BEE4, equity token platform, is another step in capital market redesign

In about 30 days, the Brazilian capital market will take another step in one of the biggest redesigns in its history, with the kick-off of BEE4, a platform for equity tokens for small and medium-sized companies. The startup is now doing “exhaustive” testing, startup CEO Patricia Stille told Blocknews. The first operation will be the tokenization and sale on the secondary market of most of the BRL 4.2 million shares that the human reproduction clinic Engravida sold in 2021. This primary sale, to raise funds, took place on the Beegin crowdfunding platform, which is a partner at BEE4.

At the beginning, this organized counter, that is, which trades what is not on B3, will work on Wednesdays. “When people think of the market, they want to see the negotiation game. But if at the beginning we leave it open every day, operations are kept away. Therefore, as with the start of trading in Treasury bonds, those of BEE4 will be on Wednesdays from 12:00 to 20:00”, explained the CEO of BEE4. However, it will be possible to place orders from 10 am, to help compose the opening price formation of the trading session.

The strategy is to build liquidity in the secondary market, so the prices of tokens will be relatively low, around R$100. The expectation is that in 12 months investors will invest an average of R$2,500 and that there will be more than 5 thousand registered. Each token will be equivalent to one action. And there will be a pre-defined control of price volatility, says Marcelo Miranda, CEO of Finchain Digital Assets, the infrastructure provider. There will also be mechanisms to make the market spin, which the company does not disclose.

The focus is on companies that earn from R$10 million to R$300 million, therefore, those that do not have access to the B3 stock exchange, which operates with large companies. The token sale process will begin at Beegin, with the sale of shares. Then there is tokenization and secondary selling on BEE4, using the Quorum blockchain. The plan is that in the future, only what will be tokenized in the new OTC market will enter Beegin. And sold at more affordable prices, because the idea is to open a new way of raising funds for small and medium-sized companies and attract new investors to this segment.

BEE4 includes redesign of Beegin, from crowdfunding

The choice of Engravida to be the first operation was a request from the CVM, for the token offering to start with a company that has already gone through crowdfunding. “In the beginning we should make emissions a little lower and we will increase over time”, added Patrícia.

In 12 months, BEE4 will be able to make up to 10 issues. In general, Beegin’s crowdfunding issues are 10% to 15% stake in companies. But there is no rule, it depends on what each company needs, says Patrícia. In value, issues of up to R$100 million may be issued. But the ones smaller than the range of R$ 15 million are not economically worthwhile for the platform. Beegin could issue up to BRL 15 million in startups with revenues of up to BRL 40 million.

Marcelo Miranda, who has been in crypto since 2013. Photo: Finchain.

Last week, this capital market redesign began with the launch of Vórtx QR Tokenizadora, an over-the-counter market for fixed-income securities tokens. The company and BEE4 are two of the four projects approved in the sandbox of the Securities and Exchange Commission (CVM) at the end of 2021. The two, as well as the SMU and Bolsa OTC platforms – this one from the Central Bank sandbox –, are part of a strategy to better reflect the funding needs of companies of different sectors and sizes. And they may be options in a more fearful credit market like the current one.

To participate in BEE4, Beegin was also remodeled, with new attributions and commitments with the CVM. And in addition to her, which is from Solum and of which Patrícia is a co-founder – after going through XP – and from Finchain, CIP is part of the new platform. This is a payment banking technology provider and will settle the assets. Through it, there are therefore 34 banks indirectly in the project, since they are partners in the company.

Blockchain to ensure service doesn’t stop

The BEE4 idea started with Solum and then the partners arrived. Blockchain was part of the project from the beginning. “We hope that the process is auditable, immutable, that there is confidence that no one will enter the network and erase information. Also, you need to be available at all times. When you think about the possibility of having a secondary market with this confidence, it is natural to go to this side of blockchain technology”, Marcelo Miranda told Blocknews.

Blockchain operation on BEE4 will start with the tokenization of the first issue of shares and the recording of transactions on the platform. In this way, it will allow the network nodes to verify the data at any time, which gives transparency to the operation. “Once the transactions are carried out, the settlement, which is in D+1, goes to the blockchain, which can easily handle the volume of transactions”.

According to Miranda, the idea is not to replace everything that already exists. Even because, not everyone knows the technology and would have confidence in an over-the-counter market with blockchain. The bookkeeper, the one who records the issues in electronic books, continues to exist, for example. This will have a validating role and bring robustness to the project, controlling the ownership of shares, says Patrícia. Custody, on the other hand, “dies”.

Patricia Stille claims that Beegin received permission from the CVM to operate as an intermediary. But this could be temporary, because the intention is to bring other brokers into the business to be an affordable solution for investors. But at BEE4 alone there are 35 people working.

Project uses Quorum blockchain that JP Morgan created

The option for Quorum is due to factors such as the fact that it was born with a focus on the financial market, being permissioned, but open source. Thus, there are developers, practically the same as Ethereum, working on innovations and trying to fix problems such as slowness, which can affect the public. Who created the solution was the bank JP Morgan, which later passed the tool to Consensys, one of the largest specialists in Ethereum in the world.

According to Miranda, the technology for trading is still offchain and can handle thousands of transactions per minute. “Once the transactions are carried out, the settlement, which is in D+1, goes to the blockchain, which can easily handle the volume of transactions”.

Quorum is asking for at least three nodes and BEE4 is simulating the architecture of the network nodes. The network maintainer is the startup at first. However, the idea is that other participants, as they enter the network, are also nodes. “Companies are settling into infrastructure. It is an internship in preparation”, said Patricia. In addition to BEE4, one node must be the CIP and the other a structurer, at the beginning. The CVM may be another, as well as the participants who enter the project.

Due to the novelty of the platform, Patricia Stille says it is difficult to pinpoint who will be BEE4’s investor users. “We attract B3 investors looking at other sectors and a new asset class”. This is one of the profiles. For Marcelo Miranda, the options on BEE4 are an alternative for those who already invest in crowdfunding and are now excited about the liquidity of the tokens. And it can also be attractive to those who invest in crypto and like alternative assets and blockchain technology.