Illiquidity

Illiquidity refers to the inability to quickly or easily convert an investment into cash without a potentially significant loss in value. In the context of Channel Revenue Tokens (CRTs) on GigaStar, illiquidity is one of the most important risk factors for Investors to understand before committing capital.

Under SEC Regulation CF, CRTs are subject to a mandatory 12-month holding period from the date of purchase. During this period, Investors generally cannot sell or transfer their tokens. This means that capital invested in CRTs is locked up for at least one year, regardless of changes in the Investor's financial circumstances or the Creator's channel performance.

After the holding period expires, CRT holders may have the opportunity to sell their tokens on the GigaStar Secondary Market, an alternative trading system operated by GigaStar Securities. However, the ability to sell is not guaranteed. Secondary market trading depends on there being a willing buyer at an acceptable price. If no buyers are available, or if the bid prices are significantly below what the holder paid, the CRT may effectively remain illiquid even after the holding period ends.

Several factors influence CRT liquidity on the Secondary Market. Trading volume, the number of active market participants, the Creator's current performance and popularity, and overall market conditions all play a role. CRTs for well-known Creators with strong revenue histories may attract more trading interest than those for smaller or newer channels.

Investors should treat CRT investments as long-term commitments and should not invest funds they may need to access in the near term. The speculative nature of CRTs, combined with potential illiquidity, means that Investors should be prepared for the possibility that they may not be able to sell their tokens when they want to, or at a price they consider favorable.