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How the Token DPA works

What is the Token DPA?

Token Debt Payable by Assets

One of the ways you can invest on Republic Crypto is using the Token DPA — a loan issued by the company. The DPA is not equity or a token itself, but an interest bearing loan payable in tokens or cash in the future. Each project’s Token DPA terms are different – be sure to read and understand the terms of any agreement before making an investment.

Please note, not all Token DPAs are structured the same. Although many have all or some of the key terms - some may not. Please conduct your diligence and review the Form C filing and the Token DPA specific to the investment opportunity you’re considering. Investing in a company using a Token DPA, like all early-stage investing, is highly risky and subject to loss of some or all of your principal.

Understanding common deal terms

Republic Crypto offerings are done under Title III rules, so they share some terms with other offerings. Learn about the common terms here.

Key terms:

Cash interest

The amount of interest that will accumulate on the principal if it’s paid back to you in cash.

Token Repayment Premium

If the investment is repaid in tokens, this is the amount of interest that will accumulate on it. When the investment is repaid in tokens, the dollar value is converted to tokens using the token valuation. For example, a 20% premium means that your $1 would return $1.20 worth of tokens.

Token Valuation

The price per token, in dollars.

Maturity date

The date at which the investment amount and interest are due to be paid back, in cash or tokens.

Repayment of Debt Amount by Cash and/or Assets

The DPA includes milestones the project aims to hit within a specified time period, and corresponding milestone refunds which are to be repaid if specified milestones are not reached within a specified period of time. Milestone refunds are percentages of the investment amount, without interest applied. Issuers may also pay back lenders before reaching the milestone if they decide, in good faith, that their token will not be released.

Accrual Cliff

The amount of time that must pass before the DPA starts earning fiat based interest that would be applicable if investors are paid back in cash.

Elective Partial Refund

If you choose to cancel the DPA before it is paid back, the elective partial refund is how much of your investment you can get back.

Escrow Amount

The amount of your investment amount that is placed into an escrow account to ensure the company does not spend it unless you get tokens, are entitled to a cash repayment, a certain milestone is reached, or you have authorized the company to use the money in the escrow account.

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