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Spencer Dinwiddie plans to use contract as collateral for larger investment potential

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Shams Charania reports that Spencer Dinwiddie intends to use his three-year, $34 million contract as an investment vehicle, essentially selling bonds in himself to give him a much larger pool of money to use now.

Here’s how The Athletic writer describes these “Dinwiddie Bonds” would work...

In a securitization, the borrower gives up some future income in return for a smaller lump sum payment. But the borrower, in this case Dinwiddie, then has more money to immediately invest than he otherwise would.

A token is a digital currency term. The bond exists in the digital currency world. Instead of buying the bond from a broker, it is through a token.

According to sources, this Dinwiddie bond would pay investors principal back and interest, which would be covered by what the Nets owe him.

Dinwiddie has talked frequently about investing in Bitcoin and about crypto-currencies in general,

There are questions, like how would Dinwiddie’s player option in year 3 of his deal be affected; how much of his contract would he set aside; and how it fits into the collective bargaining agreement. A spokesman for the players union said Dinwiddie informed it of the plan last week.

Charania suggests that the risks are small in that the money is guaranteed under most circumstances and the NBA isn’t going anywhere.