Facilitating ESOPs On The Blockchain

Newrl enables tokenization of equity to issue ESOPs, raise funds and improve governance through smart contracts, making startup equity a more liquid asset class provides greater access, liquidity and transparency to new age investors and startup employees.

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Technology has taken over the world and the time of human beings. Blockchain is one such innovation that has become a buzzword more so with the advent of Web3 closing rapidly. A blockchain stores information electronically in digital format and is a distributed database that is shared among the nodes of a computer network.

Company
Swapnil Pawar, founder, Newrl

Newrl recently launched tokenized based equity solutions for unlisted companies and is India's first Web3 innovation for ESOPs solutions for startups. The platform enables tokenization of equity to issue ESOPs, raise funds and improve governance through smart contracts, making startup equity a more liquid asset class that will provide greater access, liquidity and transparency to new age investors and startup employees. The company wanted to create a solution where non-crypto traditional instruments could also be integrated with the web3 environment.

"We started by creating our very own layer 1 blockchain solution which does sometimes compromise on the flexibility and versatility of other popular chains but provides way better performance and usability for specific solutions," said Swapnil Pawar, founder, Newrl.

Newrl is built around the three cores of trust, legalization and liquidity. Swapnil believes that mainstream finance does not need the versatility and flexibility offered by other public blockchains, but needs a solution that is implementable in a way that transactions can be carried out most simply and cheaply.

The company is focused on improving the trust in its system by incorporating the KYC solution on-chain to solve for the identity of the users and compliance with all the laws prevailing in different jurisdictions. In addition, Newrl focuses heavily on the legal aspects of its chain to help its application layer partners be at use with their blockchain usage, unlike other public blockchains focused on the tech aspect.

"We are an ecosystem of intermeshed blockchains that are highly interoperable but sovereign in their own choice of integration with the main chain and other chains. The main chain is the core where most people and the trust networks reside. Most DAOs are also on it. Other chains cater to their specific segments and interact with the main chain either very deeply - like a side-chain - or as a notary service, posting only block hashes and nothing else," added Swapnil.

The major challenges for the company lie with the legality, especially in the Indian context which affects the adoption of firms who are keen to try out the web3 offerings but unsure about the laws around it. Swapnil thinks that once India has a set of laws detailing the blockchain ecosystem, it would make the adoption a lot easier throughout the industry, quite like the UPI boom that took place after its introduction by the Indian government.

"People can transact their ESOPs (vest/exercise) directly via a simple smart contract which makes this offering attractive to the new-age demographic. Also, they can trade the tokens for their ESOPs on the exchange, creating liquidity for them and also allowing other investors to own a part of the firm directly. Thus, this would help create liquidity in a market that has traditionally been illiquid since time immemorial," commented Swapnil on how people can use Newrl.

Newrl aims to break into multiple sectors as well as industries ranging from finance for securitization and tokenization solutions, real estate to tokenize properties, government institutions for smart contract solutions, car and gold financing, micro banking, agriculture and more.