How is silver “Tokenized”?
The term token is generally referring to a cryptographic string of numbers and letters that references particular data. For the LODE Project, the silver is tokenized through the creation, transfer, and storage of cryptographic data that use strings of numbers and letters to refer back to the values of the vaulted silver.
What are the two tokenized assets?
The LODE Project has two tokens, the LODE Token & the AGX Coin, whereby each represents a unique relationship or right of claim to investment grade, securely-vaulted, silver bullion.
The system works similar to a complex leasing arrangement, whereby individuals with physical investment grade silver can have it “LODED” into the system and subsequently tokenized. Those who don’t currently have silver can purchase silver directly through the community’s BULLION DEALER ALLIANCE, or a participating bullion dealer. The corresponding token is referred to as a LODE Token and is a digital representation of a weight of silver bullion contributed and delivered to the vaulted LODE Reserve by individuals seeking a contributor’s participation in the Lode Digital Silver Monetary System. As the monetary mass circulates, LODE Token holders will receive micro-payouts known as AGX Pay which will be delivered to the wallets of holders. As the monetary mass expands, the rate of these micro-payouts increases.
The second token, referred to as an AGX Coin, is a digital representation of one (1) gram weight and measure of the vaulted and verifiable investment grade (99.9%) silver bullion held in the LODE reserves. It is redeemable via merchants and bullion dealers globally.
How are LODE Tokens and AGX Coins created?
They are created from the monetary mass, the physical silver that has been securely vaulted and authenticated. The two tokens each have a unique relationship to this vaulted silver.
How does the LODE Token work?
After a secure registration process, new members can contribute investment-grade silver bullion (or gold equivalent) to the LODE Community vaults. When the silver bullion arrives at the vault it is certified as 99.9% pure, properly accounted, vaulted, insured and tokenized.
The creation and issuance of LODE Tokens occur in progressive phases, and at exchange rates determined by the appropriate LODE Service Provider. The LODE Token exchange rate will also rise within each of these phases over time as the community grows. (See bonded curve issuance model)
LODE Tokens are delivered to the contributor’s private wallet, leaving a verifiable and immutable receipt via the blockchain.
LODE Tokens will be controlled exclusively by their owners with encryption keys and can be liquidated as needed, and from anywhere with participating bullion merchant dealers for physical silver and gold bullion products. LODE Tokens may also be deposited with exchange operators and converted to other digital assets, or into fiat positions, or they may be exchanged for value with a LODE friendly merchant.
What are the use cases for LODE Tokens?
Silver Stackers (Individuals)
LODE Tokens provide an opportunity for individuals to put idle silver grams to work on the blockchain, track them and receive micro-payouts (AGX Pay). LODE Tokens maintain a unique relationship to the Silver-Monetary-Mass working in the LODE ecosystem.
A LODE Token is a speculator’s asset that has a unique relationship to silver. Users can purchase a LODE Token if they wish to lease physical silver into the system and speculate on a blockchain enabled silver-monetary-system. Users and/or fund managers of various assets can position LODE Tokens as a means to diversify their portfolios.
Precious Metals Dealers & Retailers can align with LODE and discover new customers by enabling their stores and websites to accept LODE Tokens for physical bullion products.
Public and private silver mining companies may deliver and exchange their silver into the LODE System. The silver will then be tokenized and made available to their industrial clients, employees, suppliers/merchants, vendors and any other number of groups or silver enthusiasts.
Stock / Paper Investors
LODE Token assets may present an additional opportunity for silver investors that have experience trading in ETFs, silver stocks and the Paper Silver market. LODE Token positions may afford an opportunity to invest in a new asset class that provides a platform for further diversification, new types of security instruments and lower administrative costs for trading, exchanging and transacting.
Bullion investors may exchange physical coins and bars for LODE Tokens and tap into its purchasing-power with LODE friendly payment gateways, merchants, and retailers seeking private and secure settlements. Additionally, LODE Tokens can be deposited with an exchange operator and converted into other digital assets. This allows bullion investors to seamlessly position themselves into the digital asset investment sector.
How does the AGX Coin work?
AGX Coins will provide the LODE Users with a high-speed, low-cost, private, and borderless method for global commerce. AGX Coins will only flow in and out of private wallets when enabled by the encryption keys of the AGX Coin owner.
AGX Coins may be exchanged or redeemed for investment grade bullion, through participating precious metals dealers (subject to the vendor’s terms and conditions), and through participating retailers via payment gateway service providers. (ie: visa, debit, POS, ATM). AGX coins may also be used for the direct purchase of goods and services at participating merchants who accept AGX Coins as payment.
Who are the best candidates for utilizing AGX Coins?
Everyone that is interested in participating in a “sound money” ecosystem.
What are the use cases for the AGX Coin?
Individuals ensure savings and protect purchasing-power by holding AGX Coins in their own private wallet, secure in knowing that each AGX Coin is tethered to a verifiable one (1) gram weight of reserved silver bullion, and confident that AGX Coins may be exchanged at any point, and from virtually anywhere, for physical silver and gold products with affiliated LODE bullion dealers.
Small business owners, manufacturers, professionals, and retailers can discover new customers by offering products and services within the LODE Marketplace and by accepting AGX Coins from other members seeking value. AGX Coins may allow a merchant to protect their purchasing-power from depreciating fiat currency, or to recover losses on idle inventory, or more easily afford business expenditures offered by other merchants aggressively seeking AGX Coins.
Fund managers of digital assets can position AGX Coin as a means to stabilize and diversify their portfolios, insulate profits, or hedge against volatility.
Industrial Users of silver may seek to buy, exchange, or earn AGX Coins as a means to further secure their hedging operations, or to secure future supplies of silver for industrial applications, or to speculate upon future silver prices.
Precious Metals Dealers & Retailers can align with LODE and discover new customers by enabling their stores and websites to accept AGX Coins for physical bullion products. Dealers can hold their AGX Coins balances and deploy them on future ‘street’ purchases (buybacks), or ‘call’ for silver bullion from the LODE Reserve at wholesale pricing.
Public and private silver mining companies may deliver silver into the LODE System and exchange their AGX Coins within the LODE Marketplace to enhance purchasing power with AGX friendly merchants or utilize their AGX Coins to compensate employees and/or vendors.
Paper Stock Investors
Investors in Silver Exchange Traded Funds (ETF’s) may discover that AGX Coin positions provide better security and flexibility than Silver Exchange Traded Funds, which require administration by various counterparties. Blockchain enabled AGX Coins are controlled exclusively by their owners with encryption keys, and can be liquidated at any time, from anywhere, for physical silver and gold bullion products, via affiliated LODE dealers and retailers*. AGX Coins can also be deposited with exchange operators and converted to other digital assets, or into fiat positions, or they may be exchanged for value with an AGX friendly merchant.
Silver bullion investors may exchange their physical coins and bars for AGX Coin and tap its purchasing-power among AGX friendly merchants and retailers seeking sound silver settlement. Additionally, AGX Coins can be deposited with an exchange operator and converted into other digital assets, allowing silver ‘stackers’ to seamlessly position into the digital silver space.
B2B(Barter) Exchange Operators
Operators may conduct reciprocal trading for AGX Coin by offering their member inventories (scrip, due bills, etc.) within the LODE Marketplace and provide their local members with new opportunities and new customers! When successful, exchange operators can exchange their AGX Coin balances for physical silver and other products. Also, the operators and/or their members will be enabled to “spend down” and profit with sound money!
How does the AGX Coin derive its value?
The value of the AGX Coin is derived from industry retail pricing metrics (ie. the cost of producing and vaulting the silver) found within the precious metals marketplace, combined with the added value and convenience of digital tokenization.
What is a rotation/cycle of the system?
The inflows from the initial sale of AGX coins into the marketplace will be utilized to purchase more silver bullion, which will then be used to secure and issue a second tranche of AGX Coins, again at a margin, which ensures the reserved silver bullion exceeds the number of new AGX Coins outstanding. Each of these issuances represents a cycle, or rotation, of the LODE system.
Can I redeem AGX Coin for physical silver?
Yes, via participating merchant dealers including Precious Metal Bullion dealers worldwide.
Can I buy physical silver with LODE Tokens and AGX Coins?
Yes, via participating merchant dealers including select Precious Metal Bullion dealers worldwide.
Can I sell my LODE Tokens?
Yes, you may sell your LODE Tokens at any time, either through an authorized exchange operator (subject to the operator’s terms and conditions), or to a private buyer, in which case certain fees may be avoided and/or certain other “forms” of payment may be negotiated and accepted through private agreement. LODE Token transfers will be enabled over a private, secure, autonomous, and immutable blockchain, with transmissions secured by encryption keys.
How do LODE Token holders receive micro-payouts?
Micro-payouts are paid out progressively. As the marginal silver increases in the vaults, LODE Token holders receive micro-payouts as the vaulted silver is put to work as money.
How are my LODE Tokens stored and secured?
Your LODE Tokens are currently held in a secure custody wallet provided by a qualified service provider. Your tokens are secured and insured in a method similar to vaulted silver.
What is the conversion rate of physical silver to LODE Tokens in each of the Phases?
Details on all of the Phases can be found here. The LODE Project is currently in Phase 3, and the conversion rate is 3.70 grams to secure one LODE Token.
How do I calculate the number of LODE Tokens I will receive for my contribution?
To calculate the number of LODE Tokens you will receive for your contribution, simply divide the number of grams you contributed by the designated exchange rate for the Phase in which you contributed. For example, if you contributed 100 ozs (3110 grams) in Phase 3, divide 3110 by 3.70 (the Phase 3 exchange rate) for a total of 840.54 LODE Tokens.
Another example: If you contributed 200 ozs (6220 grams) in Phase 2 ( Exchange rate of 1.85 ), divide 6220 grams by 1.85 for a total of 3362.16 LODE Tokens
What is a Bonded Curve?
A bonded curve is a fancy way of saying that the price of the token is linked with an algorithm to the number of tokens that have been minted. The LODE Project will use the N squared curve, meaning that if the number of tokens doubles, the price will quadruple.
More information on the Bonded Curve see the links below.
Table: Bonded Curve
Graph: Price Vs Minted
Can I sell my AGX Coins?
Yes, of course! AGX may be exchanged or sold in a variety of ways. The first of which will be with a LODE affiliated bullion dealer or retailer, who can deliver physical silver and gold bullion products at prevailing market rates for your AGX Coins. Additionally, AGX Coins may be deposited with an authorized exchange and sold or traded for other digital assets, or for fiat currency. Finally, AGX Coins may also be used to settle trade and commerce with participating merchants, many of which may offer discounts for AGX Coin settlement.
Where can I find the current rate of exchange between AGX Coin and the reserved silver bullion?
Each AGX Coin is anchored to one gram weight of reserved silver bullion in the vaults and then tethered to it cryptographically by blockchain architecture. The value of one gram weight of silver (i.e. one AGX Coin) will, in the future, be posted live on the LODE website in multiple fiat currencies to provide merchants and speculators with a baseline for price discovery when settling commerce. Merchants are free to price their products and services however they choose and are not subject to mandates or pricing schedules. All parties to AGX Coin settlements are expected to conduct themselves with integrity and honesty. The LODE Association is not a third-party to any transaction between members or users and cannot be held liable for transactions or transmissions between private parties.
What is AGXPay?
AGXPay is the system for distributing AGX Coin micro-payouts via a progressive blockchain protocol to LODE Token holders as the monetary mass expands.
Have questions? Take a look at the full list of step-by-step procedures provided for the LODE community.
If you still have questions, don't hesitate to reach out to the support team by clicking on the chat icon at the bottom right of your screen (see image below).
Alternatively, you can also email firstname.lastname@example.org with your full name, username, Lode ID and email you use for the members portal, providing a detailed explanation of the issue you are having and someone contact with you within a business day.