So I just read this INX Prospectus which is long and boring but I’ll say very approachable for a cretin such as myself....

First point I think this whole process is very cool.

Thread, gonna number this one.

1. First off background I couldn’t be more apathetic and give less fucks about this BTC and ETH flameware going on around it and this thread has nothing to do with any of those people. I do trade a LOT of crypto and know exchanges quite well, as a user and from the inside

2. High level of the offering is selling off up to 40% of the net cash flow of two exchanges an STO one and a reg Shitcoin one it plans to build / building unclear where that is at honestly in the whole doc. Have to raise 5mm or they say game over.

3. The company is running at a loss, losing a little over 4mm in 18 again though the exchange doesn’t exist currently so not surprising its a loss, these expenses are going to grow considerably post the token raise, salaries of some execs reset higher post raise as well

4. Additionally the token may not be enough, “Furthermore, we believe that regardless of the funds from this offering, we may need additional funding to finance our operations beyond the coming 12 months, until positive cash flows from operations is achieved”

5. Token payments will be made quarterly or annually depending on what a bunch of old dudes on the board decide so probably annually after they throw a couple quarterly ones at ya to keep it spicy, but it’s their discretion

6. Token gives discount on fees
and can be used to pay fees only on securities platform not shitcoin exchange. And they reserve the right to change this later though I’d be suprised if they do.

7. The token as far as I interpreted is not going to make it to the real liquidity venues Binance / Okex / Huobi because the tokens need to be transferred through some black magic kyc / aml token registry so that seems incompatible with the free and open exchanges

8. So that’s the token but what you’re really buying is this cash flow of the exchange, there is almost nothing at all in these docs provided about how this exchange will be competitive. All I see is references to being hyper compliant and regulatory focused.

9. This likely means no leverage out of the gate, very small pool of assets that are the least risky for potentially being securities on the crypto side, and then whatever STOs exist for their security exchange once this is built

10. Additionally exchange margins are coming down and exchanges are turning to newer and more regulatory grey business lines, IEOs / Staking to actually becomes profitable this would put INX in a bad spot since they will never be able to push that boundary and remain slow

11. Is a heavy compliance exchange enough of a value add to stand on its own two feet, we have this already you could argue it’s called CME / Bakkt / Gemini. bakkt is struggling and Gemini is dwarfed by the offshore venues. CME only one that stands strong and it has leverage

12. I think the crypto trading consumer has shown their risk tolerance for regulatory niceness of their preferred trading venues is sky high and frankly never comes in their thoughts. For people that do worry there they have Coinbase and Gemini.

13. What does that mean about the token who knows crypto is mania now it might pull a tzero and liftoff anyway cause it’s got the right beta to the right industry at the right time with money awash in the world.

14. I am just highly skeptical any real divs hit this thing unless the exchange is the second coming of Christ and right now there’s little to guess on, the prospectus is all about a token for an exchange we know nothing about

15. And finally remember these tokens don’t exist in a vaccum we have OKB/HT/BNB/FTT all iterating on this concept but less regulatory scrutiny, it’s unclear why that hurts price though.