Convert entire STRD supply to ATOM

First of all we would like to thank the involvement of so many parties in that discussion. Of course we expect that situation to create a lot controversies along the way. But at the heart of the question, at Govmos (the governance arm of PRO Delegators’ validator), we believe that this matter is more financial than political.

Merging or acquiring two cryptocurrencies is a complex process that involves legal, financial, technical, and strategic considerations. While traditional finance M&A can serve as a source of inspiration, it’s important to note that cryptocurrencies operate in a unique and evolving regulatory environment. We also emphasized in a previous topic the likelihood to see the Hub evolve into a decentralized bank. We also shared a model of regular banking businesses in this other post.

In our current context, the merger and acquisition between Stride and the Hub holds significant importance. This marks a crucial test for the Hub’s governance, examining its collective intelligence in orchestrating this operation to benefit both parties. We anticipate numerous future M&A endeavors, and envision the Hub as a central player offering M&A services for the broader Cosmos community in the near future. Thus, it’s imperative to showcase our capability to handle this transaction with the utmost professionalism.

Looking ahead, we anticipate the formation of a proficient sub-DAO dedicated to M&A tasks. However, presently, we lack this specialized resource. To assist the community in navigating the upcoming steps, we’ve provided a detailed breakdown of the typical M&A process:

  1. Preliminary Due Diligence: a. Conduct initial due diligence on both cryptocurrencies, evaluating their technology, user base, team, market positioning, financials, and legal status. b. Identify synergies, risks, and potential challenges associated with the merger or acquisition. That’s the phase we are currently in with this post and some people have produced quite some good posts going exactly in that direction.
  2. Letter of Intent (LoI): a. Draft a non-binding Letter of Intent detailing the intent, structure, and terms of the proposed merger or acquisition. b. Include a confidentiality clause and an exclusivity period during which negotiations take place.
  3. Conduct Comprehensive Due Diligence: a. Engage in in-depth technical due diligence to evaluate the underlying blockchain technology, smart contracts, security measures, and scalability of both cryptocurrencies. b. Review legal documentation, compliance with regulations, intellectual property, and any potential liabilities. c. Assess the financials, including revenue models, operating expenses, token economics, and funding history.
  4. Valuation and Negotiation: a. Engage financial and legal advisors to assist in the valuation of each cryptocurrency and negotiate a fair exchange ratio or purchase price. b. Consider using various valuation methodologies such as discounted cash flows, comparable company analysis, or precedent transactions.
  5. Definitive Agreement: a. Draft and negotiate a definitive agreement, detailing the terms and conditions of the merger or acquisition, including the structure, timeline, and any conditions precedent. b. Include representations, warranties, covenants, and indemnification clauses to protect the interests of both parties.
  6. Regulatory Compliance: a. Ensure compliance with applicable laws and regulations governing mergers, acquisitions, and cryptocurrencies in the jurisdictions involved. b. Obtain necessary regulatory approvals or licenses, if required.
  7. Integration Planning: a. Develop a comprehensive integration plan outlining the integration of technologies, teams, operations, and user bases to realize synergies and maximize value. b. Consider how to handle token swaps, community engagement, and communication strategies.
  8. Closing and Implementation: a. Complete the transaction as per the terms of the definitive agreement, ensuring all conditions precedent are satisfied. b. Transfer assets, update databases, and execute any necessary technical changes to implement the merger or acquisition.
  9. Post-Merger Integration and Monitoring: a. Oversee the integration process, addressing any challenges, and ensuring a smooth transition. b. Continuously monitor the merged entity’s performance and make necessary adjustments to achieve the desired goals and outcomes.

We will do our best to assist the community in every steps along the way. Our experience in risk management & financial modeling will be especially tailored to support the community in “phase4”. We would also incentivize anyone in the community with connection to someone with previous experience in M&A to take a stand and bring that knowledge to us.

Thanks for reading ! If you like our job, you can support by delegating to PRO Delegators Validator

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