PIPE Instrument

A financial instrument that helps Foundation raise capital through a more flexible option and offered at a discount among selected private investors.

Use Case Description

The system will allow makers to create new Private Investment in Public Equity (aka. PIPE) issuances, and allow takers to engage existing PIPE issuance.

Actors

• Maker, who is the asset seller of the PIPE. Usually the Foundation who wants financing from the token assets;

• Taker, who is the asset purchaser of the PIPE. Usually the token investor;

• Timer Oracle, who is an external timer service provider that provides timing triggers to NUTS technology platform.

Precondition

• Financial Service Providers have created the PIPE instruments using the NUTS protocol;

Process Flow

Main Process Flow

• Maker creates new issuance of PIPE instrument;

• Maker deposits the issued token to the PIPE issuance;

• Taker engages the PIPE issuance;

• Taker deposits the fundraised token to the PIPE issuance. The fundraised token is available for withdrawal by maker;

• When the release date arrives, the issued token is available for withdrawal by the taker.

Alternative Process Flow

• If maker fails to deposit the issued token in time, the issuance becomes unfunded;

• If taker fails to deposit the fundraised token in time, the issuance becomes delinquent;

• If there is no engagement in time, the issuance completes with no engagement.

Issuance States

Below are the possible states of a PIPE contract:

• Initiated: The PIPE issuance is created;

• Engageable: The maker deposits the issued token;

• Active: The taker engages the PIPE issuance;

• Complete Engaged: The release date arrived with fundraised token deposited;

• Unfunded: The maker fails to deposit the issued token in time;

• Complete not Engaged: No taker engages in time;

• Delinquent: The taker fails to deposit fundraised token in time.