Portland-based blockchain startup Chroma has launched Chroma.fund, the world’s first blockchain-enabled IPO platform to allow anyone to purchase shares of companies without brokers and intermediaries.
The Chroma.fund platform issues digital certificates for stocks on the blockchain network -- a transparent distributed ledger which allows both investors and companies to track the purchases of stocks on the platform.
The company is targeting companies that are not large enough to go through an IPO in major stock exchanges such as the Nasdaq.
“We're targeting a sector that has been locked out of investing in private companies since the 1930s: individual investors who earn less than $200,000 a year,” Chroma.fund CEO and co-founder Marcus Estes told
“Large corporations have for years benefitted from their ability to raise money directly from the public. But smaller businesses are forced to rack up credit card bills and bank loans in order to get their dream off the ground. As of today, your local coffee roaster may use Chroma.fund to raise investment from their customers and community. This movement will reshape the entire American economy,” he said.
Each certificate or “bond” issued by the platform represents a pre-defined percentage of a company’s gross revenue. Payments to investors and owners of the bonds issued by the Chroma.fund platform will be received through the company’s payment utility in U.S. dollars. The investors can trade these certificates on a securities exchange that the company plans to launch as soon as they receive approval from authorities.
“The underlying crypto security will also make these bonds tradable, if and when we're approved to launch a securities exchange,” said Estes.
Rebuilding Wall Street from Scratch
The Chroma.fund platform has one main difference from other blockchain-based crypto security and asset settlement platforms such as Symbiont, T0 and Digital Asset Holdings. While these platforms work to optimize existing financial platforms and banking systems in the Wall Street, the Chroma team is trying to rebuild the Wall Street scratch, and replace traditional financial platforms and settlement systems like the Nasdaq.
“We're closely watching Symbiont, T0 and Digital Asset Holdings. Each of them could be considered a competitor, if not for one key distinction: They're selling technology to Wall Street -- we're using Bitcoin to rebuild the system from scratch. You don't need a broker to invest on Chroma.fund,” Estes told
Estes further emphasized the importance of bitcoin and its underlying technology, the blockchain technology in the development of their platform, Chroma.fund. Over the past few months, many platforms seeking to issue crypto security on the blockchain network have emerged. However, the majority of them are still trying to create and develop their own blockchains and issue their own cryptocurrencies, instead of using an existing secure blockchain such as the bitcoin blockchain.
“Using a traditional web application to store investment certificates is a really bad idea. It would be as hard to do well as storing credit cards. The blockchain makes it possible for us to rebuild Wall Street's complex system of registering ownership of investment securities at a fraction of the institutional cost. Which means we can afford to take smaller companies public. Chroma.fund wouldn't be possible without Bitcoin,” Estes said.