Overstock subsidiary tZERO was requested by GSR Capital, a Hong Kong-based private equity firm, to create a smart contract commodity token for the sale of cobalt.
GSR Capital is one of tZeros major investors with having committed up to $270 million at a valuation of $1.5 billion in tZero earlier this year. Both companies shall be extending the deadline to finalize the investment until February 28, 2019, as part of this deal.
The sale is expected to offer reoccurring tranches of electric vehicle (EV) battery-grade cobalt, with a total of $200 million of the material projected to become available for sale during 2019, and more planned for 2020.
Both of the companies have stated their intent to develop an ecosystem for tokenized community purchase contracts for rare minerals. The smart contracts allow them to track identity, purchasing, and shipping. Furthermore, the two companies also envision including security token trading platform in the region.
Sonny Wu, GSR Capital’s Chairman, and Founder says they are pushing forward with their plans to develop a first-of-its-kind cobalt offering during 2019. Furthermore, he stated that GSR and tZero shall be doing even more than just cobalt tokenization, and they’ll see further growth in the partnership including consummating an investment directly as of next quarter.
“We are excited to work with GSR and their partner on this innovative cobalt token offering,” stated Overstock CEO and tZERO Executive Chairman, Patrick M. Byrne. “Smart contract automation of these transactions will significantly reduce overall costs while effectively improving transparency in rare earth metals purchases throughout the supply chain process. We look forward to bringing the future of commodities purchasing to the global marketplace.
GSR Capital idea for a cobalt trade is quite the controversial subject in the past recent years, while the mineral powers innovative industries such as electric car products, a good percentage of the mineral comes from the Democratic Republic of Congo, which has gained a reputation for using child labor in cobalt mines.
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