💱Secondary Market

Curious about how to trade your start-up shares? We have got you covered!

Q1: Where can I trade my shares?

As you have control over your tokenized shares, you can trade them however you want. On top for each IPO a liquidity pool is created on Camelot.

Q2: Is there a trading venue, where I can trade my shares?

Yes, we have a partnership with Camelot, a decentralized exchange on Arbitrum. For every start-up there is an liquidity pool, where you can trade your shares.

Q3: What is Camelot?

Camelot is a trading venue for tokens, which is using the Arbitrum blockchain. Camelot uses liquidity pools to make tokens tradable.

Q4: When can I trade my shares on Camelot?

As the secondary market is completely permissionless, you can trade your shares whenever you want.

Q5: How can I access Camelot?

You can access Camelot via their website (https://camelot.exchange/). To use Camelot you need to connect your wallet on their website.

Q6: What do I need to trade on Camelot?

You need two things:

A wallet & a little bit of Ether (worth some dollars). You need the Ether to pay transaction fees. If you have neither a wallet nor Ether don't worry: if you are an ordinary internet user it's super easy, everyone can do it (and also learn about technology).

If you want to buy start-up shares you need USDC.

If you want to sell start-up shares you need the start-up shares.

Q7: How much does it cost to trade on Camelot?

To trade your tokens, you need to pay a transaction fee, which is around 1%. In addition, you need to pay the so-called gas fee to use the infrastructure, which is typically quite low. The majority of the fees are received by liquidity providers.

Q8: What is a liquidity pool?

A liquidity pool enables users to constantly trade their start-up shares. It acts as a counterparty if a seller wants to sell his start-up shares, or if a user wants to buy start-up shares.

Q9: Who controls the liquidity pool?

According to our design principles, we want to have a secondary market as permissionless as possible. The liquidity pool is entirely controlled by smart contracts, and fully permissionless.

Q10: Who provides the seed liquidity?

The start-up provides the initial liquidity into the liquidity pool. After the creation of the shares the liquidity pool is seeded.

Q11: How much liquidity is seeded in the pool?

The portion of the sales proceeds put into the liquidity pool is communicated before each raise. Usually, 12.5% of the funds raised are put into the liquidity pool, and an equivalent amount of start-up shares (cf. Tokenomics).

Q12: How do you ensure that there is liquidity in the pool?

The seed liquidity provided by the start-up is locked. The locking duration is communicated before each IPO and typically is 4 years.

Q13: What is a liquidity provider?

A liquidity provider contributes funds to the liquidity pool. A liquidity provider always needs to contribute start-up shares and USDC into the pool. Everyone can become a liquidity provider. However, if you are not familiar with the concept of impermanent loss, slippage etc., we would recommend you first become familiar with these concepts, before providing liquidity.

Q14: What is in it for me if I become a liquidity provider?

Liquidity Providers earn a portion of the fees, which users need to pay to trade. In addition, each start-up has an incentive program.

Q15: Do I receive dividends if I become a liquidity provider?

No. Only people registered in the share book of the company can earn a dividend. LPs cannot register into the share book.

Before each dividend payment users are informed about this process and hence can withdraw their liquidity. In addition, dividend payments are rare in start-up investments.

Q16: Do I receive the payment price in case of an exit?

Yes. You are the shareholder of the shares in the liquidity pool, and hence benefit from the purchase price.

Q17: How do you prevent insider trading?

Insiders (the team, and existing investors), don't own any tokenized share. In addition, we make sure in contracts that they cannot buy them.

Because of the due diligence process, Arcton is an insider at the time of the IPO. We believe in the start-ups we offer on our platform and hence regularly participate in the IPOs on our own. After the IPO Arcton does not possess any confidential information, and its co-founders are simple investors in the start-ups offered on our platform. Should we in any way obtain any preferential information (e.g. the company wants to do another raise), we will not be active in the secondary market.