Libra Investment Token: Navigating The Purchase Process

Libra Investment Tokens are not available to the general public. They are sold exclusively to the founding corporate members of the Libra Association, a not-for-profit organisation based in Switzerland, and accredited investors. Each of the 28 companies that Facebook recruited to run validating nodes as founding members of the consortium invested at least $10 million for the privilege. In return, they received Libra Investment Tokens as a financial reward. These tokens also represent voting power over how the reserves are managed.

Libra Investment Token founding members

Libra Investment Token is a security, unlike the Libra coin, which is a currency that will be broadly available to the public. The investment token is sold to the founding corporate members of the Libra Association, a not-for-profit organisation based in Switzerland, and accredited investors.

The Libra Association has several layers of governance, the most powerful being a council. Each member organisation has a representative on the council. The council has authority over standard governance matters, such as appointing an executive team, setting compensation for the top executive, and managing the currency's underlying reserves.

The 28 founding members of the Libra Association include:

• Payments: Mastercard, PayPal, PayU (Naspers' fintech arm), Stripe, and Visa
• Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, and Uber Technologies, Inc.
• Telecommunications: Iliad and Vodafone Group
• Blockchain: Anchorage, Bison Trails, Coinbase, Inc., and Xapo Holdings Limited
• Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, and Union Square Ventures
• Nonprofit and multilateral organisations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, and Women's World Banking

Each of these founding members invested at least $10 million to join the Libra Association. In return, they received Libra Investment Tokens. Their share of the total tokens translates into the proportion of the dividend they earn off of interest on assets in the reserve.

Libra Investment Token voting power

The Libra Investment Token is a security token that is sold exclusively to the founding corporate members of the Libra Association, the governing body of the Libra blockchain, and accredited investors. Each founding member of the Libra Association must invest at least $10 million to join and, in return, receives Libra Investment Tokens. These tokens give holders voting power in the governance of the Libra blockchain and a stake in the interest gained on the reserve assets backing Libra.

The Libra Association has several layers of governance, the most powerful being a council. Each member organisation has a representative on the council and one vote, subject to a cap of 1% of the total votes to prevent the concentration of power. The council is responsible for appointing an executive team and board of directors, managing the currency's underlying reserves, and making technical decisions.

The Libra Investment Token provides holders with proportional clout in the early governance of Libra. While an investor who buys the tokens doesn't have to run a node, they won't get to vote as members unless they do. The tokens also produce dividends for the holders, generated by the yield of assets held in the Libra Reserve.

The Libra Association includes many leading US businesses, such as Mastercard, Visa, Uber, Lyft, Coinbase, and Facebook, each with one vote in the governance. This provides a level of decentralisation that protects against any single player, including Facebook, from hijacking Libra for their own gain.

Libra Investment Token value

Libra Investment Tokens are a type of security, according to Facebook, and are sold exclusively to the founding corporate members of the Libra Association, a not-for-profit organisation based in Switzerland, and accredited investors. Each of the 28 companies that Facebook recruited to run validating nodes as founding members of the consortium invested a minimum of $10 million for the privilege and received Libra Investment Tokens as a financial reward.

The Libra Investment Tokens represent voting power over how the reserves are managed. The spoils of the interest-bearing instruments will go to the project's heavyweight backers, such as Visa, Mastercard, and Uber, rather than the Libra holders among the general public. This is because the Libra Investment Tokens are tied to the interest accrued on the reserves. The more an organisation invests, the more tokens they receive, and the more voting power they will yield.

The Libra Investment Tokens are like shares in Bank of America, which derive value from expected future cash flows. The Libra cryptocurrency, on the other hand, is like a check, which you can cash at Bank of America but is only worth its face value.

Libra Investment Token vs Libra

Libra is a cryptocurrency announced by Facebook in 2019, which will allow users to buy things or send money to people with nearly zero fees. It is designed to be a stablecoin, meaning its value is tied to a basket of underlying assets, including bank deposits and short-term government securities for historically stable international currencies such as the dollar, pound, euro, Swiss franc, and yen.

The Libra Investment Token is the second digital asset introduced by Facebook as part of its crypto project. Unlike Libra, the investment token is a security and will be sold to a more exclusive audience: the founding corporate members of the Libra Association and accredited investors. Each of the 28 companies that Facebook recruited to run validating nodes as founding members of the consortium invested at least $10 million and received the Libra Investment Token as a financial reward. These tokens will produce dividends for their holders, generated by the yield of assets held in the Libra Reserve.

The Libra Association will be responsible for the development of the token, the reserve of real-world assets that gives it value, and the governance rules of the blockchain. Facebook will not fully control Libra but will instead have just a single vote in its governance, like other founding members of the Libra Association. Each member, including Facebook, will have up to one vote or 1% of the total vote (whichever is larger) in the Libra Association council.

While Libra will be broadly available to the public, the Libra Investment Token is only available to the founding members of the Libra Association and accredited investors. To become a member of the association, applicants must meet certain criteria, including having a half rack of server space, a dedicated high-speed internet connection, a full-time site reliability engineer, and enterprise-grade security. Businesses must also hit two out of three thresholds, including having a $1 billion USD market value or $500 million in customer balances, reaching 20 million people a year, or being recognized as a top 100 industry leader.

In summary, the key difference between Libra and the Libra Investment Token is that Libra is a stablecoin cryptocurrency available to the public, while the Libra Investment Token is a security available only to the founding members of the Libra Association and accredited investors. The Libra Investment Token offers the potential for significant dividends, while Libra is designed to provide a stable medium of exchange with low transaction fees.

Libra Investment Token risks

Libra Investment Token is the second digital asset introduced by Facebook's Libra cryptocurrency. While Libra is a stablecoin, the Libra Investment Token is a security token. In order to become part of the Libra Association, applicants have to buy at least $10 million of the token. Each founding member, having committed at least $10 million to the project, will receive an equivalent amount in Libra Investment Tokens.

• The Libra Investment Token is only available to accredited investors and founding corporate members of the Libra Association. This exclusivity may limit the liquidity and tradability of the token, making it difficult for investors to exit their positions if needed.
• The value of the Libra Investment Token is closely tied to the success of the Libra network. If the network fails to gain traction or faces regulatory hurdles, the value of the investment token could decline significantly.
• The Libra Investment Token is subject to the governance and decision-making of the Libra Association. If the association makes poor decisions or fails to effectively manage the Libra ecosystem, it could negatively impact the value of the investment token.
• As with any cryptocurrency, the Libra Investment Token is subject to regulatory and legal risks. The regulatory landscape for cryptocurrencies is still evolving, and changes in regulations or enforcement actions could impact the viability and value of the investment token.
• The Libra Investment Token is a relatively new and untested concept. As such, there may be unknown risks or challenges that emerge over time, including technical, security, or operational issues that could impact the value of the token.
• The Libra Investment Token is backed by a basket of assets, including major currencies and government debt securities. However, the value of these underlying assets may fluctuate, and there is a risk that the collateral may not be sufficient to cover the value of the tokens in circulation.
• The Libra Investment Token is influenced by market forces and can be subject to volatility. Factors such as changes in investor sentiment, competition, or economic conditions could impact the demand for and value of the token.

Frequently asked questions