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:
The amount of interest that will accumulate on the principal if it’s paid back to you in cash.
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.
The price per token, in dollars.
The date at which the investment amount and interest are due to be paid back, in cash or tokens.
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.
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.
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.
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.
