In today’s blockchain ecosystem, one of the most common ways to protect value or keep a cash position is to buy a stablecoin. A stablecoin is a blockchain based token that is tied to the value of another currency, commodity, or financial instrument. One of the big issues surrounding stablecoins is that they are not always stable.
- Stablecoins pegged to government issued fiat currencies (which describes virtually all stablecoins) do not appreciate in value
- Stablecoins have had the potential to de-peg from the currency or financial instrument that they are tied to (see Terra, USDC, etc.)
- Stablecoin reserves have failed in cases where these tokens were not truly backed one to one (or greater)
The team at infineo has recognized these hindrances and wanted to revolutionize the idea of a stable (sound) asset. To understand how infineo is accomplishing this, it is important to understand Whole Life Insurance, and how this financial product is often deployed as bank owned life insurance (BOLI) and corporate owned life insurance (COLI).
Whole Life insurance policies are cash value, yield-generating products that are contractually guaranteed to retain and increase in value. This has been successfully working for hundreds of years and have even performed well in times of Financial trouble such as the banking crises of 2008, the Great Depression, and more.
infineo is issuing $SOUND token, which is a securities compliant token that represents ownership in a pool of these Whole Life policies. Due to the nature of these policies, $SOUND token will be a more stable asset accessible backed by a blockchain.
$SOUND token also aims to be a highly liquid asset with opportunities for additional liquidity, while functioning as a “Capital Appreciation Token”.
The ability to hold a sound reserve asset on a balance sheet is a necessity right now. With the consistent returns, non-correlation with traditional markets, and the liquid nature of Whole Life insurance, a pool of these policies bundled as a security will be a strong alternative to treasuries or other assets currently occupying most of stablecoin balance sheets.
Additionally, Whole Life insurance with the design suitable for infinite banking is something only available in a handful of jurisdictions (most notably the US and Canada). $SOUND Token, representing a pool of these Whole Life insurance policies, can be an on ramp for international citizens who don’t have access to infinite banking. Through a Reg S exemption, $SOUND Tokens can be accessible to overseas investors, making it truly attainable and affordable globally.
The ability for investors to buy $SOUND tokens addresses one of the biggest issues with Whole Life insurance, namely the high cost associated with obtaining a policy oneself. $SOUND token will give investors the ability to put in fractions of that amount, and still have exposure to the large pool of assets being acquired.
Lastly, a huge benefit for token holders in addition to paying less than buying a whole policy and have no ongoing premium payments is that they do not qualify their health status. This is a requirement for most policies, and many do not qualify.
Disclaimer — This is not solicitation for investment or financial advice.
Comments