Today in a Facebook Note (…not a Libra. org blog post), Marcus wrote “The levels of investments of each of the partners will most likely be public as well when that’s actually live. ” But that’s far from a guarantee, and could come too late for regulators to intercede or other members to truly understand the assymetry.
But if Facebook puts in $500 million and another member like eBay antes just the $10 million minimum, Facebook has a much bigger incentive to get people cashing into Libra and holding onto the cryptocurrency so the Reserve earns interest on those dollars or other fiat, rather than just getting people to transact with it regardless of whether they hold on to Libra permanently.
Meanwhile, Marcus also said that “We’ve been basically lending money to the association that will be at some point repaid back. ” That raises another question of how much Facebook has already sunk into the Libra project, how much it expects to be repaid, on what schedule.
If regulators allow it to launch after today requesting a halt of development, and the cryptocurrency grows popular with tons of people cashing in local currencies for Libra, the Reserve that holds those assets could grow huge and generate meaningful returns via interest — especially for members willing to sink a ton of money in early.
That means if that if at any time Facebook disagrees so strongly with the Libra Association that it threatens to pull out, it jeopardizes the investment of all the other members.
Marcus wrote today that “If Libra is successful, Facebook will first benefit from it by enabling more commerce across its family of apps.
Yet Facebook, for all its talk about transparency with Libra, refused to tell me how much it’s invested into the Libra project as a whole or the Libra Investment Token.
That’s not to mention the other ways Facebook will earn money from Libra.
Members who’ll verify transactions can opt to invest more in exchange for more Libra Investment Tokens that will earn them dividends from the interest earned by the Libra Reserve after it pays for infrastructure and operations costs.
The fact that Facebook oversees development and has a massive head start on building its wallet that will be baked into its billion-plus user Messenger and WhatsApp products sure doesn’t hurt its prospects for offering other financial services.
Ahead of the Libra announcement two weeks ago, Facebook’s head of blockchain and now Calibra David Marcus told me “The reserve earns interest on some of those treasuries.
Each Libra Association member only gets one vote on the council, including Facebook .
The proportion of the total Libra Investment Tokens that Facebook owns in part determines how decentralized Libra really is.