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tZERO to Develop Smart Contract Token for Rare Metals Sale

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Private equity firm GSR Capital has tapped Overstock.com Inc.’s subsidiary tZERO Group Inc. to work on a smart contract token for a sale of cobalt.

This is according to a press release published on December 17.

tZERO and Hong Kong-based GRS Capital’s partnership is keen on developing an ecosystem in Asia for tokenized commodity purchase contracts that would bolster the supply chain process of rare metals. In addition, the parties are seeking to introduce a security token platform in the area, after fulfilling regulatory requirements.

The token will be utilized for a sale of cobalt, and is set to launch in 2019. The “first-of-its-kind cobalt offering” will be comprised of recurring tranches of electric vehicle battery-grade cobalt, with up to $200 million of the material to be made accessible for sale.

Patrick Byrne, the Overstock CEO and tZERO executive chairman, declared that “smart contract automation of these transactions will significantly reduce overall costs while effectively improving transparency in rare earth metals purchases.” However, in order to fulfill the project the companies are delaying an initially announced equity investment until the end of February, 2019.

In August, Overstock and tZERO inked term sheets with GRS Capital to invest up to $374.55 million in exchange for common equity in tZERO and common equity in Overstock.com. Aside from that, GSR Capital will purchase $30 million in tZERO Security Tokens from Overstock.

In a letter sent to GRS Capital stock holders on December 16, Overstock said that GRS Capital has signed a retainer agreement with tZERO that ensures the cobalt offering is not hindered by the extension of the GRS Capital investment.

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