Real production value: LakeDiamond opts for ICO to raise funds to scale production of its lab-grown diamonds

Instead of raising money through investment funds or venture capital companies, LakeDiamond chose to issue digital assets online — via an initial coin offering (ICO). The whole process is made possible using blockchain, or distributed ledger technology, which records all transactions between members in a decentralised network. LakeDiamond has launched its ICO in October 2018, with Swissquote bank.

About LakeDiamond business

Founded in 2015 on the campus of the École Polytechnique Fédérale de Lausanne (EPFL), the young company produces lab-grown diamonds for high-tech applications. Its diamonds are grown in reactors in the form of plates, and can be readily integrated in various scientific and industrial applications ranging from micromechanics and robotics, to electronics, photonics and biotechnology.

The LKD token

The tokens issued by LakeDiamond under the currency code LKD have a value equal to minutes of diamond growth and are sold at 0.55 Swiss francs (CHF) each. That means they correspond to a concrete unit of production. LKD owners have two options to recoup value from their tokens: they can either use their LKD to have diamonds made for their own use or to cover part of the diamond orders incoming from industrial customers. The minimum investment is 33 Swiss francs, which equals one hour of production.

The LKD token lifecycle when capturing LakeDiamond industrial orders

When LakeDiamond receives an order from an industrial customer, LKD owners are informed about the order amount, value and number of minutes needed to fulfil the order. They can then use their minutes of production to manufacture the amount of diamond required to fill the customer’s order and get paid for it. “Owners of our tokens can capture the value of the diamond being produced. It’s a very flexible process for them. They put their minutes of production towards the type of order that suits them,” says Alex Kummerman, Chief Investment Officer of LakeDiamond. If LKD owners do not cover all the production minutes needed to fill the order, the company picks up the remaining time. Once the diamond is produced, LKD owners receive 70% of the revenue generated per minute that the reactors are in operation.

A growing value

The revenue generated per minute of reactor operation depends on the field of application. LakeDiamond forecasts this value at about 1 Swiss franc for micromechanics and up to 2.70 Swiss francs for biosensing applications or brain imaging. The technology for brain imaging is expected to be ready within the next 5 to 7 years.

LakeDiamond product roadmap and token value projections

Investing in LKD tokens

LakeDiamond is working with the online bank Swissquote for the first phase of its ICO, which is open since October 22. Swissquote is the first bank to give its customers access to an ICO. The second phase of fundraising will be open to the public via the digital platform that LakeDiamond will launch in the first half of 2019.

Alex Kummerman has no doubt, “We are moving towards the tokenization of the economy. This way of raising capital is not even close to reaching its maximum volume.” The company hopes to raise a total of 60 million Swiss francs. The ICO will help LakeDiamond buy 50 reactors, adding to the two it currently owns. That purchase would boost production capacity from 15,000 to 300,000 plates within the next two years.

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