Topicus employees were offered the opportunity to invest in the security token, each representing the value of one euro. Topicus is the first major Dutch player to offer a token as a corporate bond. Michiel Schipper, Managing Director of the Finance Division at Topicus reveals: “Blockchain technology and cryptocurrencies intrigued us. But typical cryptocurrencies fluctuate significantly in value, mainly due to speculation and sentiment about vague underlying values. We wanted to look at a blockchain application without the speculative aspect and with real underlying value. Our token is issued on the Ethereum blockchain but that is not the end point of the investment. It represents a real loan to a physical company. The structure of the smart contract avoids the volatility of Bitcoin and Ethereum.”

New form of financing created for and by employees

A new start-up created the ideal test case for this new blockchain form of financing. Four IT specialists from Topicus developed the blockchain project with the associated security token within five months. The fact that the security token is not speculative contributed to the success. “It is a very accessible way to raise money. The way in which we have now set up the project means we can use it for future projects and new potential clients; the entire infrastructure and code can be reused. And most likely at much lower costs than if you were to tackle this in a 'non-blockchain way'. In addition, we have established, in close collaboration with the FinTech and finance specialists from law firm Van Doorne, a solid and reusable legal basis within the framework of the Financial Supervision Act”, explains Schipper.

Ethereum blockchain entices people to participate

The Ethereum blockchain is an existing infrastructure. This ensures the security tokens are mutually marketable. This means owners of a token can easily transfer them to other owners without the need for a separate platform. In addition, this infrastructure also brings transparency, which means owners can always see where their tokens are and how actively they are handled. Schipper explains: “In order to make the investment more appealing to employees, the return on investment is defined in a smart contract and the security token will not fluctuate. The contract also describes, for example, the mechanism in which employees can convert their tokens back to euros and how the return on investment is determined.”