Agrobon and virtual assets
Speaking about virtual assets, it should be noted that the Agrobon project is based on the distributed ledger technology. It should also be noted that this technology is used for the tokenization of legal relations between buyers and sellers of agricultural products regulated by appropriate agreements as well as for recording events taking place within these legal relations in the distributed ledger of the Bitbon System.
Tokenization of legal relations means that in order to manage rights and obligations under a certain agreement a special identifier, a distributed ledger token is used, the accounting units of which allow their owners, the parties to this agreement, to keep records of their rights and obligations under this agreement as well as to assign them to other users of the Agrobon platform.
The important thing is that all legal relations between buyers and sellers, users of the Agrobon platform, are regulated by commercial agreements concluded between them, and distributed ledger token units are used to record such legal relations in the distributed ledger of the Bitbon System. In addition, some of the terms and conditions of the agreement can be technically controlled and executed through the use of specialized algorithms.
Therefore, the Agrobon platform offers a comprehensive solution for the tokenization of legal relations using metacontracts – tokenized assets being digitized agreements registered in a distributed ledger. The management of the rights and obligations of the parties under these metacontracts is carried out using distributed ledger token accounting units allowing automated monitoring and execution of the terms and conditions under such agreements as well as the registration of events in the distributed ledger of the Bitbon System.
Thus, if we consider tokenized assets of the Agrobon platform in terms of their correlation with such types of virtual assets as digital money or digital securities, it is obvious that they have completely different substantive and applied features.
As a form of funds, digital money inherits their main functions:
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A measure of value;
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A medium of exchange;
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A medium of payment;
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A store of wealth.
Metacontracts of the Agrobon platform being digital agreements with additional features related to the management of the rights and obligations of the parties do not fulfill the features of money, and therefore cannot be equated with it.
Referring to digital securities or so-called security tokens, and to assess whether the metacontract of the Agrobon platform fits into this category, it is worth considering the well-established practice of the US Securities and Exchange Commission, which applies the so-called Howey test for this purpose. It includes four key elements that must be met for a transaction to be a security:
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An investment of money.
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A common enterprise.
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A reasonable expectation of profit.
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Profit derived from the efforts of others.
At the heart of the Agrobon platform metacontracts are economic agreements for the supply of existing agricultural products or agreements for the registration of a pre-order for the supply of agricultural products of a future crop the subject of which does not meet the criteria of the Howey test. In addition, such agreements in their traditional form are widely used among farmers and are not equated with securities.
Furthermore, depending on the specifics of regional and/or national legislation in the field of e-commerce and the agricultural sector, the conclusion of agreements for the supply of existing agricultural products or agreements for pre-orders for the supply of agricultural products of a future crop through metacontracts on the Agrobon platform will be carried out taking into account the requirements of this legislation.