DS

Diamond Standard Financial Model

• Diamond Standard Coin / Bar: Physical commodity containing an equivalent, fungible set of natural diamonds selected via statistical geological sampling. Each unit includes a wireless chip with a blockchain token (Bitcarbon) - a vault receipt enabling instant digital transfer. CME-approved custodians hold physical inventory.
• Smart Commodity: Simultaneously physical and digital; token ownership = physical commodity ownership, available for immediate delivery.
• Diamond Standard Exchange: World's first electronic loose diamond exchange. Automated market-maker bids on 16 million diamond types weekly, buying from registered B2B vendors (GIA/IGI clients). No consumer purchases. COD, no returns.
• Diamond Standard Recycling: In preparation at time of deck - consumer-facing channel to source diamonds from used jewelry via FedEx with instant payment; expected to improve margins vs. wholesale sourcing.
• Bitcarbon: Blockchain token representing ownership of the physical commodity; anticipated to trade on crypto exchanges (Q1 2023 target per deck).
• Diamond Standard Fund: Launched July 2022 with Horizon Kinetics.
• Listed DS Fund / Futures / Options: CME Globex listing approved via MGEX (CFTC); MIAX Options listing approved. Status as of deck: in development.

• Total above-ground diamond supply (TAM proxy): $1.2 trillion
• Current investor allocation to diamonds: ~1–2% (Building Phase) vs. 15–33% for precious metals
• Gap opportunity to reach 15% investor allocation: ~$180 billion at 2022 market prices
• Diamond market 2033 projected total value: $5 trillion
• Sole-producer revenue potential: >$250 billion over time as prices build
• Annual diamond supply chain size: $40 billion
• Comparable precious metal markets for context:
• Gold total supply: $9T, 32% investor allocation
• Silver total supply: $1.1T, 19% investor allocation
• Platinum total supply: $0.03T, 17% investor allocation
• Palladium total supply: $0.02T, 15% investor allocation
• Note: All market figures are company estimates sourced from industry analysts; deck cites reliability caveat.

Revenue streams implied by the deck (none priced explicitly):

1. Commodity issuance spread: Buys diamonds wholesale via exchange at market-maker prices; assembles and sells Coins/Bars at a premium to investors and dealers through a primary dealer auction structure.
2. Primary dealer / distribution margin: Investors buy Coins directly or through dealers who purchase via primary dealer auctions - Diamond Standard earns margin on this channel.
3. Exchange / market-maker fees: B2B diamond exchange charges implicit transaction fees (exact fee schedule not in deck).
4. Diamond Standard Fund management / sponsorship fees: Fund launched with Horizon Kinetics - revenue share or sponsorship fee structure not disclosed.
5. Futures & options listing/sponsorship fees: CME/MIAX-listed products; fee structure not in deck.
6. Recycling margin: Buy used consumer diamonds below replacement cost; capture spread vs. wholesale sourcing channel, improving Coin production margin.
7. Bitcarbon / crypto trading: Token to trade on crypto exchanges; revenue model not specified.

• Diamond Standard Fund: Launched July 2022 with Horizon Kinetics
• Initial spot commodity offering: "was a success, providing the 'good for delivery bar'" - no revenue or AUM figures given
• CME Globex listing: Approved via MGEX (CFTC)
• MIAX Options listing: Approved
• Commodity production capacity: Can use 94% of gem-quality diamond varieties; bids on 16 million diamond types
• Minimum buy volume: At least 10,000 diamonds per buy
• Diamond threshold: Stones above $750/stone must be GIA graded; below $750/stone graded and ungraded accepted
• ESG projections (company estimates, not verified traction): 85% of future commodity diamonds projected to be recycled; $150B projected societal dividend; 1,000+ global jobs; 8 intake centers
• No revenue, AUM, customers, GMV, or growth rate figures disclosed.

Implied margin structure: wholesale diamond purchase cost → assembly + logistics + grading → Coin/Bar sale price. Recycling channel expected to improve margins but no quantification provided.

• Stated moat:
• First and only regulator-approved fungible diamond commodity (BMA Bermuda Monetary Authority license)
• Only electronic loose diamond exchange; forces price discovery on weekly basis
• Proprietary geological equivalence optimizer - ensures every Coin/Bar exceeds 100% of the public geological standard
• Provenance recorded on blockchain; audited by Deloitte
• CFTC and MIAX approvals obtained for futures/options
• Competition: Not addressed in deck. No competitor slide.
• Key strategic partners: GIA (grading), IGI (inspection/assembly), CME (futures), MIAX (options), Horizon Kinetics (fund), Davis Polk (legal), Goldman Sachs and Morgan Stanley (in development for Bitcarbon)

• Cormac Kinney - Founder & CEO: Serial fintech entrepreneur, 4 exits to public companies/funds; raised/managed >$600M capital; Carnegie Mellon (3 degrees); invented trading heatmaps; managed >$500M for Tudor and Millennium.
• Org chart: Risk & Compliance (Corey Reason), Markets (Douglas Jordan), Marketing & E-Commerce (Chris Dessl), DSAM/Institutional Sales (Mark Lieberman), Operations (John Betts), Finance (James Campbell), Development (Rajiv Sohal). Kyle Denbrook listed without title.
• Prior raises: Not explicitly stated; CEO bio references managing >$600M (historical, at other firms).

• Archetype + why: Commodity issuance + financial infrastructure P&L - analogous to a precious metals ETF/commodity sponsor combined with a marketplace. Primary driver is commodity AUM / units outstanding × spread, layered with exchange fee revenue and fund management fee income. Not a SaaS or DTC model; closest analog is a commodity trust sponsor (e.g., SPDR Gold Trust economics) combined with an exchange operator.
• Forecast horizon & granularity: 5 years (Year 1–5), annual; Year 1 monthly if near-launch data becomes available. Quarterly is appropriate given lumpy product launches.
• Key drivers & assumptions:
• Coins/Bars issued (units): Starting point unknown - begin with Year 1 pilot volume
• Diamond cost as % of Coin price:
• Recycling channel ramp:
• Fund AUM: Diamond Standard Fund launched July 2022; AUM unknown
• Fund management / sponsorship fee:
• Exchange transaction volume (B2B):
• Exchange take rate:
• Futures/options listing fees:
• Diamond market investor allocation: Current 1–2%; 15% long-run target; TAM $1.2T today → $5T 2033
• Revenue opportunity to Diamond Standard as sole producer: Company states >$250B potential; model conservatively at 1–2% market share capture of AUM/units outstanding
• Opex: Headcount-driven; ~8 senior leaders visible;

• Scenarios (Base / Bull / Bear - which variables flex):
• Bear: Slow institutional adoption (fund AUM $50M by Year 3); no Bitcarbon launch; recycling channel delayed; commodity issuance < 5,000 coins/year; exchange limited to current pilot vendors
• Base: Fund reaches $250M AUM by Year 3; futures/options attract moderate open interest; recycling channel contributes 20% of supply by Year 4; commodity units grow steadily
• Bull: Institutional allocation accelerates toward 5–10% of investment allocation target; fund >$1B AUM; Bitcarbon trades on major crypto exchanges; recycling channel dominant; futures liquidity attracts major asset managers (BlackRock, Vanguard)

• Required sheets / outputs:

1. Assumptions - all drivers (commodity volume, spread, AUM, take rate, recycling mix, opex)
2. Commodity P&L - units issued × price × spread − cost of diamonds − assembly/logistics/grading = gross profit per period
3. Exchange Revenue - GMV × take rate
4. Fund Revenue - AUM × management fee
5. Bitcarbon / Other - placeholder until disclosed
6. Consolidated P&L - all revenue streams, opex (by department per org chart), EBITDA
7. Cash Flow - diamond inventory is working capital; COD payment terms; Coin/Bar as inventory
8. Balance Sheet - key: diamond inventory on balance sheet; token liabilities (vault receipts outstanding)
9. Market Sizing Bridge - shows path from current 1–2% → 15% investor allocation and how Diamond Standard captures that flow
10. Scenario toggle - Bear/Base/Bull on key drivers