Babbitt Column | Small and medium-sized enterprises in the epidemic may ask for help from on-chain equity to survive

Author: Sun vice president

I. The epidemic brought an information storm, but the blockchain was absent

Each crisis contains negative risks and positive opportunities. At present, this pandemic is a typical case. Negative risks are well known and will not be repeated here. Positive opportunities are mainly reflected in the following: Logistics is limited, and the demand for unmanned logistics and information flow in the society has begun to surge. If the relevant digital economy products can seize this opportunity and fully demonstrate their characteristics, they will have the opportunity to cultivate users' habits during the epidemic. The current sluggish science and technology industry is bright. Among the many digital technologies, the most eager to prove for themselves is the blockchain industry that has previously faced strict supervision.

Can the blockchain play a role in the epidemic? In theory, yes. Due to the outbreak of people and logistics, the company's revenue has fallen sharply. For enterprises, there is only one way to maintain business, which is to reduce costs. One of the most important functions of blockchain technology is that it can be used to reduce the cost of trust, rather than giving people new rights. In fact, it is precisely because of this.Although the industry has been marketing blockchain (not virtual currency) very much, the interest of many people and enterprises is often not sustainable. This is like artificial intelligence. The heat is always higher than the cloud platform. For small and medium-sized enterprises, which are now hopeless in increasing revenue, reducing costs is definitely a big need. If we can become famous in this battle, the blockchain in 2020 may be the same as the e-commerce in 2003 and become an important infrastructure of the digital economy and the whole society.

However, a very realistic problem is that, in the past two years, the blockchain industry has not been able to produce a relatively mature product. Therefore, in this digital feast brought by the surge in traffic, technologies such as blockchain and 5g network are temporarily absent, and its effect in reducing costs is still mainly around the only product-also It is the token to unfold.

Second, the cash flow is tight, the company may turn to option incentives

Let's look specifically at how tokens can be used to help companies reduce costs.

As mentioned earlier, because there is no income, many small and medium-sized enterprises have recently laid off staff and cut salaries, but for enterprises, this is actually a method of "killing one thousand opponents and self-damaging 800". It is not advisable to run out of cash to cause the company to close down. If there are too many layoffs and excessive wage reductions, which will cause employees and even major members to leave, it will also be an important blow to the company. I am afraid that it will take a long time to recover It is in a normal operating state, and it will be difficult to say whether the company can still occupy the original customer resources and market share in the market. So for SMEs, the key now is how to maintain the company's backbone structure without paying too much cash costs. The solution to this difficult problem involves a scheme that has not been mentioned for a long time-company equity or options.

Strictly speaking, in the current labor market, the image of equity and options is not particularly positive. Due to the irresponsible behavior of many startups in the past few years, equity and options have become low-value assets close to Aircoin. For some office workers, "replacing cash with options" has become a typical routine for companies to draw a big cake. Therefore, in the current job market, many companies will only further discuss equity if both parties are satisfied with the cash. The problem. Otherwise, talking about equity and options in terms of compensation is a very detrimental thing to the company's image.

But the problem is that for various companies, it is now an urgent juncture. What they are facing is not the question of whether or not to face, but whether the company can survive. Therefore, in the case of high cash constraints, their remuneration may require the use of equity and options, on the one hand, to maintain the existing personnel organization, and on the other hand, to keep the cash on the books. After all, the method of using equity to replace cash has indeed helped some large enterprises successfully overcome certain difficulties, such as Huawei during the SARS and financial crisis periods. However, the problem is that the equity before listing is different from the stock after listing, the asset liquidity is relatively poor, the reliability is not strong, and the endorsement of authoritative institutions is lacking. Therefore, in this case, the SMEs in this crisis That said, if you want to maintain the existing personnel organization structure through the way of equity issuance, it may be a feasible option to implement equity or options on the chain.

Blockchain or boosting equity transfer

It should be pointed out that the ideal "option + blockchain" is really just to record all the conditions and circulation of options on the blockchain, and there is no such thing as the above, or to be precise, Only after the company's IPO can the options on the chain be unlocked and liquidated as required, because as long as the digital currency platform is entered in advance, the price of equity will be manipulated immediately and completely distorted. Therefore, the significance of blockchain for equity is mainly to enhance the reliability of the foundation and increase the liquidity of assets in the absence of a reliable option transfer platform.

For example: Many startups issue options to employees, usually written in onboarding agreements or special options agreements. Imagine the following scenario: Employee A only wants to work in the company and does not want options, and the company cannot discount the options to him. Or employee A wants to transfer futures to employee B, which is generally not allowed. In this way, A and B's work enthusiasm will be affected. But if the option is to be chained, the company writes the option prepared for the employee into a smart contract, uses the token to represent the option, and writes it into the company's articles of association. Then employee A does not have to sign a special option agreement, but only needs to receive option tokens. At work, employee A does not want to hold futures, and employee B is optimistic about the company's prospects, so A can sell option tokens to B. In this way, with the convenience of the token, the flexibility of the options is mostly, and the economic needs of A and B are also met.

By the way, many of the information on the Internet today will say that future currency rights will replace equity and form a new governance mechanism. In theory, it is not impossible, but in terms of current experience, currency rights have not Compared with the superiority of equity, the so-called community autonomy is much more chaotic than the management of the board of directors. Therefore, at the current stage, the blockchainization of equity is really just the equity The circulation information is on the chain, mainly to play a role in accurately recording equity information and even promoting its liquidity before the equity IPO. As for the "autonomous organization DAO" and the like, at present, it is more of an idea, because the governance of the company is a professional job, not an ordinary person who lacks management experience.