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Token Creation

This page serves the purpose of a step by step guide to token creation within the Chintai application.

Token creation is a feature that is available to companies that signed on to the Chintai website and is a way to list assets that are later available for trade.

When your account is verified with the application and you have to let Chintai team know whether you wanted to create a company account or not and we will turn your account into one.

Once this is done the real token creation process can be started.

Token creation is located in the token tab to the left side of the application. Once the add token button is pressed a chain of requirements is started.

Step 1: Create the token

The creation of token includes different specification steps to classify the type of token as well as its unique identifier and supply.

The following details have to be provided:

  • Logo: The logo can be uploaded in the form of a .jpg, .jpeg or .png file and can have a maximum file size of 50 KB.

  • Token name: The token name has to have a min. of 1 and a max. of 20 characters

  • Token symbol: The token symbol has to have a min. of 1 and a max. of 4 characters that may only be from the alphabet

  • Background: The background can be uploaded in the form of a .jpg, .jpeg or .png file and can have a maximum file size of 3 MB.

The above mention details are essential to provide each token with unique identifiers while the below mentioned details will give an overview of how many assets are available to be used in the Chintai application in the future once the creation process is finalized and approved.

  • Maximum Supply: The maximum supply has be a min. of 1 and a max. of 1 quadrillion (10^24)

  • Decimals: The decimals have to have a min. of 0 and a max. of 8

After providing a short description of the token you can continue on with the token creation process.

The assets supported by the Chintai website are listed in the following overview :

Asset Class

Subclass

Example

Real life funds

Fixed Income

Corporate Bonds

A company issues a bond with a $100.000 face value and an interest of 5%. The bondholder would be paid a $5.000 annually per bond owned until the bond matures.

Government Bonds

The federal Republic of Germany issues a bond with a EUR 100.000 face value and an interest of 1,5%. The bondholder would be paid a EUR 1.500 annually per bond owned until the bond matures.

Corporate Debenture

A private company issues a debenture with a $50.000 face value and an interest of 7%. The debenture holder would be paid a $3.500 annually per bond owned until the debenture matures. But since it is a debenture the investor has to rely on the company’s ability to fulfill its debt obligation since there is no backing by collateral.

Equities

Common

If a company has a 1.000.000 outstanding common shares with a dividend yield of 2%, the number of shares represents the total ownership units held by common shareholders. Said shareholders would be paid an annual dividend of equal to 2% of the current market price per share. These shareholders are also considered residual owners.

Preferred

If a company has a 1.000.000 outstanding preferred shares with a dividend rate of 5%, the number of shares represents the total ownership units held by preferred shareholders. Said shareholders would be paid an annual dividend of equal to 5% of the current market price per share. The preference in dividends is cumulative, meaning that if the company misses dividend payments, preferred shareholders will be paid first to make up for those payments.

ETF

An ETF holds a diversified portfolio of assets. Lets say there is an ETF on the market place with a basket of technology-related stocks with an expense ratio of 0,25%, a market price of $150 and the number of holdings is 30. That means the ETF holds 30 individual stocks within the technology sector and the investors will incur an annual fee of 0,25% of their investment. The market price reflects the collective value of the underlying holdings.

ETX

Carbon Credits

Green Carbon

Green carbon credits are typically associated with projects and initiatives that contribute to environmental sustainability and similar goals.

Therefore the common type of carbon credit is a Renewable Energy Certificate (REC).

An issuer with a Wind Farm Expansion project can sell RECs that are equivalent to the generation of one megawatt-hour of renewable energy. The project is expected to reduce or offset 10,000 metric tons of carbon dioxide (CO2) emissions annually, which is verified and quantified according to environmental standards by recognized environmental standard or certification body.

These can be bought to offset ones own carbon footprint.

Blue Carbon

Blue carbon credits are typically associated with projects and initiatives that preserve and restore costal and marine ecosystems.

An issuer with a Mangrove Protection and Restoration Initiative can sell credits that represent the carbon sequestration and storage achieved by the mangrove ecosystem. The project is expected to sequester 5,000 metric tons of carbon dioxide (CO2) annually, verified and certified under the Blue Carbon Standard, an established set of criteria for ensuring the environmental integrity and quality of blue carbon projects.

These can be bought to offset ones own carbon emission and support activities that enhance both environmental and climate resilience.

Brown Carbon

Decarbonization of sectors like steel?

Real Estate

REITs

REITs (Real Estate Investment Trusts) are investment tools that own, operate, or finance income-generating real estate across various sectors.

A REIT with the focus on Commercial Real Estate that holds 20 properties nationwide and is externally managed, can be invested in. It has a Dividend yield of 4.5 %, meaning the investors are being paid 4.5 % relative to the REIT’s shares current market price annually.

Investors would have an ownership stake in the REIT, and in return, they would receive dividends from the rental income generated by the office buildings owned by the trust.

Residential

There are multiple forms of investing in residential real estate such as : purchasing individual properties, investing in residential real estate funds, or participating in real estate crowdfunding platforms.

An Urban dwellings fund with the focus on Residential Properties in Urban Centers and a fund size of $100 million that has a portfolio of 50 apartment buildings and townhouses is put up for investing by its fund manager. Investors in the Urban Dwellings Fund would contribute capital to the fund, and in return, they would receive a share of the fund's returns based on its performance. This would allow exposure to a diversified portfolio of residential properties without having to directly manage or own the properties themselves.

Commercial

Commercial Real Estate involves properties used for business purposes, such as office buildings, retail spaces, industrial facilities.

On an online platform facilitates a crowdfunding investment. The project is a Retail Plaza Development with a funding goal of $1.5 million and an investment minimum of $1,000 per investor. The anticipated annual return is 8%, along with the potential for additional profits if the property is sold. The expected duration of the investment, including the development phase and the period during which the property is held before potential sale is 3 years.

Land

Investing in land can take various forms, and the potential returns can come from factors such as property appreciation, development, or agricultural use.

The land that is being sold is an undeveloped greenfield in a suburban area with a size of 20 acres and purchase prize of $500,000. The expected holding period of the investment is long-term.

The potential returns may come in form of :

  • Appreciation: The value may increase over time due to different factors such as changes in the local real estate market and many more.

  • Development: The investor may choose to develop the land for different purposes, generating returns through the sale or leasing of developed properties.

  • Agricultural Use: Some investors may use the land for agricultural purposes, generating income through farming activities.

Air Rights

The legal rights to use or control the space above a property.

An Air Rights owner sells air rights of an existing office building in the city center of a metropolitan city that can be used to vertically build above said property. The purchase price of the Air Rights are $10 million.

Alternatives

Hedge Funds

Hedge Funds pool capital from accredited individuals or institutional investors and employ various strategies to generate returns.

A fund manager sets up a fund with a fund size of $500 million and a performance fee of 20% of profits above a high-water mark and a lock-up period of 1 year to capitalize on macroeconomic trends across global markets. The leverage of the fund is allowed up to 2x. This means that the fund has the ability to use a leverage up to two times the the fund's net asset value, borrowing capital to amplify its investment positions. Investors are charged a 20 % performance fee on profits generated and may only be able to redeem their investment after the lock-up period is over.

Venture Capital

Venture capital (VC) involves investing in early-stage, high-potential startups in exchange for equity.

A VC firm and its investors are responsible for the VC investment of a tech Start-up. They have committed an investment of $10 million in Stage A, the beginning stage of investment, to support the Start-up and thereby acquired 20% ownership for.

PE Funds

Private equity (PE) involves investing in private companies with the goal of generating returns through various strategies.

A PE firm and its investors are investing in a tech company that focuses on software development. They re investing $50 million in majority stakes for an investment horizon of 5-7 years.

By investing in majority stakes the PE firm is acquiring a significant ownership stake and are planning to have an expected duration of 5-7 years in which they help with the tech companies growth and generate returns.

Because of the longer investment horizon, investors in PE commit capital for an extended period and therefore returns are realized over time.

SPV

Special Purpose Vehicle (SPV) is a legal entity created for a specific and often temporary purpose. Investors in this asset are mostly institutional investors.

A bank originates residential mortgages to be securitized. The SPV issues mortgage-backed securities backed by the cash flows from the underlying residential mortgage loans.

Therefor the SPV acts as an intermediary that distributes the cash flows from the loans to the investors by holding the assets.

SPV helps isolate the securitized assets and associated risks from the balance sheet of the bank.

Step 2: Due Diligence

There are two different paths of performing due diligence, depending on if the company has a prospectus registered with MAS or not, because of special exemption reasons.

Either way the company has to provide a number of documents regarding the token they want to list in order for Chintai to check the validity of said asset and approve it for further trade.

If you answer the question of having a prospectus registered with MAS, the Monetary Authority of Singapore you are required to upload said document. A prospectus being a formal document that is required by and filed with the Supervising Authority that provides details about an investment offering to the public such as the company’s business, financial statements, material information and so forth.

In order to find out more about the Prospectus guidelines visit the following website : https://www.mas.gov.sg/regulation/guidelines/guidelines-on-good-drafting-practices-for-prospectuses.

If you do not have a prospectus registered with MAS you will first have to select the reason for a prospectus exemption.

  • Small Offers: Since for SMEs (small and medium-sized enterprises) it would be very expensive if they were to comply with the prospectus the establishment of small offers exemption intends to make fundraising easier. To limit the influence of the offers made they are limited to a total amount raised of $5 million or less in any 12-month period

  • Private Placement: Same as with the Small offers, the Private Placement exemption was set in place to help primarily SMEs with fundraising. The limitation in this case is, that the offers may not be made to more then 50 persons in 12 months.

  • Offers targeted at institutional investors: These offers may only be made it they comply to certain conditions as prescribed by the Authority.

  • Offers targeted at accredited investors : These offers may only be made it they comply to certain conditions as prescribed by the Authority.

  • Issuance of Collective Investment Schemes (CIS) offered to qualified investors where the underlying consists of real estate development projects and/or properties : The properties that are to be considered for such an CIS must fulfill the following requirements:

    • Participants have no day-to-day control over management of the property

    • Either or both characteristics are present:

      • Property is managed as a whole by or on behalf of the manager

      • Participants’ contributions are pooled, and profits/income from which payments are to be made are pooled

    • (Purported) purpose or effect of the arrangement is to enable participants to participate in or receive profits/income arising from the property

Independent of whether you have a prospectus registered with the MAS or not you will be asked to provide all the relevant documents in order to perform Due Diligence. These documents should contain something like financial statements and so forth.

Step 3: Confirmation

Lastly you will be provided with an overview of the information you have given in the previous steps. Once you press confirm, the information will be passed on to the Chintai compliance team and examined for approval. They may reach out to you as soon as possible via Email and ask you to provide missing details or make some changes if required.

Once they are satisfied, the asset will be approved and you can get started with the Token Issuance process.

There is no limit to the number of tokens a company can create but they have to be approved for usage.

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