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Blockstack, a blockchain startup that conducted the first-ever SEC-approved token sale, has revealed a deal with GSR Markets, a Hong Kong limited company, for the trading of its stacks (STX) token in a new filing with the SEC.
The company will be paying GSR for providing liquidity in overseas markets. According to the filing, Blockstack has entered into a liquidity consulting agreement with GSR, pursuant to which “GSR will provide services related to increasing the liquidity of the Stacks Token with respect to markets serving non-U.S. persons.”
As per the details, Blockstack will pay $100,000 to GSR as a setup fee, and $20,000 per month for the first six months as a retainer fee for GSR’s provision of an analysis of the Stacks Tokens’ liquidity. It will also provide GSR with a loan of bitcoin or ether in an amount equalling $1,000,000 to fund the trading.
Upon the termination of the agreement, GSR will be required to return the full debt amount in either bitcoin or ether with zero percent interest.
“One half of the repayment will simply be equal to one half of the amount of bitcoin or ether originally provided to GSR; the other half of the repayment will be equal in value to one half of the bitcoin or ether provided to GSR, with that value denominated in Stacks Tokens,” the document read.
Citing another agreement, CoinDesk reported that GSR will use its proprietary trading bot for trading STX, provide daily reports on the STX market activity to Blockstack, use “commercially reasonable efforts” to open up new markets for Stacks.
CoinDesk noted that being quite controversial, such deals between token issuers and trading firms are not talked about publicly. Blockstack seems to be changing that.
“We want the market maker to be an independent player,” Blockstack CEO Muneeb Ali told the news portal. “GSR has full discretion on how they operate and Blockstack PBC has no profit-sharing with them. We decided to work with GSR because their focus on compliance and ensuring high quality aligns well with us.”
The company raised $23 million in its SEC-qualified token sale to retail investors and a strategic investment round in Asia led by Hashkey and SNZ. It recently announced the listing of STX on Binance and HashKey.
“GSR will provide services related to managing the liquidity of the Stacks Token on these two exchanges as well as providing OTC services in markets serving non-U.S. persons,” Blockstack said in an online post.
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