New York based start-up, Diamond Standard is launching a new way the diamonds can be traded on the Ethereum blockchain.
The firm is set to convert diamond into a liquid commodity such that investors can easily buy, track, sell like other assets.
Towards achieving this, the start-up is holding its Initial Coin Offering (ICO) and Asset Token Offering on Monday. Through this, the New York based startup aims to achieve a standard price for the precious stone. They would do this by pegging the gemstone to a physical token which is encrypted, trackable, and registered to the blockchain.
The startup aims to make as much as $25 million via the sale of the diamond-studded tokens.
Trading diamonds on Ethereum blockchain
With Diamond Standard, the complex process of trading diamonds has been simplified.
The start-up provides a solution to the brick and mortar traditional method of auction, finding a buyer or recounting losses on sales of Diamonds.
Diamond Standard founder, Cormac Kinney, in an interview, explained that their app is an efficient commodity like gold. He explained that once the gemstone has undergone necessary checks and separated into sets by America lab, they are assembled into a Diamond Standard Coin.
Afterward, they are sealed and embedded with wireless encryption keys. It then passes through Deloitte audits and is registered as an ERC-20 token on the Ethereum blockchain. When these processes are completed, the diamond could be traded, sold, and used as a collateral for loan through the mobile app.
“Diamond Standard is unique—it is both a physical and digital asset containing GIA certified diamonds,” Tom Leonard, a spokesman for the start-up said.
$25 million diamond-studded tokens to be sold Monday
Diamond Standard on their ICO launch would trade certified natural diamonds with identical geological scarcity and a wholesale market value of $5,000.00 as of the sale date.
Diamonds up for sale are blockchain tracked through wireless computer chips. When purchased these chips are handed to the buyer or custodians, BitGo, Gemini, Dillon Gage, or IDS Delaware.
Individual buyers could sell them further through Diamond Standard App or website. However, necessary Know your Customer routines are to be completed to trade on Diamond Standard App.
Leonard said that “Not only can you trade the commodity, but you can pledge up to 80 percent of the value of the coin through smart contacts and back any digital transaction.
Diamond Standard would mark as the first digital platform where gold can be traded after its Monday ICO.