Ed Cotler on What an Assets and IP ‘eBay on Blockchain’ with LEXIT Would Look Like

While the first part of Ed Cotler’s interview covered his illustrious career in top banking companies as well as his new advisory for LEXIT, in this article he discusses how the trade of assets would work on blockchain.

“[With the] difficulty of selling something that is unique and very specific, and also the difficulty in buying something unique and interesting, comes a classic challenge,” Ed says.

“Where do I go? What business broker do I call? Which website is reliable? It’s a very hard problem to solve but this is where LEXIT comes in: to create the eBay of buying and selling businesses, patents, and IP.”

Unlike eBay, LEXIT seeks to provide inbuilt quality control whereby experts are incentivized to give good advice through a reward of LXT tokens that scale according to the reputation that they build.

This is a mechanism whereby experts join the platform to review the goods and services, business plans and ideas that are going to be traded there, and it follows that reliable expert opinions see greater rewards as they help to build trust in the marketplace.

“That’s where I think the blockchain concept comes in very well. If LEXIT didn’t have blockchain then they would have to raise a lot of money to pay experts in cash,” Ed says on the value of experts, “If someone has worked at a major bank for twenty years and is asked to read a business plan, I’m thinking what is the price of that? Are you going to pay someone $1,000 an hour?”

“That’s not a scalable model.”

Experts who join the platform early could stand to gain the most; by giving consistent reviews that are favourably received by the community, they will gain more LXT tokens which could stand to gain in value as more users join the platform. Specifically because there is a finite amount, a “gold standard” in Cotler’s view, of LXT tokens available for purchase.

If the ecosystem on LEXIT sees wider adoption, the value of that ecosystem goes up which boosts the LXT economy as well. This is a strong motive for experts to work to foster trust in this network economy.

“This is a way to use blockchain that is innovative, and actually solves a real world problem and addresses the question of how to get trust in the system and pay people for their helpful opinions while weeding out the unhelpful.”

“A review that you write for LEXIT as an expert will continue to create value for months and years after you’ve received tokens as payment. I think that’s incredibly unique and answers the key question of ‘why blockchain?’ Because how would you do it without blockchain?”

“You could technically do it with very thick and customized legal contracts and it wouldn’t be elegant or simple. Everyone would have to get a lawyer every time they sign these documents, there would be a lengthy and expensive negotiation process—it wouldn’t be scalable, but with blockchain it’s scalable.”

The Potential Global Reach of LEXIT

LEXIT’s platform aims to help new businesses but also many existing companies who may have unfulfilled intellectuals property. It’s a fragmented market which leads people to small business brokers and patent agents, who might not have the expertise to properly represent a business.

This is severely limiting as potential buyers are those that exist in that person’s network or a broker’s own personal network.

“LEXIT will take that global. If I want to go into the ice cream business, do I start my own or buy an existing one and revamp it? [With LEXIT] you can just go online and search.”

“You don’t have that right now, it’s a very difficult and opaque market which has a lot of price inefficiency.”

Adoption is key to LEXIT: a key tenet of the platform is to drastically increase the pool of potential buyers for any given listing. But with that comes the low-risk model of customer adoption. A listed asset or patent can also be listed elsewhere and, at worst, on LEXIT it will just be seen by the user base and not purchased.

“If we bring you a buyer then we bring you a buyer, but [even if not] it’s a less risky way. Not every transaction is a success, not every single one should be. But what’s the downside to a seller of thousands more people around the world having a look at their business?”

“I feel that once something is out there publicly, that anyone in the world can look at it, it can only increase the buyer base. What I think will happen is that, as LEXIT gains steam, the traditional channels will start using LEXIT.”

“The business brokers themselves can log in and find a business available for sale and bring it to their client base. They can help clients list their business on LEXIT as part of their service contract. There’s absolutely no downside to the market with increased liquidity.”

This seems to be the key: the need is there, as is the potential utility and value of the LXT token—what remains to be seen now is whether the media narrative and public perception can shift from the macroeconomic Bitcoin-dominated focus.

If it can, then startups and the wider business community may find LEXIT to be the one of the most convenient and useful innovations in recent times. If it can attract enough listings and experts to the platform, then it may revolutionize how companies trade assets and ideas.

To read the first part of  Ed Cotler's interview click here.

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