Diamond Standard Coin

$25,000,000

INITIAL OFFERING

$5,000 per coin

(USD/ETH)

Diamonds to be purchased via transparent bidding and statistical sampling
Initial offering to determine the geological standard for all future coins
Offering Regulated, licensed and supervised by The Bermuda Monetary Authority
Subject to final approval
Internal audits by DELOITTE
Diamonds graded by the Gemological Institute of America

Initial Commodity and Asset Token Offering

The Diamond Standard Coin (the “Coin”) is a physical commodity composed of a statistically calibrated set of natural diamonds and a digital asset — a blockchain token used to transact it. Every Coin is mathematically engineered to have the same market value.

When you purchase this product, you first receive the token and within 28 days or less we will deliver the physical diamond commodity, the Coin. Your funds are held in escrow under regulatory supervision until the diamonds are selected via an automated market making process, delivered and independently inspected.

We will deliver your Diamond Standard Coin to your address in the US, or you can have it delivered to an approved US custodian, that holds it in your name. You can also choose to self-custody the token, or deliver the token to a digital custodian.

This Offering will establish the index — the geological content that must be contained in every Diamond Standard Coin, made now or in the future. This initial sample is the benchmark against which every subsequent Diamond Standard Coin sample will be publicly measured against.

The diamonds are purchased through a statistical sampling process, by automatically bidding on the inventory of many competitive diamond vendors, to purchase a statistically valid sample of approximately 50,000 round brilliant diamonds. This sample is out of a universe of around 400,000. That’s all the combinations of the primary diamond characteristics, such as carat weight, color, clarity, fluorescence, and make, between 0.23 carats to 0.75 carats. None of the diamond vendors has any relationship with Diamond Standard, and the bidding is transparent to all vendors.

The gemological details of every diamond acquired through this bidding process is made permanently public, then the diamonds are distributed fairly by an optimization system. The optimizer ensures that every Coin contains an equivalent share of gemological scarcity. Every Coin approximates the natural yield curve of the range of diamonds in the Earth’s crust.

All diamonds are purchased through the Diamond Standard Exchange. It uses automated market making and transparent bidding, to purchase from a large number of competitive diamond vendors — creating a consistent price discovery mechanism for all diamonds in the range. To manage the bidding and acquisition of diamonds, the Diamond Standard Exchange collects a 3.5% fee on the cost of the diamonds.

Value Guarantee: Each Coin in the Initial Offering will contain a set of GIA Graded natural diamonds, with at least a total market value greater than $4,825 ($5,000 - 3.5%) as reported in the most recent Rapaport Diamond Report before the date of the Offering. Diamond Standard has no affiliation with the Martin Rapaport companies, and the Rapaport price estimates are not utilized by Diamond Standard, it is a reference for buyers to consider at their option, requested by our regulator.

As an example, the $5,000 Diamond Standard Coin illustrated on our site, which contains GIA Graded diamonds acquired during a test run of our market making system, has a Rapaport wholesale value over $9,000 as of September 9, 2020.

Transparency: The contents and GIA grading report for every Coin are permanently public. Every future Diamond Standard Coin will contain an optimizer-selected allocation from a sample of diamonds that is statistically equivalent to the gemological distribution contained in this initial sample, and which was acquired through the same competitive price discovery process.

Therefore, every future Coin will contain the same gemological scarcity of natural diamonds as those Coins issued in the Initial Offering, regardless of the cost of the diamonds when the Coin is assembled. Coins are designed to always have the same gemological contact and equivalent value.

After the Initial Offering, the market value (or fix) of the Diamond Standard Coin will be set by buyers and sellers in the market through exchange trading—just like gold. Diamond Standard will sell new Coins at a small premium to the market-determined fix, and purchase new valid and public statistical samples of diamonds through the Diamond Standard Exchange. Coin owners may offer to sell their Coin at the market price through an exchange, or to any buyer at a mutually agreed price.

Because the token inside the Diamond Standard Coin is compliant with the ERC-20 token standard, the token can be listed and traded on a variety of cryptocurrency and digital asset exchanges. Diamond Standard will provide a list of venues on its website, when available. To trade your Diamond Standard Coin on an exchange, it must be held by an approved physical custodian.

How is this a commodity? The Diamond Standard Coin Offering is regulator supervised and internally audited by Deloitte. Every Coin is approximately geologically equivalent, and intended to trade on the market at the same price, just like a standardized gold coin. The commodity is physical, and the Coin always delivered to the owner or their custodian. You are not purchasing a share of a pool or a futures contract, you are purchasing a delivered commodity containing a set diamonds that is statistically similar to all other Coins.

How is this a token? Each Diamond Standard Coin contains the statistically calibrated selection of diamonds, and a wireless computer chip. This chip enables real time electronic auditing and instant authentication, and also stores a blockchain token—a BCC (Bitcarbon Coin). The key to this token, which is created upon purchase and known only to the owner or their custodian, is a receipt, for delivery on demand, of your specific Diamond Standard Coin.

If you sell your token, you have sold the ownership of your Coin. If you encumber the token, by taking a loan for example, you encumber the Coin, with a lien recorded on the public blockchain. The token owner can always take possession of their specific, unencumbered Coin by contacting their custodian. If the ownership has changed, the recipient will be subject to local KYC and AML requirements.

How is it made?

There is no stockpile of tokens. Every time it creates BCC tokens, Diamond Standard must purchase an audited, statistically valid sample of natural diamonds in the gemological range, using transparent bidding on the Diamond Standard Exchange. The detailed characteristics of every diamond, and the aggregate characteristics of every sample are always made public, for anyone to verify.

We bid on diamonds through an automated market-making process, to force the price discovery of the entire range of diamonds that are required for the sample, and then purchase a broad sample. Our optimizer, combining non-linear optimization and integer programming techniques, distributes the large sample of diamonds into fair sets, to be embedded into the Diamond Standard Coins. The optimizer has parameters that force the diamonds in every Coin to add up to a similar total carat weight, and visually similar distribution. So every Coin is beautiful and equivalent.

Inside an independent gemological lab, each Coins is analyzed by an enrollment station, that optically and electronically inspects the Coin and the diamonds. If all aspects of the Coin are verified, in one simultaneous moment, the Coin is optically imaged, the token is electronically burned into the chip, and the token is enrolled on the public blockchain. Tokens can only be minted through an enrollment station, upon the presentation of a Coin containing a valid set of diamonds, from a statistically valid sample acquired through transparent bidding.

Only once the Coin is received by the owner or their custodian, does the token becomes transactable. There is only ever one token per commodity, and the token itself is indivisible. No BCC tokens are issued to our founders, team, advisors or anyone else. Owners of Diamond Standard Coins always own 100% of the existing BCC tokens.

The BCC token supply is forever constrained by the supply of natural diamonds and our capacity to assemble them.

How do I use a BCC token?

Your BCC token and the Diamond Standard Coin are inseparable. The BCC is initially delivered as a fungible ERC-20 token, that you can store in any ERC-20 compatible wallet. The token is the receipt for your specific Diamond Standard Coin. To transact the BCC token, the physical commodity, the Diamond Standard Coin, must have been electronically and optically authenticated by an approved custodian—that’s called proof-of-asset, and be held by the custodian. The custodian guarantees that the Coin is deliverable.

Diamond Standard charges no fees for any transactions you make after the initial sale of the Coin. Custodians and exchanges will charge you fees for their services.

If you send your Diamond Standard Coin to an approved custodian, they use the Diamond Standard App to authenticate the Coin as a proof of receipt. Until custodian receipt, your Coin is insured by the carrier.

Your custodian can authenticate and then store the Coin in their vault, or optionally they will store your Coin inside a Diamond Standard smart cabinet. This smart cabinet audits and authenticates the Coin in real time. When your Coin is held by an approved custodian, that proof-of-asset enables you to use your key to transact your Coin, whether to sell it privately or on an exchange, to take a loan against your Coin, or to attach it to a smart contract.

Your physical custodian has no ability to falsify the audit or transact your Coin, unless they also possess the token key.

You can also entrust your token key to a digital custodian, different from your physical custodian, or store your token off-line for safe keeping.

If you don’t use a custodian, you can trade your Coin face-to-face, in which case the buyer and seller authenticate the Coin using their smartphones and the Diamond Standard App. The chip inside the Coin signs the blockchain transaction.

In-Hand Transactions: When you take possession of your Diamond Standard Coin, you cannot list it on an exchange, take out a loan, or attach the Coin to a smart contract. There’s no proof-of-asset for your counter-parties.

But you can still sell your Diamond Standard Coin to a buyer face-to-face. Buyer and seller use the Diamond Standard mobile app, anywhere in the world, to authenticate the Diamond Standard Coin and transact on the blockchain, at the market price or any agreed value. The app communicates with the Coin’s wireless computer chip, to transact the embedded token on the public blockchain. Your smartphones establish proof-of-asset. The app requires an optical authentication of the Coin, and both the buyer and seller must install the app, and connect it to a digital wallet containing ethereum tokens (or gas).

Future proof

The Diamond Standard Coin, BCC token, and proof-of-asset protocol is designed to be compatible with many blockchain platforms. If the Diamond Standard Coin is held by an approved custodian, and there is no blockchain recorded lien, the BCC token will soon be able to be moved (or hop) to a variety of public or private blockchains, and be attached to any smart contract on those platforms. There are never any fees to Diamond Standard for using this feature or the proof-of-asset protocol.

The BCC token and the Diamond Standard Coin together will form a universal asset, that will be portable across blockchains, and able to asset-back activities on those chains, with a market-traded, deliverable, physical commodity, with a common market value. All the Diamond Standard Coins and their Bitcarbon tokens form a decentralized reserve owned by everyone who owns a Coin.

KYC/AML

Purchasers do not need to be accredited investors, but must agree to the Terms of Sale agreement, and submit information for a KYC/AML review administered by Mazars, an international CPA firm, and be approved upon such review. Diamond Standard is internally audited by Deloitte, with regulatory oversight by the Bermuda Monetary Authority (final license pending).

The Diamond Standard technology and processes are designed to be regulatory- compliant, acceptable for institutional investors, and capable of supporting securities offerings, such as CFTC regulates futures and options, and SEC regulated ETF funds, and their global equivalents.

Delivery

Upon KYC/AML approval and payment (by USD or ETH), purchasers will receive their BCC ERC-20 token at the ethereum wallet address of their choice—their own, or their digital custodian's.

The BCC token is not transactable until the Diamond Standard Coin is delivered to the owner or their physical custodian.

For this Initial Asset Token Offering, the Diamond Standard Coin will only be delivered in the USA, although in the future, production and delivery will be offered in more countries. Purchasers may select delivery to a Diamond Standard approved custodian of their choice, or to their U.S. office or residence address. We do not deliver to P.O. Boxes, and if you use a credit or debit card, we only deliver to an approved custodian, or to the address provided by the financial institution that issued your card. Signature with positive identification is required, and other restrictions may be imposed by the carrier, which are beyond the control of Diamond Standard.

Shipping fees are below, and for deliveries to all US states where it is required, sales tax will be collected. For delivery to a Delaware custodian, there is no state sales tax.

If you use an approved custodian, the first year custodial fees will be collected with sale. Diamond Standard is never a custodian of a buyer's BCC tokens, and never has access to your keys.

Recovering Lost or Stolen Token BCC Token Keys

If you lose your BCC token key, as long as you have your physical Coin and ownership is not disputed, you can recover it. To recover a BCC token key, an independent gemological lab will simultaneously authenticate the Coin and destroy the token in the Diamond Standard enrollment station. Then they will dissolve the Coin and remove the diamonds, and reassemble the diamonds into a new Diamond Standard Coin. This Coin will be enrolled on the blockchain with a new BCC token, which refers to the diamonds provenance data of the original BCC token.

Diamond Standard cannot recover a token without the Coin being delivered to the independent gemological lab for authentication, destruction and recreation. We cannot simply reset your key or recover a password.

Fees

Token transaction fees: (Zero to Diamond Standard) After delivery of the token and Coin, Diamond Standard charges no fees to authenticate, buy, sell, exchange, trade, transfer, change blockchains, or attach your token to smart contracts. Address- changing and smart contract transactions consume a small amount of gas (ETH), depending on the platform. That gas does not go to Diamond Standard, it goes to the miners supporting ethereum.

Exchange fees: (Zero to Diamond Standard) Exchange fees are set by the individual exchange providers. BCC owners are not limited to any one exchange. Coins must be custodian-held to be listed on an exchange, in order for the proof-of-asset protocol to work.

App & Auditing Fees: (Zero) Diamond Standard charges no fees for use of the mobile app, web app, integrated audit, proof-of-asset, or API services.

Custody Fee: You may choose to take delivery yourself, or use an approved custodian for the Diamond Standard Coin and/or the BCC Token. Fees are determined by each custodian.

Physical Delivery Fees: Insured U.S. Delivery to a buyer is $50.00 for the first Coin, plus $15 per additional Coin, and will incur state sales tax where applicable.

Insured delivery to an approved custodian in Delaware is $25.00 for the first Coin and $10.00 per additional Coin, because we are shipping in bulk.

Other

This offering does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security. Furthermore, nothing in this Offering or website is intended to provide tax, legal, or investment advice and nothing in this website should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. Diamond Standard does not represent that the products or services discussed in this Offering or website are suitable for any particular investor. You are solely responsible for determining whether any investment, investment strategy, or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

"Diamond Standard" and the Diamond Standard logo and symbol are registered trademarks of Diamond Standard Holdings Ltd. The Diamond Standard Coin is protected by U.S. Patents, and Patents Pending.

OVERSIGHT & ASSURANCE
Offering RegulatorBermuda Monetary Authority (Pending)
Internal AuditorDeloitte
Token ExchangeTBD
Escrow BankSignature Bank
Digital CustodiansSelf custody —OR— BitGo, Gemini
Physical CustodianSelf custody —OR— Custody by Dillon Gage or International Depository Services of Delaware.
Diamond GradingGemological Institute of America
KYC/AML ServicesMazars
TOKEN OFFERING OVERVIEW
One BCC Token per Diamond Standard Coin, issued after KYC approval, upon receipt of payment. Coin delivered within 28 days.
TokenBCC (Bitcarbon Coin)
Token License (Upon Final Issuance)Bermuda Monetary Authority DABA
Token TypeAsset
Offering Price1 BCC = $5,000 USD
Delivery PlatformEthereum ERC-20
Other PlatformsEOS, Hashgraph, Stellar
AcceptingUSD, ETH
Sale Sitediamondstandard.co
Tokens for sale5,000
Initial offering$25,000,000 USD
Token deliveryChoose self custody, BitGo or Gemini
Token FIX venueTBD
Coin Delivery for Initial OfferingUSA Only (to owner or an approved custodian)
KYC RequiredYes
Buyer QualificationAccreditation not required
Prohibited Countries (OFAC)Cuba, North Korea, Iran, Syria, Sudan, Crimea Region
Diamond Standard Coin IssuerDiamond Standard LLC (USA)
BCC Token IssuerDiamond Standard Ltd (Bermuda)
FEES
After delivery of a Diamond Standard Coin and Token, Diamond Standard Charges NO FEES
Exchange FeesAs with digital currencies, exchanges determine the fees to trade on their venue
Private TransactionsAs an ERC-20 token, transactions consume a small amount of gas. Generally pennies per transaction, depending complexity.
Digital Custody FeesTake delivery and selfcustody your Diamond Standard Coin for FREE
or
Choose a digital custodian. They determines their fees. Initial offering: $6.00 per year (estimated)
Physical Custody FeesTake delivery self-custody your Diamond Standard Coin for FREE
or
Select a U.S. custodian, they determine their fees. Initial offering: $24.00 per year (estimated)