Nostr Web Client

No bueno. Just raise in fiat and offer bitcoin as a payment rail with a fiat reference if necessary, then run a btc treasury strategy. As written, this puts startups behind the 8-ball from the beginning and, at scale, creates an ecosystem of net bitcoin sellers. This instrument still pegs it all to fiat with worse terms for the startup.

This only works once there’s no fiat references at all. IE when bitcoin price is a relatively stable unit of account. We’ll get there one day.

PDJ 4mo ago

Killer feedback. Need to update the fiat peg to something else and make sure terms are fair.

Come at this from a desperate Bitcoin holder that wants to invest in a Bitcoin standardized company but would have to convert to fiat and recognize a gain. They have no fiat.

This vehicle is specifically for a mutual transaction between parties that don’t want a future where they don’t touch fiat rails ever again and specially for investors in Bitcoin that don’t want to recognize a gain by liquidating to go to fiat. If a note vehicle denominated in only in Bitcoin doesn’t exist then that Bitcoin investor has to forgo Bitcoin’s CAGR, take a cap gains hit converting to fiat and still pay taxes on a liquidity event in fiat if there is one.

That’s a sad reality for Bitcoiners trying to invest Bitcoin in Bitcoin companies. They can’t.

So without a vehicle like this (yes there’s some potential negatives like when a company is a forced seller) the most passionate Bitcoiners will not be able to invest in Bitcoin standardized companies.

Either way this feedback is actually spot on so we have to update the doc.

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Discussion

Eric FJ 🪬⚡️ 4mo ago

Yeah, there’s no way around the cap gains hit if you put BTC directly into a fiat-denominated SAFE.. unfortunately it’s treated as a sale. That’s why removing cap gains on BTC is a way bigger priority than all this other noise. The cleanest workaround right now is taking a BTC-backed loan and investing the fiat into the SAFE. In your current structure, you’re effectively putting that loan risk onto the founders instead of keeping it with the investor.

PDJ 4mo ago

👌