NFT projects begin to give away ‘free’ company equity to holders

    2024.01.03 | exchangesranking | 124onlookers

    During the holiday season, the founders of two nonfungible-token (NFT) collections announced that they would be giving away company equity to NFT holders. 

    On Dec. 25, Pons Asinorum, the founder of NFT collection The Plague, announced that holders of their NFTs will be allocated a percentage of their company shares based on the number of unlisted NFTs they hold.

    While it might look like there may be legal and regulatory risks involved, the NFT founder claimed it was legal as the shares were not sold. The founder said that they consulted multiple lawyers over the legalities of the move and said that holders did not expect to receive shares when they bought their NFTs.

    Days after the announcement, another founder of a popular NFT collection announced a similar move. On Jan. 1, Rektguy co-founder Ovie Faruq, also known as OSF in the NFT space, announced that their NFT holders would be gifted equity in their company, Rekt Brands Inc. 

    The executive said this is a gift to collectors who supported Rektguy as an art project. Faruq also clarified that trading the NFTs will not transfer any equity. The Rektguy co-founder also implied that this is being done legally. “We are proud of our work behind the scenes to achieve this in a valuable and compliant way.” 

    According to NFT tracker CryptoSlam, The Plague has an all-time sales volume of over $7 million, while Rektguy has over $28 million. 

    Related: Early Mickey Mouse version becomes top NFT on OpenSea after copyright expires

    Community members reacted to the announcements, discussing whether the moves were a “gamechanger or just a sham.” Azuki’s Researcher in Residence Waleswoosh believes this is legal “under certain circumstances.” The researcher said that in both cases, the criteria for eligibility are already in the past. Waleswoosh explained that the NFTs were not sold with the clear intention of offering equity. 

    Meanwhile, some expressed their hopes that other brands would understand its implications. A community member said there could be multiple ways to apply it and circle around real equities. “The most realistic one is NFTs/Trait market share: you generate sales and a % goes to a specific holder,” they wrote. 

    Cointelegraph reached out to Ovie Faruq and Pons Asinorum on X for further details but did not get an immediate response. 

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