# kaal:claim:3949098-014

**Claim.** In a firm commitment underwriting deal whose public portion does not sell out, a member is forced to sell reputation non fungible tokens on the over the counter market to satisfy the resulting capital call, but only if that member cannot cover the pro rata capital requirement with liquid capital.

**Type.** failure  **Support.** argued

**Holds when.**

- firm commitment underwriting deals
- public portion undersubscribed
- member lacks liquid capital

**Source quote.**

> the inability to sell out the public portion of the firm commitment deal, the respective RNFT member is forced to sell RNFT on the OTC market only if the respective ICD member cannot satisfy his or her pro rata capital requirement with liquid capital held by the ICD member.

**From.** Wulf A. Kaal, *Reputation as Capital – How DAOs Upgrade Finance* (2021), II. Basic Concept, 2. Liquidity, page 9

**Cite as.** Wulf A. Kaal, Reputation as Capital – How DAOs Upgrade Finance (2021). SSRN: https://ssrn.com/abstract=3949098

**Verify.** sha256 of source PDF `04297905564a6092b2db7640561f58fd374d3114c79527357bad09d11b909819` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Reputation%20as%20Capital%20%E2%80%93%20How%20DAOs%20Upgrade%20Finance.pdf

**Failure mode.** Forced RNFT Liquidation On Undersubscription  (family: token-transferability-defect)

**Topics.** defi, economics

**Keywords.** firm-commitment-underwriting, forced-sale, otc-market, capital-call, rnft

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