Offering Documentation
Offering Documentation
“GOOD FOR DELIVERY”
DIAMOND COMMODITY
Fungible Diamond Commodity with an Optional Tokenized Vault Receipt
Every Diamond Standard Bar (the “Bar”) is equal. The Bar is a physical commodity containing an optimized set of natural diamonds, and a wireless chip to issue a vault receipt for digital transactions.
The Bars are a natural diamond spot commodity that can be traded on a marketplace, and have been deemed “Good for Delivery” to settle futures and options contracts which are in development.
We sell Bars at the market price, then bid for large samples of diamonds via a global exchange, to then assemble and deliver the physical Bars to buyers. Funds are held on a segregated account until the diamonds are inspected by independent gem labs before assembly.
We will deliver your Diamond Standard Bar to your address in the US, or you can use an approved custodian like Brinks. Custodian clients receive a digital vault receipt used to transact (sell, lend) their Bars at spot.diamondstandard.co.
This Continuous Offering is for new Bars which conform to the Diamond Standard — a public index of the geological content that was established by a regulator supervised initial offering in 2021.
How are Diamond Standard Bars Equivalent?
To make Diamond Standard Bars equivalent, the diamonds embedded inside are purchased periodically through a statistical sampling process, by automatically bidding on global diamond inventories, to purchase a statistically valid sample of thousands of natural diamonds from around the world. Every purchased group must comprise a statistically valid sample of the primary diamond characteristics, such as carat weight, color, and clarity, for natural white diamonds between 0.76 carats to 2.05 carats, and match the statistical characteristics of the original IPO sample. The bidding is transparent to all vendors.
The gemological details of every diamond acquired through this bidding process are made permanently public, and the diamonds are distributed into Bars fairly by an optimization system. The optimizer ensures that every Bar contains an equivalent share of gemological scarcity. Every Bar approximates the natural yield curve of the range of diamonds in the Earth’s crust, which does not change over time.
Diamonds are purchased from hundreds of competing vendors through the Diamond Standard Exchange. It uses automated market making and transparent bidding, to force consistent price discovery mechanism for all diamonds in the range. To maintain the systems and cover the cost of delivering the diamonds globally, the Diamond Standard Exchange charges a 3.5% fee.
All diamonds contained in a Diamond Standard Bar are independently graded by gemological labs, and all larger diamonds are reinspected by a competing lab. Grading and confirmation services are provided by the GIA (Gemological Institute of America) and the IGI (International Gemological Institute). Diamond Standard Bars are reinspected by the IGI labs, and optically audited in an enrollment station.
How are Diamond Standard Bars Equivalent?
To make Diamond Standard Bars equivalent, the diamonds embedded inside are purchased periodically through a statistical sampling process, by automatically bidding on global diamond inventories, to purchase a statistically valid sample of thousands of natural diamonds from around the world. Every purchased group must comprise a statistically valid sample of the primary diamond characteristics, such as carat weight, color, and clarity, for natural white diamonds between 0.76 carats to 2.05 carats, and match the statistical characteristics of the original IPO sample. The bidding is transparent to all vendors.
The gemological details of every diamond acquired through this bidding process is made permanently public, and the diamonds are distributed into Bars fairly by an optimization system. The optimizer ensures that each Bar contains an equivalent share of gemological scarcity. Every Bar approximates the natural yield curve of the range of diamonds in the Earth’s crust, which does not change over time.
Diamonds are purchased from hundreds of competing vendors through the Diamond Standard Exchange. It uses automated market making and transparent bidding, to force a consistent price discovery mechanism for all diamonds in the range. To maintain the systems and cover the cost of delivering the diamonds globally, the Diamond Standard Exchange charges a 3.5% fee.
All diamonds contained in a Diamond Standard Bar are independently graded by gemological labs, and all larger diamonds are reinspected by a competing lab. Grading and confirmation services are provided by the GIA (Gemological Institute of America) and the IGI (International Gemological Institute). Diamond Standard Bars are reinspected by the IGI labs, and optically audited in an enrollment station.
Transparency
The contents of every Bar, and the independent gemological lab grading reports for every diamond, are permanently public, recorded on a blockchain. The complete and statistically valid samples of natural diamonds, from which Diamond Standard Bars are assembled, are public and recorded on a blockchain.
This data is used to prove that each sample of diamonds, and each Bar, contains a statistically consistent quantity of gemological material, which meets or exceeds the permanent “Diamond Standard” established by the regulator supervised initial public offering.
Visit diamondstandard.co/authenticate to view the validation data described above.
Market Pricing
The selling price of the Diamond Standard Bar is not set by Diamond Standard. It is established using third party data from buyers and sellers in the market through exchange trading—just like gold. Diamond Standard sells new Bars at the market-determined index price published daily by Bloomberg.
Commodity Trading
Once Bars are held in custody administered by DS Admin Trust, they can be traded online, since they are immediately deliverable to buyers.
Visit the Diamond Standard P2P marketplace at spot.diamondstandard.co to see recent trading activity.
You can sell Bars by accepting a current bid, or offer them at a particular ask price. You can also buy Bars from other investors. All spot market participants are subject to KYC & AML.
Questions & Answers
How is this a commodity?
The Diamond Standard Bar is physical and designed to be fungible. Diamond Standard commodities are currently held by over 3,000 family offices, hedge funds and individual investors. The spot market, launched in 2023, has 1,000+ registered members.
Every Bar is calibrated to be geologically equivalent, and intended to trade on the market at the same price, just like a standardized gold bar. The Bar is 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 real commodity containing a set of diamonds that is optimized to be statistically equivalent to all others, on the basis of the scarcity of the geological factors, like the diamond carat weight, color and clarity.
These commodities have been deemed “Good for Delivery” by U.S. CFTC licensees to settle listed futures and options contracts which are in development in the United States.
How is the vault receipt token issued?
Under the optimized set of diamonds, each Diamond Standard Bar contains a wireless (NFC) computer chip. This chip enables real time electronic auditing and instant authentication, and also stores an electronic document of title in the form of a public blockchain token. This vault receipt is issued to the owner only when the Bar is authenticated and received by an approved custodian. This token is tradable, entitling the holder (i.e. a buyer) to take delivery of that specific Diamond Standard Bar. If you encumber the token, by taking a loan for example, you encumber the Bar, with a lien recorded on a public blockchain. The unencumbered token owner can always take possession of the specific Bar by contacting the custody administrator. If the ownership has changed, the recipient will be subject to local KYC and AML requirements.
How is the commodity created?
We do not have a stockpile of diamonds. To create new Bars, Diamond Standard must purchase an audited, statistically valid sample of natural diamonds, using transparent bidding on the Diamond Standard Exchange. Every sample must be statistically equivalent to the original sample acquired for the Initial Offering. The detailed characteristics of every diamond, and the aggregate characteristics of every sample are public, for anyone to verify. After a sample is complete, the diamonds are divided into equivalent sets by an optimizer to be sealed into individual Bars.
Inside an independent gemological lab, each Bar is analyzed by an enrollment station, to optically and electronically inspect the Bar, the certificates, and the diamonds. If all aspects of the Bar are verified, in one simultaneous moment, a provenance token is electronically burned into the chip and enrolled on the public blockchain—or “Minted.” Provenance tokens can only be minted through a Diamond Standard enrollment station operated by an independent gem lab, upon the presentation of a Bar containing a valid set of diamonds, that are part of a statistically valid sample acquired through transparent bidding.
Once the Bar is received by an approved custodian, a transaction token (vault receipt) is issued. There is only one transaction token per commodity. There is only one transaction token per commodity. No tokens are issued to our founders, team, advisors or anyone else. Owners of Diamond Standard Bars always own 100% of the existing tokens.
How do I use the tokenized vault receipt?
Each Diamond Standard Bar contains a vault receipt token that can be issued to the owner after their Bar has been delivered to an authorized custodian. Custody is provided by Brinks, Loomis and MalcaAmit, and administered by DS Admin Trust. All Bars in custody are held in trust, so they can be transacted between clients of the trust (all the members of the spot exchange).
If you do not intend to transact your Bar soon, you can leave the vault receipt token unactivated. You can still audit your Bar, see its image, and review all of the diamond certificate, using the serial number.
Bar owners who use DS Admin Trust for custody can obtain a transaction token at any time. The token will be delivered to a Hedera HTS wallet address created for you by Diamond Standard.
To activate and take delivery of your vault receipt token visit app.diamondstandard.co
To sell or lend your Bar, you simply transact the token. Whoever holds the token, owns the Bar.
DS Admin Trust charges an annual custody fee, currently $240.00 USD, per year. The Diamond Standard P2P Spot Marketplace charges no transaction fees.
To take delivery of a Diamond Standard Bar, you return the vault receipt token via the site above. The custodian will charge a market rate for insured shipping and delivery, generally provided by FedEx.
Can I lease my Bar out for income?
Diamond Standard Bar owners can offer to lease out their Bars to earn income. Diamond Standard Carats are an asset-backed alternative to stablecoins, equal to 1/50,000 of a Bar. To create Carats ondemand for new users, DSAM LLC (an affiliate of Diamond Standard LLC.) leases Bars from private owners for 30 day periods—the title remains in your name and the Bars never leave the vault. With our Commodity Lease Program, you can earn a risk-free return on your Diamond Standard Bars.
Visit https://www.diamondstandard.co/lease for more information.What if my token keys are lost or stolen?
If you take delivery of your vault receipt token and lose your passkey, as long as ownership is not disputed, you can recover full use. Contacthello@diamondstandard.co for assistance.
In-Hand Transactions: When you take possession of your Diamond Standard Bar, you cannot list it on our spot exchange, lease it via our system, or use your Bar for blockchain transactions, such as a smart contract. Because there’s no proof-of-asset or guarantee of delivery for your counterparties.
But you can still sell your Diamond Standard Bar to a buyer face-to-face. Anyone can use the Diamond Standard mobile app (coming soon), anywhere in the world, to authenticate a Diamond Standard Bar, and you can privately buy or sell Bars at the market price or any agreed value.
Regulatory Oversight, Investor Accreditation, and KYC/AML
The Diamond Standard technology and processes are designed to be regulatory-compliant, acceptable to institutional investors and fiduciaries, and capable of supporting securities offerings, such as CFTC regulated futures, and SEC-regulated ETF funds and options.
As a delivered physical commodity, Diamond Standard Bars (their offerings, custody, or peer to peer trading) are not regulated by any securities regulators.
Diamond Standard Bar purchasers need not be accredited investors, but must submit information for KYC/AML review, and be approved upon such review.
Terms of Sale, Delivery
All purchasers must agree to the Terms of Sale Agreement.
At the time of purchase, you will instruct us to deliver the physical Bar to you personally or to a custodian. In order to transact your Bar on our platform, the custody must be administered by DS Admin Trust, subject to the Custody Addendum attached to the Terms of Sale Agreement.
Within 3 days of your purchase, the status of your order will be published on our website, accessible through your login. Your Diamond Standard Bar(s) will be assembled within approximately 30 days, to allow for the purchase, inspection/grading, settlement and assembly of diamonds. Upon enrollment, your Bar will be published on the public blockchain, and we will deliver it as you instructed.
If you deliver your Diamond Standard Bar(s) to a custodian administered by DS Admin Trust, you can then obtain the vault receipt token, enabling you to use the trading and leasing features of our platform. Otherwise, the Diamond Standard Commodity will be delivered to you, to store or trade privately. The vault receipt token is not transactable until the Diamond Standard Bar is delivered to an approved physical custodian, and the market price may go up or down in the meantime, at your sole risk.
Diamond Standard Bars can be delivered to USA and Canadian addresses and approved custodians only. In the future, delivery may be offered in more countries. 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. Purchases by ACH (or similar) are delivered after the expiration of any payment reversal period.
How to purchase?
Visit app.diamondstandard.co to create an account, purchase Diamond Standard Bars, select delivery options, and complete the KYC/AML application.
Sales Tax
For physical deliveries to US states where required, sales tax will be collected. For physical delivery to a Delaware USA custodian, no state sales tax is due.
Depending on your country of residence, you may be obligated to self-report tangible assets held in the USA, or report capital gains on such assets upon their sale. Diamond Standard and DS Admin Trust cannot report any information to tax authorities on your behalf.
Delivery (and optional) Fees
See the table to the right for required delivery fees and optional fees for custody by DS Admin Trust. After the delivery of your Bar, Diamond Standard charges no fees to authenticate, buy, sell, exchange, trade or transfer your Bar using its vault receipt token. Diamond Standard charges no fees for use of the mobile app, web app, integrated audit, proof of asset or API services.
Important Considerations
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 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”, “Bitcarbon,” “Carats”, and the Diamond Standard logo and symbol are registered trademarks of Diamond Standard Inc. The Diamond Standard Bar and platform is protected by U.S. Patents, and Patents Pending.