The $ 10 million deposit fee to join the Facebook-developed crypto-equivalence Libra Association is just a minimum. Members who want to verify transactions may choose to invest more in exchange for several Libra Investment Tokens that will earn them dividends from interest earned by the Libra Reserve after it pays for infrastructure and operating expenses. If regulators allow it to launch today and require a decline in development, and the crypto course becomes popular with tons of people cashing in local currencies for Libra, the reserve holding those assets can be large and give meaningful returns via interest – especially for those who are willing
If you are confused, read our guide to everything about Libra
Each Libra Association member only gets one vote on the council, including Facebook . But if Facebook puts in $ 500 million and another member like eBay assumes only a minimum of $ 1
In front of the Libra announcement two weeks ago, Facebook's blocking head and now Calibra David Marcus said to me: "The reserve is of interest to some of these tax authorities. It is a small amount and it is variable, but if the reserve becomes large, become a significant way to fund the association, but also return capital to investors. "Nevertheless, Facebook, for all its talk about openness with Libra, refused to tell me how much it has invested in the Libra project as a whole or Libra Investment token. It should be a core issue raised by Congress when Marcus witnessed the Senate Chairs on July 16 and the House Financial Services Committee on July 17. Facebook did not respond to requests for comment on this article. Congress should also be sure to ask how Libra will avoid a Cambridge Analytica-style crypto disaster, given that apps built on the Libra developer platform are not subject to review.
The share of the total Libra Investment Tokner that Facebook owner partially determines how decentralized Libra really is. If Facebook owns the lion's share or a majority, it can give too much financial impetus to bending the rules to its advantage even if it has only one vote on the council.
That's it. Facebook has led to the development of Libra. In fact, the Libra Association has yet to draft and ratify a charter or formally admit members. Technically, only Facebook's project right now. "So far, we've funded everything," said Marcus Information's Alex Heath. It has also been coded all over, organizes everything and communicates everything.
As such, at present, the project cannot survive without Facebook, and may not be able to for a while. That means that if Facebook at any time disagrees so strongly with the Libra Association as it threatens to withdraw, it is in danger of investing all the other members. It can force them to vote in support of the governance proposals. Facebook would therefore not need more than one voice to get much greater influence on the project's direction.
In a Facebook note (… not a Libra.org blog post), Marcus wrote, "The investment levels of each of the partners will most likely be public even when they actually live." may be too late for regulators to switch or other members to really understand the asymmetry.
At the same time, Marcus said that "We have mostly lent money to the association which at some point will be repaid." It raises another question about how much Facebook has already lowered into the Libra project, how much it expects to be repaid and on what schedule. Members can be more skittish to join if they learn a lot from their $ 10 million investment, just go to pay back Facebook.
Not to mention the other ways Facebook will make money from Libra. Marcus wrote today that "If Libra is successful, Facebook will first benefit from it by enabling more trade across its family of apps. More commerce means your ads will be more effective and advertisers will buy more of them to grow In addition, if we earn people's trust in the Calibra wallet over time, we will also be able to start offering more financial services and generating other revenue streams for the company. "
The fact that Facebook is monitoring development and having a massive start Building their wallet, which will be baked into their billion-plus Messenger and WhatsApp products, does not hurt potential customers with providing other financial services. It will be the first to market, immediately on a scale, with an insider role in defining the rule book.
I do not discount the potential Libra must help unbanked who cannot pay fees to have too little money in their accounts, or make trading cheaper for small businesses. But if Facebook stands to earn extraordinary returns directly and indirectly from Libra, while expecting other members to get their R&D bill and those numbers are not published soon, it is reasonable to question how decentralized and altruistic this project really is. is.