As early investors in SwissBorg, we understand the importance of having a secondary market to provide liquidity and transparency for our shareholders. While order books are clearly failing to provide secondary market liquidity for Non-IPO Shares, we went back to the blackboard to enable a secondary market that fits our values and principles while bringing the most benefit to our community of shareholders. Here, we would like to share with you the ideas that we are evaluating to make the secondary market a concrete, frictionless reality.
We have a variety of ideas that we are investigating regarding this topic:
1. SwissBorg's Smart Shares Auction
A new way for shareholders to buy and sell shares through a recurring auction. The auction will allow shareholders to sell or buy SwissBorg's shares. The valuation range, the shares quantity in the auction, and the period in which the action will take place will be set by SwissBorg and communicated at least one month in advance. How it works for selling shares: if a shareholder wants to sell shares, they can request to sell a specific amount of shares through the app at a minimum price. How it works for buying shares: the process of buying shares will work on the same principle as today, based on a dynamic valuation. At the end of the auction, SwissBorg will sell private (shareholder’s) shares on a first-in, first-out basis.
Overall, this idea provides a new way for shareholders to buy and sell SwissBorg's shares, while also ensuring that the process is fair and transparent for everyone involved. By setting a specific valuation range and quantity, SwissBorg can maintain control over the market while also providing liquidity for shareholders who want to sell their shares. The formula used for the valuation range will be open-sourced.
2. SwissBorg’s Smart shares pool
Create a liquidity pool, which is like a reserve of money set aside for buying and selling shares of SwissBorg on a secondary market. This pool will be funded by a percentage of the company's annual profits. The price at which shares are purchased in the liquidity pool will be set using a formula commonly used in automatic market making such as Uniswap. This provides liquidity for shareholders who want to sell their shares while ensuring that the market remains stable and transparent.
3. SwissBorg’s Smart buyback program
SwissBorg will use a percentage of its profits to buy back shares in this program. This means that if SwissBorg has a profitable period, it will use a percentage of those profits to buy back shares from shareholders who have submitted bids. The bids will be sent through the app. SwissBorg will buy back shares starting with the cheapest bids and will continue buying shares until it reaches the maximum percentage of profits that it has allocated for the buyback program. Overall, this program provides shareholders with the opportunity to sell their shares at a price they set. At the same time, SwissBorg can use its profits to buy back shares and provide liquidity to the market. This ensures that the market remains stable and transparent for all shareholders involved.
Implementing these ideas depends on the potential constraints on product development and how regulations apply to each idea. Since SwissBorg Shares acquired during the community crowdfunding are owned through an SPV and a Nominee Agreement, the solution will have to be designed in accordance with our partner’s criteria. To this day, Apex has been of great help in shaping the potential range of solutions.
We are currently analysing the technical, regulatory, and community implications of each option to make an informed decision on which one to pursue. We will continue to communicate updates on the progress of these ideas, as we work towards bringing a secondary market to SwissBorg shares. As we clarify the next steps, we will keep our community informed and engaged. At SwissBorg, we remain committed to democratising wealth management and empowering our users to make informed investment decisions.