Mojoflower provides Government issue share-ledgers and share-management tools for SMEs powered by Stellar.

The focus is on issuing SME shares and certificates on behalf of governments in tokenized form. The tokenized shares are delivered to Shareholders' wallets following a formal application process. We provide shareholders with tools to manage their shares in the tokenized form, increasing usability and enabling them to use smart contracts with ease. Secured by Stellar, the assets can be managed for the asset's full lifecycle while staying compliant with regulations.

You can see our website here. https://mojoflower.io/

Also below are slides from the SCF submission and a link to the entry.

Dashboard


Presentation slides






Introduction

Share-ledgers record ownership of companies, and most often, companies are legally obliged to keep these share-ledgers readily available to all shareholders and Government officials. Share-ledgers constitute the highest legal proof of the ownership – if your name is in the newest version, legally, you are the owner. However, the keepers of share-ledger are not required to adhere to a set standard method, and people can use paper, spreadsheet programs, or dedicated services.

In some areas, such as the EU, Anti Money Laundering laws have increasingly been put in place to increase transparency and make ownership records public with mandatory registration of Beneficial ownership. This registration requires companies to record direct ownership of shares as well as indirect owners, voting rights, and control through related parties.

The different methods people use to maintain records make it hard for the Government to sustain adequate oversight. Governments struggle to keep files up to date and rely on self-reporting from shareholders who see it as tedious and a non-value adding task. The result is a problem that creates inefficiencies that result in both economic and societal costs. These inefficiencies hamper the growth of businesses and make the current system prone to corruption.

A share-ledger system built on Stellar will allow owners to control their shares while keeping the officials updated in real-time without extra effort and receive benefits from keeping their records neat and tidy. Our platform will increase the value and liquidity of shares for the owners and lower government costs.

Background

All private limited liability companies (SMEs) in Iceland are required to do the following:

Register the LLC with the Government registry and get an official ID number. (It's an electronic application process with an Electronic ID as an authenticator for the individuals. Founders are listed, board members, etc.)
When the application is approved, the company is required by law to establish a "Share-ledger." The share-ledger is a record of shareholders and the number of shares they own. For each newly founded company, the share-ledger includes much of the same information as "1)". The share-ledger constitutes the legal authority on ownership. (Majority uses excel. Meanwhile, many do not keep one.)
LLC's are required by law to update and inform the Government registry on changes in ownership due to the beneficial ownership legislation under recommendation from FATF and EU legislation. (This is an electronic process, initiated by logging into a government portal with an electronic ID)
The problem is this. Reporting in compliance and personal record-keeping are independent processes. Compliance relies on self-reporting and self-verification of ownership that can lead multiple versions of "truths" to co-exist at any given time.

Focusing on each group independently, Government, and shareholders, respectively, we can identify issues better.

The situation facing the Government

  • The Government relies on self-reporting, and legally there is a window of 2 weeks to inform the Government of change. Documents can easily be backdated and fixed.
  • The beneficial ownership reporting is time-consuming and takes some effort. As it provides little benefit to companies, other than being compliant, the risk is that records are not kept well and up to date.
  • The records that the Government keep are not the highest authority - it's simply the last known report. It's always the Share-ledger that has the final say.

The situation facing shareholders

  • The reporting is a non-value adding task and extra work. There is no real benefit to companies other than being compliant.
  • The share-ledger system is currently "self-verifying." By that, we mean that it's the company's representatives that verify its correctness at any given time, and no external party needs to validate this.
  • Transfer of shares is not transparent – buyers and sellers need to enforce the share-ledger's update and verify the correctness themselves. Often this includes going through gatekeepers.
  • The "Self verification" of the share-ledger decreases the value of the company in multiple ways. There are transparency issues and hidden costs, making it harder for financial institutions and investors to engage with the assets actively.

The current system increases burdens on good actors and favors bad actors. It's extra work for the diligent one, yet it's easy to maintain sloppy or wrong records on the side.

The opportunity and vision

We at Mojoflower believe that blockchain technology can help this situation described above. With new technology and vision, we can unlock value for parties involved, making the whole system more efficient, effective, and valuable.

The new process looks like this

Register the company via the electronic process it's currently done.
Registered data from the Government database is ingested into our systems and shares tokenized as verified assets.
Custody is given to the LLC's owners through the platform, enabling them to unlock value at low cost since verified assets are more valuable.
The result

  1. For Government, self-reporting becomes automatic reporting and more correct in almost real-time with better results.
  2. For Shareholders, self-verified assets become officially verified and thus more valuable and more tools to harvest that value.
  3. 3rd Parties, Investors, FI, and service providers can better interact with verified assets and ensure that the underlying asset's process is compliant and transparent.

Smart Contracts

Utilizing Stellar's Smart Contract logic, we can build powerful tools that our users can simply interact with. This is what we mean by saying. "We make smart contracts. Simple ".

  • Our Smart contracts will enable users to interact with assets more freely and at low costs than before.
  • Our Smart contracts include simple transfers, pledging contracts, dividend payments, and more.
  • We envision our Smart Contracts being integrated with other wallet and service providers in a reciprocal relationship.

Vision and goals

Our mission is to enable simple share management for SMEs and unlock value for companies while staying compliant.

Our vision is to become the standard for share issuance and share-ledger management and Government issue for company share registration.

Our Values

  • We are inclusive and non-discriminative
  • We believe in equal pay for equal work and closing the gender gap is our responsibility.
  • We believe in equal access, fair pricing of products, services.
  • We believe in reciprocal relationships between suppliers and customers.

Benefits for Stellar and the ecosystem

We believe that the success of Mojoflower can trigger a significant adoption event.

Stellar has the opportunity to onboard assets and introduce new users to the ecosystem. With new assets secured by the network and new use cases, undiscovered needs will come to light and drive demand. This demand will positively spiral across the ecosystem.

In the case of Iceland, 40K companies are onboarded. These are all companies where the majority is underserved, yet they are the foundation of the economy. All these companies and their representatives and investors would have direct access to the Stellar ledger. What effect might that have?

One scenario imaginable is that Investors might prefer to invest in companies that pay dividends directly on the network. That would drive demand for anchors and provide foundational support.

Direct access to the ledger and familiarity with the network increases trust and reduces traditional platforms' switching costs. Thus, it becomes easier for product and service providers to introduce their products.

We will develop and facilitate the development of Stellar tools for an inclusive ecosystem. Our tools will include transaction builders, smart contracts, and analytics tools. Independent 3rd party developers or companies can easily interact and integrate with our platform. After all, it's built on Stellar, and stellar is inclusive! We will foster a competition-friendly marketplace, where the user benefit and security will be the focus.

We further see opportunities opening for anchors, wallet providers, financial institutions, Traditional CSDs, or a new type of DSDs, B2B payment providers, B2C-POS solutions, analytics providers, contract builders, and more. We believe in the Stellar vision, technology, governance, and the SDF's focus on a relationship with regulators. We believe in the project and its ability to be a great business opportunity and positively affect society and other businesses.

We believe Stellar is the right choice for the future, and we hope the community will choose us.

The project would utilize

  1. Stellar
  2. Existing official Electronic ID system (KYC)
  3. Existing Government's electronic application process
  4. Existing banking infrastructure and Stellar anchors

For the full presentation look here -> https://communityfund.stellar.org/seed-fund#/entry/43f6419321e61c9abc7c1abe899b62293c1a9fe7c381e5684af091b1de939579!

If you have any questions, please share and we'll respond promptly.

22 days later
20 days later

Update progress report:
Discussions with various stakeholders are ongoing and the need has been established. This includes various meetings with members of parliament, private companies, investors, and special interest groups. Unfortunately I cannot share all details publicly but will I will provide the SDF with more details. Everyone agrees that there is a need for improvement, and this solution could provide the right incentives for stakeholders to benefit.

Further, we are developing our standard for reporting, and are looking towards www.openownership.org for coordinated standards of reporting to be able to expand and scale more efficiently in the future.

Please feel free to ask any questions.

Best,
Oli

a month later

Thank you who took part in the community vote.

If you have any questions please feel free to ask.

In the coming weeks, we'll be posting updates that will both explain our use case and why we believe the project is useful and important, both for society and the blockchain ecosystem.

Looking forward to connecting.

7 days later

Update progress report:
Since the last update, we've had some significant progress and also some setbacks #startuplife.

The first discussion in parliament that directly links to Mojoflower's efforts to raise awareness and discuss with the Government of Iceland has made its way online. To be transparent, here is a link to that discussion to the questions posted and a precursor for more to come. https://www.althingi.is/thingstorf/thingmalalistar-eftir-thingum/ferill/?ltg=151&mnr=610 ; I will submit further proof of connection to SDF as needed.

Further, we have more meetings planned with cabinets and institutions after Easter to introduce the project and rally more support.

We've spent time analyzing and evaluating the benefits of keeping KYC/AML information in a .toml file or simply having it stored as a data entry on the ledger itself. If anyone here has any feelings or thoughts about that, please reach out.

We are also refining our strategy to make onboarding simpler and provide a more lightweight approach to speed things up. It will allow us to offer our users the end-to-end verification and source of origin for KYC/AML from day one. We believe it will give us a speedier path to demonstrate the system's value for official use and pilot it properly.

Further, we had the first introduction with Mousebelt - that was nice, and we are looking forward to more conversations.

Lastly

We've been enjoying going over the other finalists and trying to look at them as potential partners. In the coming weeks, we'll be posting some ideas for reciprocal relationships and symbiosis.

If you are with any of the Finalists groups or any other project on Stellar, you see potential symbiosis between us; by all means, get in touch.

Keybase: mojoflower*keybase.io
Website: www.mojoflower.io

22 days later

Update progress report:

Now at the end of the community discussion round, it's time for a quick update.

We have been working towards awareness and engaging in discussions with community and various projects, seeking potential co-operation and learning and sharing what we can.

In Iceland, the public discourse has been progressing, and we feel strongly that we have contributed and strengthened the discourse. We are still being met with the question, what is Blockchain? Is that like Bitcoin? But we are playing our part, and we hope that at the end of the Community Funding Phase, we will demonstrate the value for businesses and the government using our solutions and wholeheartedly believe that Mojoflower's vision will increase value and improve the way we do business in years to come.

In the News:

SKE in Iceland - the equivalent of the FCA/Competition Authority just released this statement.

The short version is that they are signaling and calling for increased efforts in registering ownership and analysis of owner relationships.

"The Competition Authority is now investigating management and ownership relations between companies and has sought scholars and consultants. The expert group of the trade union movement criticized the lack of control over this aspect in January. This information is important to limit large risks in the banking system."

This and the conversation with Parliament members suggest that we contribute to the public discourse and on the right track.

As previously posted. A member of parliament who we have been in contact with submitted the first question to parliament a couple of weeks ago. Question here . We are still awaiting a response.

From the Finalists:

We have been reviewing other finalists as well as other participants from the community seed fund. Many very bright projects that hopefully have a bright future ahead of them.

As promised, here are symbiosis ideas, which is a way of pointing out how the community can benefit from each other and the importance of talking together and sharing ideas.

From the finalists' pool

Blocknify:
Trying out the product is lovely, and it feels as it works as it should work from a user experience. I think this is a great product to have in the Mojoflower world, and I can see several applications that tie directly into the Mojoflower mission. I can also see it as a lovely complementary to have alongside certain transactions and smart contracts.
From a business point of view - I can see Blocknify and Mojoflower coexisting rather well, and both can benefit from each existence and even co-operation.
"Our goal is to make e-signature a commodity and enable high volume workloads. We solve this issue by enabling cost-effective high-volume white label e-signatures that they can offer directly to their users." - Blocknify.
Conclusion It gives me the feeling of an Intuitively symbiotic relationship, and I look forward to developing new products

Coinqvest:
My first interaction with the system was via the Public Node support, I believe, and I liked how it just worked. I was able to pay with my XLM, and I understood the process.
As I understand it from the site, the primary focus is integrating into e-commerce platforms and allowing Crypto payment processing. That's beautiful and needed. That particular use case is perhaps not what Mojoflowers core users would be looking for, but they would benefit from being exposed to that solution.
However, I see significant potential in having Coinqvest processing other types of transactions. For example, batch processing such as dividend payments, where you need a streamlined process that users can easily handle, powered by Coinqvest, could offer users services. Also, a Crypto portal for Government payment processing is something that I can see on the horizon.
It would be great for local markets to connect and process payments in the local currency via the anchor. That could drive the whole network's useability so that you can have value flowing freely in and out of the ecosystem.
Conclusion: Definitely something there, and both can benefit from each other existence.

Looking forward to going more wholly through other Finalists products and offerings and looking forward to the conversation!

If you have any questions or just want to chat, get in touch.

Best,
Oli

Keybase: mojoflower*keybase.io
Website: www.mojoflower.io