BrickBlock (BBK) (founded 2017) is a new blockchain-based solution for investing in exchange-traded funds (ETFs), real estate funds (REFs), passive coin-traded funds (CTFs), and active coin managed funds (CMFs).
Due to its effective use of smart contracts, order and issuing fees can be reduced to a fraction of traditional costs.
It provides a full suite SaaS solution that can be used to set up, raise, and manage an alternative investment fund.
BrickBlock (BBK) was started in 2017 by Jakob Drzazga and Martin Mischke in Berlin, Germany.
The company’s ICO period started on May 9, 2020, until May 15, 2020. They raised 5 million Euros in funding from the fintech venture capital firm Finch Capital.
This bought the total sum of money raised to date approximately 11 million euros including ICO contributions and other private deals.
The company which mainly operates in Berlin, Germany has 25 full-time staff from 17 different nationalities.
They established a legal framework for tokenizing assets and allows Brickblock’s clients to connect legal contracts to their tokens. Its smart contracts were recently audited and approved by ConsenSys Diligence, a company at the forefront of the blockchain space.
Brickblock is the creator of ScalingFunds.com, the SaaS solution gives fund managers and GPs the opportunity to raise capital from LPs more efficiently and scale from local to global distribution. It also allows a more efficient fund administration and helps to reduce costs by up to 70%.
Brickblock reduces the time for clearing and settlement of trades in a secondary market from weeks to as short as minutes. It is a fast and global secondary market for fund shares raises the attractiveness of all alternative investment funds.
Their initial focus was originally on real estate funds, the technology is important to the investment class and can process Infrastructure, private equity, private debt, and hedge funds.
Brickblock is a trusted partner of Sanne Group and JTC Group totaling over €350bn assets under service and was one of the first to get a Security Information Sheet approved by BaFin, the financial regulatory authority for Germany.
How BBK Token works
The three tokens on the Brickblock ecosystem which are:
- Brickblock token (BBK)
- Access tokens (ACT)
- Proof-of-Asset tokens (PoA)
The Brickblock tokens (BBK) are utility tokens that can be activated to generate Access tokens (ACT) or deactivated and used to trade on exchanges. The BBK token will only be released during the contribution period in exchange for ETH and Bitcoin.
Activated tokens automatically generate Access tokens (ACT), which are used to pay for all Brickblock transaction fees. When activated, BBK mainly functions as fee credit fountains to provide access to Brickblock’s smart contract platform which is comparable to holding a software license.
Both BBK and ACT are ERC-20 compatible.
Brickblock tokens can be activated or deactivated with just a click. Activated BBK continues to generate ACT until they are deactivated (they are not burned).
If the Brickblock tokens are stored in a special smart contract, the Brickblock token holder will receive a certain amount of access tokens per week until the Brickblock tokens are withdrawn from the smart contract.
Access tokens are also used by broker-dealers and fund managers to pay the platform service fees.
Like all Ethereum ERC-20 tokens, BBK can be traded on exchanges. Deactivated tokens will not generate ACT, but can be traded.
How to Activate BBK tokens to earn Access Tokens (ACT)
First, it is important to install MetaMask and transfer the BBK to the MetaMask wallet or connect Ledger or Trezor hardware wallet. MetaMask is the only wallet with which one can currently activate BBK.
Open BrickBlock's BBK Manager
Connect the MetaMask account to the BBK Manager. Click ‘Connect’. In the BBK Manager, how many activated and deactivated tokens will be displayed.
If no token has been activated, the entire BBK balance in the MetaMask wallet will be displayed beside ‘deactivated BBK Tokens’.
The amount of BBK to be activated is entered in the ‘Activate BBK Tokens’ field, then click ‘Activate’. A pop-up will appear asking to confirm the first of two transactions.
Set the gas fee
A MetaMask pop-up will ask to confirm the transaction. In this step, set the gas fee limit. Click ‘EDIT’ in the ‘GAS FEE’ tab. Choose how much gas to pay from the three available options (the higher the payment, the faster the transaction is confirmed. Keep in mind that there is no need to pay the highest amount indicated; this is merely the limit and will likely never be charged).
Once the first transaction is complete, MetaMask will ask to confirm the second transaction, Set the gas fee again and click ‘CONFIRM’.
BBK tokens are activated
Once the second transaction is confirmed, the BBK tokens are activated in the BBK Manager.
The amount of ACT generated by the activated BBK will be seen in the right panel of the BBK Manager, generated ACT can be used to pay Brickblock’s fees.
Alternatively, it can also be sold for ETH to provide others with the ability to pay their fees with ACT. It’s a simple Ethereum transaction that will transact ACT and credit with ETH at a ratio of 1000 ACT:1 ETH.
To trade ACT for ETH, simply enter the number of ACT tokens and click ‘Sell’. The ETH will appear in the MetaMask wallet.
Who is BrickBlock For?
Brickblock will help out private investors diversify their portfolios beyond just cryptocurrencies and tokens, reducing the overall risks involved. In addition to this, they'll help:
- Significantly lower the price of investing in REFs, ETFs, CMFs, and CTFs by cutting out the middlemen and pooling the investment volume.
- Create steady returns in the form of dividends and coupons.
- Hedge the systemic risk of a heated market.
- Clarify fees, tracking errors, and liquidity.
- Minimize bureaucratic overhead and
- Empower all to invest directly in global funds in every market, regardless of where the funds is or where the investors live.
Brickblock will help out institutional investors, invest their funds in a diversified digital currency portfolio without them worrying about holding various wallets, and handling a multitude of exchange platforms.
- Real Estate Fund Managers
Normally, fund managers must pay huge provisions to banks in order to sell their funds to customers, which can only be done if the fund is large enough. For smaller funds, which are not able to pay for distribution, their only chance is to maintain all investor relationships by themselves.
This is a significant competitive disadvantage since the costs increase with time and cannot be spent increasing the rentability of the fund. Brickblock then enables immediate global distribution, reducing fund costs, increasing profitability, lowering fund managers’ workload, and overall, they level the playing field.
- Coin Managed Fund Manager
Coin-managed fund managers, whether professional or social can gain a platform for advertising their past performance and attract new investors. They can also freely set their management fee structure and have Brickblock as a legal and trustworthy entity whom they can contract. Brickblock is interested in productive professional relationships and will help fund managers establish the initial management structure.
The Brickblock team believes that by adding more people into the global economy and enabling them to invest their money whichever way they like, everyone will win: investors will be able to pay significantly lower fees, have many options to hedge volatility and risks that accompany the digital economy and bypass unfair local jurisdictions.
Also, trusted brokers/dealers and fund managers will have a new group of financiers, and underfinanced companies and industries will gain access to this new capital.
Current banks don't have the ability and the incentive to free themselves from the burden of the status quo, they lack vision. Any attempt to innovate would meet with disapproval from the board.
So it is up to the crypto-community to use the aspiring blockchain technology to eliminate the faults of the old economy and to develop tools that will make it easy, affordable, and safe to access these instruments reserved for the financial class.
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