following. In return for those actions, the fan receives free reward tokens. Reward tokens are stored in an encrypted wallet that is provided to both the fan and project owner.
Projects can offer rewards in the form of vouchers that are priced in tokens. For example, an issuer may give a discount on your securities in exchange for reward tokens. The reward possibilities are limited only by your creative thinking.
To issue rewards, go to your issuer dashboard and click on the tab ‘Rewards’, followed by the ‘Add Reward’ button. Create your reward by selecting the Reward type and amount of tokens to be offered
Followers can spend their reward tokens when you create a Voucher. To create a voucher, click the button ‘Add Voucher’ and select the Voucher Type.
Enter the voucher cost to the follower in the amount of tokens (Cost) and the method of payment (Payment Token). The payment token is the reward tokens earned by a follower or you can select Litecoin LTC in case you want your voucher to be purchased).
Potential investors are able to follow your project by subscribing to your news feed. To create your news feed, click on the tab ‘Marketing’ and the ‘Add News’ button, Followers of your project will receive your news feed on their dashboards and email and be encouraged to invest as your project progresses and deals are made.