8-K: ARAX and LCC Launch VERAT: A Revolutionary DeFi Platform for Life Settlement Bonds

ARAX Holdings Corp. and Longevity Capital Company have partnered to launch VERAT, a DeFi platform leveraging blockchain technology for transparent and real-time valuation of life settlement bonds.

Summary

• ARAX Holdings Corp. and Longevity Capital Company (LCC) have formed a joint venture called VERAT LLC to create a decentralized finance (DeFi) platform for life settlement bonds.
• The VERAT platform will utilize ARAX's Core Blockchain ecosystem, including CorePass digital identity, Ping Exchange, and smart contract capabilities, combined with LCC's real-time valuation technology.
• The platform aims to provide a transparent and efficient marketplace for life settlement bonds, allowing for fractional ownership and increased liquidity.
• VERAT will offer a range of solutions, including trade finance underwriting, DeFi-based stable token offerings, and open-ended life settlement bonds.
• The platform will use blockchain technology to ensure secure and transparent transactions, with a focus on regulatory compliance.
• The system will use a 'proof of distributed efficiency network', an improved evolution of the conventional Bitcoin 'proof of work' technology.
• The platform will also provide real-time data analytics and business intelligence tools for investors and fund managers.
• The life settlement market is experiencing growth, with an estimated $4.6 billion disbursed to policyholders in 2020.
• The average policy value in life settlements is about $1.2 million, and the typical life settlement payout is nearly four times the cash surrender value of the life insurance policy.
• The platform aims to democratize access to life settlement investments, making them available to smaller investors.

Sentiment

Score: 8

Explanation: The document presents a highly innovative and potentially disruptive platform with a clear vision for the future of life settlement investments. The use of blockchain technology and DeFi principles is promising, and the market data supports the potential for growth. However, the platform is still in development, and there are inherent risks associated with new technologies and regulatory compliance.

Positives

• The VERAT platform aims to democratize access to life settlement investments, making them available to smaller investors.
• The platform will provide real-time data analytics and business intelligence tools, enhancing decision-making for investors.
• The use of blockchain technology ensures secure and transparent transactions, reducing fraud risk.
• The platform will offer fractional ownership of life settlement bonds, increasing liquidity and accessibility.
• The platform will streamline the process of buying and selling life settlement bonds, reducing intermediaries and costs.
• The platform will use a purpose-bounded money (PBM) platform for settling reverse auction offerings of life insurance policies.
• The platform will use CBC20 token standards for secure tokenization of real-world assets.

Negatives

• The document mentions that the platform is still in development, with a second version planned for future exploration.
• The success of the platform depends on the adoption of new technologies and regulatory compliance.
• The document mentions that the life settlement market is complex and requires careful management.
• The document mentions that the platform is subject to certain risks and uncertainties that may cause actual results to differ materially from those projected.

Risks

• The platform's success depends on the adoption of new technologies and regulatory compliance.
• The life settlement market is complex and requires careful management.
• The platform is subject to certain risks and uncertainties that may cause actual results to differ materially from those projected.
• The document mentions that no assurance can be made that the transaction described in this Report will be consummated.
• The document mentions that the company undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

Future Outlook

The document outlines plans for a second version of the VERAT platform, indicating ongoing development and expansion of its capabilities. The platform aims to integrate Life Settlement Bonds into financial instruments that offer streamlined interactions within a new financial ecosystem that embraces emerging technologies and adapts them into new paradigms of innovative and trustworthy structured investment opportunities.

Management Comments

• The goal of the VERAT partnership is to offer complete legal infrastructure solutions for banks, InsureTech companies, investment fund managers, and people looking for small investment opportunities in an open-ended life settlement bond industry that is transparent and accountable.
• The VERAT platform is set to not only revolutionize liquidity transformation in the life settlement bond industry but also to allow more inclusivity for smaller and even individual investors.
• The VERAT Life Settlement Platform offers a unique blockchain-based asset management solution that empowers investment managers to have greater control over their clients' portfolios and deliver better returns.

Industry Context

This announcement reflects the growing trend of integrating blockchain technology and decentralized finance into traditional financial markets, specifically targeting the life settlement industry. The platform aims to address the lack of transparency and liquidity in this market, aligning with broader industry efforts to democratize access to alternative investments.

Comparison to Industry Standards

• The document references a Boston Consulting Group (BCG) report estimating tokenized alternative assets to be a $16 trillion business by 2030, indicating the potential scale of the market.
• The document references a Conning report displaying a promising future for life settlements, indicating the growth potential of the market.
• The document references a 2020 report by The Deal, stating that approximately $4.6 billion was disbursed to 3,241 policyholders, marking an increase from $4.4 billion and 2,878 policyholders in 2019, indicating the growth of the market.
• The document mentions that the average policy value in life settlements is about $1.2 million, and the typical life settlement payout is nearly four times the cash surrender value of the life insurance policy, indicating the potential returns for investors.
• The document mentions that policies worth an approximate face value of $640 billion were lapsed or surrendered, suggesting that many policyholders could have benefited significantly from life settlements, indicating the potential market size.

Stakeholder Impact

• Shareholders may benefit from the potential growth and profitability of the VERAT platform.
• Employees may be involved in the development and operation of the new platform.
• Customers, including investors and fund managers, will have access to a new and innovative investment platform.
• Suppliers and partners may benefit from the increased activity and demand for services related to the platform.
• Creditors may be impacted by the financial performance of the company and the success of the platform.

Next Steps

• The document mentions the development of a second version of the VERAT platform.
• The document mentions the deployment of the Core DAO's Liquidity Staking and Treasury Modules on the Ping Exchange's Settlement platform later in 2024.

Key Dates

Keywords

Life Settlement Bonds, Life Settlement Contracts, Core Blockchain, Decentralized Finance (DeFi), Tokenization, Digital Identity, Smart Contracts, Real-Time Valuation, Asset Management, Blockchain, CorePass, Ping Exchange, Purpose Bounded Money (PBM)