I am looking for people interested in contributing to an Australian based project which aims to increase accessibility to racehorse ownership.
The Cardano Racing discord group has been established to further discuss the concept. All feedback and suggestions are welcome. Discord Link: Cardano Racing .
For those interested, version 1.0 of the White Paper can be reviewed below. I look forward to your feedback and suggestions and hope to connect with you soon in discord.
Thank you for your time,
The following paper proposes a pooled investment fund, which provides members access to ownership of fractional shares in racehorses in Australia. Smart contracts will enable decentralised governance for both individual horses and the investment fund. A horse share market allowing owners to buy and sell shares in real time will provide liquidity to micro shareholders and the wider horse racing industry. The project will serve to promote inclusiveness and increase accessibility of racehorse ownership to a wider demographic.
Cardano Racing and Horse Stocks will fractionalise racehorse shares to lower the financial barrier to racehorse ownership in Australia. Compliance with the Australian Racing Board (ARB) minimum ownership requirements is achieved by offering fractionalised shares to owners, as a product of Cardano Racing Pty Ltd. A horse share market will be introduced to enable the real time trading of shares and will carry the added advantage of providing increased liquidity to the wider racing industry. Fundamentally, Cardano Racing is about inclusivity and presents an opportunity to revolutionise fractional ownership through decentralised governance. With the support of the community, Cardano Racing will make the “sport of kings” accessible to the masses.
Financial Barrier to Entry / Racing Syndicates.
Racehorse ownership is a privilege traditionally reserved for society’s wealthy and elite. Racing syndicates have successfully lowered the financial barrier to entry. The issue is that with the ARB enforcing minimum 5% shares starting at around $3,000.00, with $350.00 per month ongoing fees, the option of owning a Racehorse remains unattainable for most people. Syndicate operators are also burdened with the costs and frustrations involved with collecting monthly fees from syndicate members.
Centralisation of operations in racing syndicates limits investor choice and owner input. Horses offered to investors are pre-selected by the syndicate with the trainer already appointed. Decisions made throughout the career of a horse are regularly left to syndicate operators with owners having limited input.
Cardano Racing and Horse Stocks proposes to reduce the financial barrier to entry with minimum 0.001% shares, making racehorse ownership accessible to the majority. Monthly horse upkeep will be fractionalized proportionate to the percentage of total equity. Minimum account balances and automated payments will be utilised to solve the burdens and frustrations presently associated with the collection of monthly fees. An equity weighted voting protocol in conjunction with Initial Horse Offerings (IHO’s) and amalgamated bids will replace traditionally centralised management systems, giving owners control over which horses are available for investment and the decisions likely to impact a horse’s career.
Micro shares (i.e., 0.01% compared to a 5% share) in horse ownership have recently become available but are failing to offer scaled value to investors. Due to the complexities and costs associated with collecting fractionalized monthly upkeep fees, micro shares owners are charged upfront for anticipated fees for the life of the horse. Micro shares owners have little to no input into the management of a horse throughout its career. The lack of decentralization also limits choice, with investors limited to horses chosen by the syndicate’s operators.
Myracehorse.com is an existing micro share syndicate within Australia, which has opted to charge upkeep fees upfront as a solution to collecting monthly fractionalised upkeep fees. This solution is simple, while requires a proportionally larger upfront investment then traditional syndicates where a horse’s ongoing expenses are paid monthly.
By fractionalizing monthly/ongoing costs, Cardano Racing and Horse Stocks can offer scaled value to investors, avoiding the practice of charging in advance for anticipated costs. An equity weighted voting protocol and amalgamated user purchase algorithms, will empower owners and decentralize the decision making process on everything from which horse to buy, to which trainers and jockeys to use, to the horse’s name and any other decisions traditionally made by individual owners or syndicate operators.
Liquidity is an issue currently facing the wider horseracing industry. There is no easy way or well-established marketplace for trading in racehorse shares. Cardano Racing and the Horse Stocks will provide immediate liquidity to the micro-share market and permit traditional sellers to liquidate their equity in a horse (or a percentage of their equity) effortlessly through Initial Horse Offerings (IHO’s).
Australian Racing Board (ARB) minimum ownership requirements.
The Australian Racing Board (ARB) currently mandates that a horse has no more than 20 owners. ARB allow for shares to be owned by companies. Cardano Racing and Horse Stocks will create a pooled investment fund to act as the official owner of all horse shares to comply with ARB regulations, while still being able to offer fractionalized shares to customers as a product of the company.
Micro shares in racehorses offers an alternative to traditional betting for horseracing enthusiasts who enjoy having a financial stake in a horse’s performance. However, unlike gambling, the micro share model encourages more of a long-term, committed investment, where a successful horse investment becomes profitable through consistent performances and dividends over time. Those with gambling tendencies are often attracted to the possibility of winning significant sums of money, quickly, often risking more financially than they can afford. Cardano Racing’s minimum account balance requirements encourages investors to consider the affordability of their purchase at least 6 months into the future.
Cardano Racing & Horse Stocks
Cardano Racing Pty Ltd
Cardano Racing Pty Ltd (a registered Australian company) will be the custodian of all horse shares issued through Horse Stocks. Cardano Racing Pty Ltd will be registered as a pooled investment fund and will act as the horse’s official owner on behalf of shareholders in order to comply with minimum ownership requirements in the various racing jurisdictions of Australia. The long-term goal is to transition Cardano Racing Pty Ltd to operate independent of central management as a Decentralized Autonomous Organization DAO.
Horse Stocks is a live share market allowing people to buy and sell horse shares in real time. Each share will represent 0.001% of a horse’s total equity. For example:
If 100% of a horse’s equity is being offered for sale, 100,000 shares will be created. If the seller is offering 50% equity to the public, 50,000 shares will be created.
Owners will be required to pay a pre-set horse upkeep fee for each share held. Upkeep fees are deducted monthly from owner’s accounts and represent a percentage of actual costs proportional to ownership. For example, if a horse has monthly expenses of $7,000, each share will be charged .001% of total expenses or $0.07 per share per month. Upkeep fees will automatically be deducted from the owner’s account balance.
An owner’s account balance must have 6 months of upkeep fees available in order to purchase a share. Owner’s will be responsible for maintaining a sufficient account balance to cover upkeep. In the event an owner’s balance drops to $0.00, the account’s holdings (i.e., shares in horses) will automatically be liquidated with the sale value (minus fees) returned to the account owner. This will ensure that Cardano Racing has the necessary funds to pay monthly upkeep for all horses owned on behalf of shareholders.
Initial Horse Offerings (IHO’s)
When a seller wants to offer a horse or percentage of a horse for sale, Cardano Racing will conduct an Initial Horse Offering (IHO). In this process, shares in a horse will be offered to the community at a fixed price determined by the seller, before being made available to trade publicly on Horse Stocks. A minimum of 5% of the total equity will need to be offered and sold at IHO’s for a horse to be made available to trade on Horse Stocks. If a horse fails to reach the 5% equity threshold during the IHO, Cardano Racing will not be able to acquire a large enough share of the horse to comply with ARB standards and as such, any such IHO would be considered invalid with all funds returned to investors.
Horse Stocks will allow account balances to be held and payments to be made using the following currencies:
• Cardano Racing Token (ADAR)
• Cardano (ADA)
• Australian Dollars (AUD)
Additional currencies may be added in the future.
Inhouse currency exchange
In addition to the horse share market, Horse Stocks will host an in-house currency exchange with the following pairings:
Supported Operating Systems and Devices
Revenue Stream Description
Trade Fee A 1% buyer’s premium will apply to purchases made on Horse Stocks.
Management Fee A 10% management fee will be applied to monthly upkeep.
IHO Fee A 10% seller’s premium will be charged to all sellers at IHO
Withdraw Fee Withdraw fees may apply depending on the method of withdraw. We will endeavour to make fee free withdraw options available.
Payment Processing Fee Prize money, breeding revenue, and any other forms of revenue generated by a horse will be subject to a 3% payment processing fee.
Cardano Racing Token (ADAR)
Cardano Racing Token (ADAR) is the native currency of Horse Stocks and can be used to purchase shares, pay trade fees, and pay for horse upkeep. Owner’s will receive a discount when making purchases and paying fees in ADAR. A total of 200,000,000 ADAR will be minted upon the token’s creation with no additional tokens ever to be added to the overall supply. ADAR will be built on the Cardano Network.
A total of 200,000,000 ADAR will be minted.
80,000,000 ADAR for Cardano Racing founders and developers
120,000,000 ADAR will be offered at the ICO at a rate of 1 ADAR = AUD 0.05
The ICO will be conducted on the website cardanoracingtoken. io with the ADAR price fixed to the Australian Dollar. ICO Investments can be made with ADA and Australian Dollars.
The ICO will launch in the 4th quarter of 2021 and will remain open until the entire allocation of 120,000,000 ADAR has been sold. All ADAR (excluding founders tokens) will be distributed within 14 days of the conclusion of the ICO.
ICO Fund distribution
• 40% of funds will be allocated to the development of Horse Stocks and creation of its inhouse currency exchange.
• 30% of funds will be allocated to acquiring equity in racehorses to be listed on Horse Stocks.
• 10% of funds will be allocated to brand and community development.
• 20% of funds will be allocated to the Cardano Racing balance sheet for unforeseen and emergency expenses.
Founders Token Vesting Periods
To show our commitment to the long-term success of Cardano Racing, founder’s tokens will be released over a 4-year period following the schedule below:
Year 1 (12months after the completion of the ICO) – 20,000,000 ADAR released to founders
Year 2 (24 months after the completion of the ICO) – 20,000,000 ADAR released to founders
Year 3 (36 months after the completion of the ICO) – 20,000,000 ADAR released to founders
Year 4 (48 months after the completion of the ICO) – 20,000,000 ADAR released to founders
ADAR Utility and “Buyback & Burn” Policy
Account holders choosing to make purchases and pay fees with ADAR will receive the following discounts:
• 3% on IHO stock purchases
• 3% on monthly upkeep fees
• 50% discount on seller’s fees market sales (i.e., 0.5% instead of 1%)
To account for unforeseen circumstances and emergency expenses, Cardano Racing Pty Ltd will always hold 12 months of anticipated horse upkeep and operating costs on the balance sheet. All additional profit generated by operations will be used to buyback and burn ADAR, which will make ADAR a deflationary token with circulating supply decreasing over time.
Cardano Racing Decentralised Autonomous Organisation (DAO)
The first objective of Cardano Racing is to promote inclusivity and provide liquidity through the creation of the Horse Stocks live share market. Future updates will serve to increase decentralisation over time. The decision-making process for which horses will be added to the platform will initially be decentralised through IHO’s. If the community decides the horse being offered is overvalued or is not suitable for listing on the platform, the shares will not sell at IHO, and subsequently, the horse will not be listed on Horse Stocks. Further decentralisation can be achieved with the proposed future development of amalgamated purchasing.
Live horse auctions are usually broadcast online and offer online bidding. Cardano Racing and Horse Stocks aims to introduce functionality, which would allow investors to collectively determine Cardano Racing’s maximum bid at a live auction. By amalgamating user’s personal preferences (i.e., maximum bid and share size) Horse Stocks will be able to determine the maximum bid of the Cardano Racing community as a whole and participate in the auctions, on behalf of the community.
For horses where Cardano Racing collectively owns 100% equity, decisions about the trainer, jockey and races the horse enters will be decentralised, with an equity weighted voting system. In this process proposals will be submitted by and voted on by owners. Any owner can submit a proposal for consideration. 1 share equals 1 vote.
Following successful horse acquisitions in Australia, Cardano Racing plans to expand the stable internationally, creating diversity, equality, and inclusivity for those seeking ownership of a horse globally who have experienced restrictions (e.g., legislative and/or financial) in acquiring a horse. A goal of Cardano Racing is to use the pooled purchasing power of a strong community of smaller investors to become a global powerhouse in the sport of horse racing.
Expansion Into Greyhound Racing and Harness Racing
Cardano Racing may expand into greyhound racing and harness racing depending on demand.
Operating a pooled investment fund without proper knowledge of your customers would likely bring eventual scrutiny from government both in Australia and in countries targeted for expansion. Horse Stocks accounts will only be eligible to withdraw funds after satisfying Know Your Customer (KYC) requirements to comply with Anti Money Laundering laws.
MyRacehorse. com is the main competitor in the Australian market to Cardano Racing and Horse Stocks; while Myracehorse. com have secured the first mover advantage, their “fees upfront” business model fails to offer investors scaled value. Centralisation of the horse’s management prevents owners having any significant impact concerning decisions made about the horse’s career. The selection of horses is limited and there is currently no secondary market or process for owners to sell the shares they have purchased.
The success of Horse Stocks and Cardano Racing will likely result in competitors emerging both on the Cardano network and alternative networks. The presence of competitors will encourage Cardano Racing to innovate and identify ways in which to add value to ADAR investors and horse owners to promote growth and sustain market share.
Invitation to join the community
Cardano Racing will strive to be a servant of the community. All suggestions, criticisms, and inquiries are welcome. Help us build the future of horse racing and join the discussion in the Cardan Racing discord group.