# kaal:claim:5583610-021

**Claim.** The fourth Howey prong fails because LER accrual is automated by smart contract and driven by the shareholder's own decision to keep holding, leaving the issuer's role ministerial rather than entrepreneurial.

**Type.** mechanism  **Support.** argued

**Holds when.**

- reward amounts are not subject to issuer discretion

**Source quote.**

> LER voucher rewards are driven by stockholders' efforts in maintaining stock ownership for a certain time period. LER accrual is automated via smart contracts and does not rely on LER's ecosystem, merchants, or issuers' managerial efforts.

**From.** Wulf A. Kaal, *Liquid Equity Rewards in Corporate America* (2025), 3.2. U.S. Securities Regulation, page 13

**Cite as.** Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Topics.** smart-contracts, securities-law

**Keywords.** efforts-of-others, smart-contracts, ministerial-role, howey-test

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