UPDATE: According to reports, the NBA on Friday told the Nets’ Spencer Dinwiddie that he cannot use his contract as a digital investment vehicle, this comes from a league official.
NBA athlete, entrepreneur, and philanthropist Spencer Dinwiddie today announced DREAM Fan Shares, a new Ethereum-powered investment platform for supporters and fans who want to invest in the potential success of athletes and stars.
DREAM Fan Shares, launching this fall, will enable athletes, artists, and influencers to gain more control over their own financial futures by providing them with earlier access to capital.
Dinwiddie will pilot the blockchain-based DREAM Fan Shares platform with issuing the first ‘PAInT’ token. He will launch his token through SD8 LLC, a company Spencer formed for this purpose. The sale of the US dollar-denominated debt securities represented by his ‘SD8’ token will begin on October 14, 2019. Investment will be open to qualified accredited investors, with a minimum purchase of $150,000.
Dinwiddie said, “I’m creating DREAM Fan Shares to solve a need that teammates, friends, and I experience. We need more flexibility and ownership over the value we bring to the league. This empowers us to make stronger and smarter financial choices. Through DREAM Fan Shares, we can create terms that work better for us, while also giving supporters the chance to invest in our futures and share in our successes. It’s a win-win situation.”
DREAM Fan Shares will work with athletes and entertainers to create their own PAInTs, each token representing an interest in a debt instrument. Token holders are contracted to receive regular periodic payments of principal and interest. Holders may also be entitled to special premiums based upon the financial success of the athlete or entertainer. The terms of every PAInT offering will differ.
The SD8 tokenized security will be backed by Dinwiddie’s three-year guaranteed employment contract with the Brooklyn Nets. It is anticipated that investment will open on DREAMFanShares.com starting October 14, 2019; and the first monthly payments to investors are expected to be distributed December 3, 2019. Level (i.e., “mortgage style”) payments of principal and interest are scheduled to be made to investors holding PAInTs on a monthly basis. SD8 token holders may receive special premiums based upon Dinwiddie’s bonuses.
SD8 LLC is issuing these securities under the Securities and Exchange Commission’s Regulation D Rule 506(c) exemption from registration under the Securities Act of 1933. The offering is available only to verified accredited investors who are qualified to invest.
In the long-term, DREAM Fan Shares intends to support numerous tokenization structures. Future offerings on DREAM Fan Shares may have the flexibility to be issued under various exemptions from registration. Some financings, like this first one from SD8 LLC, may use Reg D; while in the future others may use Reg A+ or Reg CF to allow non-accredited investors to participate. DREAM Fan Shares will provide an easy-to-use interface for both issuers and investors to track their investment holdings.
Dinwiddie continued, “Turning cash flows from contracts of professional athletes into securities is now possible through the power of blockchain. I’m excited to pioneer this exploration of how the sports and entertainment world can take advantage of the benefits of this emerging technology. My hope is that SD8 will provide a successful blueprint for others to follow and build upon.”
To facilitate the token offering, Paxos Trust Company will provide custody and escrow services, ensuring that the correct payments are distributed to registered token holders. To disburse monthly repayments to investors — while also insulating them from the volatility typically associated with payments made via cryptocurrencies — payouts will be distributed on the Paxos platform via the dollar-denominated Paxos Standard (PAX) stablecoin tokens.