Phractional Cooperative White Paper

Summary

Phractional is the operator of a member only cooperative fractional asset platform. The offerings are available through our platform software app. We offer both member-owned fractional assets and Phractional managed dividend producing assets from the cooperative fund of investments. Using the latest technology in blockchain, tokenomics and share market concepts such as Separately Managed Accounts and Multi-level Managed assets, the Phractional platform will enable its members to get into the property and asset market in an easy low entry threshold manner. Phractional is a managed cooperative fund of assets and platform. It enables members to select which assets they would like exposure to.

Members have access to obtain shares in a Phractional portfolio of held assets. Phractional simulates an investment in assets. Phractional carries out the due diligence process of conveyancing, valuation and inspection. A regulated cooperative structure enables multiple people to ‘own’ a share of the asset. A liquidity component enables members who wish to liquidate their holdings to sell their shares to other members. To invest in an asset, a member must purchase Phractional Tokens in exchange for USDC token or fiat. Then, deposit the amount of their tokens in an interest-bearing treasury ‘Token Pool’. Once a member has chosen which asset they wish to invest in, their funds are locked-up then allocated to Phractional for the acquiring of the asset.

There are 2 main  types of assets members have access to are:

‍1. Phractional Member Owned Assets -

Fractionally owned assets by those who purchase a share of the asset. Members can commit towards the purchase of the assets by buying ownership shares. They can do this together with other like-minded members. When the campaign is complete, Phractional will purchase the asset. Phractional places the asset in a sub-cooperative and issues the members with units in proportion to the amount of shares they obtained. Phractional manages the asset with the fees collected.

2. Phractional Cooperative Owned Acquisition Assets -

‍These assets are owned by Phractional. Similarly Members can commit towards the eventual purchase of the assets by buying shares. The difference is, the shares have preset terms for payouts to the member in the form of dividends.  When a campaign is complete, Phractional purchases the asset. Phractional places the asset in a sub-cooperative and issues the members with the shares obtained.

Treasury Growth

Phractional will grow the treasury through liquid, short term, and long term opportunities including:

1. Contributions from members
2. Addition of assets
3. Appreciation of properties and assets
4. Yield strategies
5. Sales of Token
6. Loans to the cooperative

Phractional will benefit from the success of partner projects in the crypto real property industry as a whole.

Token Purchase

Token may be purchased by anyone for utility use on the platform. Only members can purchase token and use it on the platform due to securities and cooperative regulations.

CORE

Phractional is a Cooperative with a Board Member layer. This gives an equal voice to the voting membership. Only members may participate in the cooperative. Holding a token does not grant membership. Membership must be purchased separately. Although, anyone may purchase tokens freely for utility use on the platform.

Governance Overview

Phractional is owned and governed by the cooperative members comprising the board secondary layer of the cooperative entity primary layer, who are also membership and token holders. Non participatory voting members by default delegate all votes to the cooperative entity primary layer and its officers per legal regulations. Membership voting is "one member one vote". Voting is tallied based on the token percentage held by voting members. The minimum number vote weight (tokens) required to vote on a proposal. If this minimum is not met, the vote is unsuccessful even if the majority of voters voted yes. Members may submit  asset acquisitions "deals" to the cooperative with a permissionless process. Members may freely vote on acquisitions to be submitted to the Phractional team for due diligence before opening to the membership funding pool. The Phractional team of experts will also add to the value of the cooperative through direct acquisitions.

Policy

Phractional is owned and governed by member token holders. Our initial policy is for the following actions to be executed only after a successful proposal and vote:

1. Member submitted proposals
3 . Updates to core protocols

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Treasury

Phractional uses a direct implementation of Gnosis Safe and multisig to store its treasury assets. Gnosis Safe is a widely used standard for enabling multi-sig control over an Ethereum address. A similar technology will be implemented for their respective blockchains as needed.

Gnosis Snapshot

Gnosis snapshot is an off-chain vote aggregation platform. Snapshot supports off-chain governance for many industry leading blockchain and DeFi projects such as Balancer, Yearn Finance, SushiSwap, Uniswap, Bancor, The Graph, and Aave. We chose Snapshot as an off-chain vote aggregation platform to make governance simple and transparent for our users. It is a tried and true solution with a great user interface and user experience. Snapshot-based governance, is commonly referred to as "soft" governance as the result of the vote is not automatically implemented -- it requires a development and operations team to perform subsequent actions, and implementation.

Governance Token

A standard ERC-20 token that will be deployed on the Polygon and Avalanche blockchains. Other block chains will be added as needed.

Delegated Voting

All members agree to delegate their voting rights to the cooperative and its officers in the instance of non-participation in any voting process. Note that delegation does not lock or transfer membership or tokens

Voting

Phractional initial settings are 1 TOKEN = 1 vote weight, so each TOKEN has equal voting power. Voting is tallied based on the token percentage held by voting members. There is a minimum number vote weight (TOKEN) required to vote on a proposal. If this minimum is not met, the vote is unsuccessful even if the majority of voters voted yes. In addition, only Members of the Cooperative may vote. All voting has a duration of time in which votes are considered.

Tokenomics

Partners

Here is the beginning of the list of our partner network:

Advisors

This is a list of our advisory network: