Revealing the GET Protocol Event Financing Module
Today we are excited to be introducing our Event Financing Module into the growing portfolio of products on offer through GET Protocol, which will be available through a curated Wait List available on our website.
The Event Financing Module offers a way for small, independent ticketing companies to access financial tools usually reserved for only the largest players. This is possible through the power of decentralized finance by providing enough liquidity pooled from the masses to act as a backstop for event loans. Through financing, event organizers are able to get the capital needed to produce their events while making certain that investors are satisfied through ticket-backed bonds. Let’s break it down and take a look at exactly how this will work.
Financing is an integral part of the proposition of a ticketing company.
The ticketing deals you want as a ticketeer, will involve some kind of financing that previously only the monopolistic ticketing companies had the liquidity required to finance and offset the risks. Only a few ticketing companies are large enough to convert the loans they provide into bonds they can sell to investors, thereby recouping the investment.
Due to this it was incredibly difficult for ticketing companies to compete with the giants, making them easy bait for acquisition.
This event financing module is designed to democratise finance, with DeFi, allowing small/upcoming ticketing companies to access the liquidity of the worldwide DeFi market.
The GET Protocol Foundation builds tooling for our integrating partners and event financing is no different, becoming another potent arrow in the quiver of advanced tooling we can offer ticketers. This feature is meant to drastically improve the competitiveness of their offerings to event organisers and artists and more importantly act as the moat our ticketing partners can employ to lock in more business via tokenizing tickets and turning them into bonds, which can then be sold for USDC stablecoin.
The ticketing game 2.0 is littered with politics and money. Oftentimes the privilege to sell tickets is forced upon organizers (content creators) through vertical integration of the value chain. If that isn’t the case the decision is made based upon who can put money on the table. Therefore, to become the data standard, GET Protocol needs to remove the barriers of politics and money by providing tools to democratise the value chain and being able to fund those ambitions.
When push comes to shove it’s the content creators who bring in the crowds and thus should have the ultimate authority. Unfortunately a lot of effort has been made to make sure content creators can't act as such. By enabling content creators to sell their own tickets, monetize the secondary market and own their data to build communities in a transparent way, we've laid the groundwork to release the events industry from the political iron grip of monopolistic players.
Now GET Protocol introduces the next piece of the puzzle for creators to finally act independently and bring ticketing to the next level. In case you were wondering, 3.0 that is.
Today we announce the democratising of event finance through DeFi, allowing independent players to access the liquidity of the worldwide DeFi market and not be dependent on the powers that be to make events happen. By tokenizing future revenue of events we truly bring web 3.0 to the industry and remove the most important barrier for democratisation. Creators are no longer dependent on a boardroom decision if their careers will take off, now they can put money where their mouths are, quite literally.
Event financing will soon be available for all our Ticketing Partners. This means ticketing companies, promoters and artists who wish to sell tickets under their own banner.
While event financing in traditional finance is usually handled through direct, person to person contact, defi lending operates quite differently with most interactions happening by interacting with a smart contract on the blockchain. The chart below should help clarify this distinction.
It is quite viable that eventually DAOs will also be able to take the role of Importers, albeit for the coordination and/or ease of risk and benefit sharing abilities - or just purely for the merits of specialisation.
Ticketing companies that have integrated with GET protocol are able to pre-mint ticket inventory. These pre-minted NFT tickets will be ‘bundled’ on top of an index NFT (which we've given the name inventoryPallet). From that point on, the owner of this single NFT will hold all transfer rights for thousands upon thousands of tickets enabling the next phase in the process which is to use this inventoryPallet to issue a bond.
The bundle of pre-minted NFT Tickets that now exist in the inventoryPallet can be used by ticketing companies to issue bonds called an inventoryBonds.
Keep in mind that a ticketing company will need to regain control of the inventoryPallet, otherwise they will not be able to service their event organiser clients properly. This dynamic is similar to a landlord that is renting out a house, to keep the rent revenue going, there is an incentive to pay the landlord's mortgage - otherwise the landlord will lose a revenue generating asset.
The issued bonds are themselves also NFTs and there can only be one owner of an inventoryBond. The holder of the inventoryBond will receive the bonds face value plus interest when the ticketing company redeems & repays the bond. Bond redemption must occur before a pre-defined point in time that is set at an immutable block height otherwise the liquidation mechanism will be activated.
Just like how in traditional markets bonds come in many forms with their own unique set of terms and conditions, so do inventoryBonds. However, in all cases bonds are intended to be redeemed. If a bond isn’t redeemed this will have consequences for the issuer (the ticketing company) and also downstream to the asset originator.
Failure to redeem an inventoryBond will most certainly entail the inability for the tickets locked in the inventoryPallet to be scanned. Bond terms can even dictate that none of the tickets of an importer can be sold.
It is at this point in the system where the beating heart of the protocol comes in to play - the GET Token. For those unfamiliar, GET is a ERC-20 token native to GET Protocol that fuels each and every ticket through the protocol with on-chain transparency of value flows and activity. Integrating partners handle GET behind the scenes, ensuring an event attendee can purchase a ticket and attend an event seamlessly without needing knowledge of NFTs, blockchain or cryptocurrency.
For the Event Financing Module, a ticketing companies staked GET will be seized and distributed to the bond holder, the palletNFT (so the NFT the tickets where stacked on) will be burned - also burning the GET used to mint the palletNFT.
The inventoryBond liquidation system and the disincentives around it will be discussed in detail in the future. The key takeaway is that we use a combination of economic, reputational and technical incentives to keep importers in line.
As with all our offerings, the GET token plays a major role in the underlying operations. The ways the GET token intertwines in the Event Financing Module is going to grow in exciting ways over time, but for now it works at two points:
The GET DAO is in part being funded through GET reimbursements distributed through the event financing via a token spread on the borrowed loan, a royalty fee on the pallet at both mint and redemption, and a penalty collection whenever a bond is liquidated.
Ticketing Companies and underwriters both must lock GET as a financial honesty mechanism, and importers must lock GET when minting the pallet NFT (an essential piece of this entire product).
Together, these two mechanisms ensure that GET remains an integral part of all product offerings across the board and continues to act as a fuel powering the next generation of ticketing experiences.
All in all, we believe event financing is a powerful tool that enables the next generation of events to become platformed when they might otherwise be overlooked. Through the issuance of the bond, the ticketers are able to finance otherwise impossible events leading to more presales, more events, and bigger events overall. Investors will also have new key points of data to impact their personal thesis towards the protocol and will be able to trade on yet another decentralized ticketing utility in the event space. As always, this day marks yet another first mover advantage for us, solidifying GET Protocol’s place as an industry leader in blockchain ticketing.
Our Event Financing Module will be rolled out through a Wait List over the coming several months with pilots revealed over time. You don’t want to miss this one. Be sure to explore our event event financing page and register your interest.
Since 2016 we have been building ticketing infrastructure powered by the latest technology to upgrade the experience for all in the ticketing chain.
Ticketing companies of all sizes use our infrastructure to get clearer insights, generate greater revenue and maximise the connection through their tickets.
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