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A new generation of tokens is constantly emerging. If 2017 is the spring of functional tokens, the sign of 2018 will undoubtedly mean the birth of a new platform, exchange and fund ecology, all of which are aimed at the trillions of securities asset tokenization dollar market.
Lured by blockchain technology, tokenization is gaining traction among more traditional issuers and investors, not to mention crypto asset giants, who look to this avenue to hedge against high volatility asset positions.
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What are Security Tokens?
Often these tokens represent an interest in an underlying asset, which typically includes real estate, cash flow, or other fund holdings. These interests are written into smart contracts and tokens can be traded on blockchain-backed exchanges.
Some advocates claim that such bonds will soon become so popular that traditional stock markets and over-the-counter exchanges will be completely replaced within the next decade.
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Why engage in tokenization?
The benefits of tokenization include fragmentation of large assets, greater liquidity, lower insurance costs and greater market efficiency.
Compliance with SEC regulation is a more acceptable organizational structure for institutional investors, and technological innovation for crypto asset investors, which is quite attractive to both investment forces.
Learn a new word: STO, Security Token Offering, similar to ICO for utility tokens.
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If you want to tokenize your companys next round of financing, please spend six months first hiring financing consultants, lawyers, and engaging with some platforms. After everything is on the right track, your company will spend two months working with financing consultants and legal consultants to create a specific tokenization structure, compile marketing materials, spend one month running in with the technology platform for listing, and three months for traditional investment Institutional and cryptocurrency investors conduct roadshows.
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Stills of the American TV series Billions
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Polymath
https://www.polymath.network/
Token platform
These currency issuance platforms include both open source blockchain protocols that have high technical requirements for the currency issuance team, as well as professional institutions that provide one-stop solutions and consulting services
Polymath is a blockchain protocol for the origination and issuance of legally compliant tokenized securities. The agreement embeds financial regulatory requirements in the design of new security tokens, and can seamlessly create financial products on the blockchain.
Token issuing companies or teams can trade security tokens, authenticate investors, match up with judicial advisors, and connect to the developer market through the Polymath platform.
The platform uses ERC20 native tokens as the underlying commodity unit of account that connects customer authentication, legal services, and developer services.
Amount Raised: $59M USD ICO
Harbor
https://harbor.com/
Management: Trevor Koverko CEO, entrepreneur, blockchain speaker and cryptocurrency investor
Advisors: Anthony Diiorio, co-founder of Ethereum, CEO of JAXX Wallet, Steven Nerayoff, working for a well-known accelerator and venture capital firm Alchemist Ventures, Patrick Byrne, CEO of Overstock, a large American e-commerce platform.
Harbor is an open source platform that allows traditional investment institutions to seamlessly access the blockchain.
Harbors set of standardized processes can ensure that the target enterprise transfers traditional investment assets to the blockchain step by step under compliance conditions. Through a method called Private ICO Private Placement ICO, PICO, Harbor can provide private placement sales that comply with Regulation D of the US Securities and Exchange Commission and incorporate new token R-Token licensing technology. Its standardized processes include KYC/AML know-your-customer/anti-money laundering compliance services, taxation principles, information disclosure, and the evaluation status of each token generated through the system, among others.
Securitize
https://www.securitize.io/
Amount raised: $10 million in Series A financing
Management: CEO of David Sacks, general partner of Craft Ventures, formerly COO of Paypal, founder of Yammer, CEO of Zenefits, Bob Remeika CTO, former vice president of Zenefits, Arisa Amano CPO, former CEO of Zenefits Vice President.
Securitize provides regulatory compliance cloud service solutions for securities tokenization, allowing funds, companies or other economic entities to successfully tokenize.
The company provides a number of services, including providing judicial and regulatory compliance preparations for issuers and their legal teams, helping investors comply with KYC/AML certification and other judicial rules, customizing smart contracts to match the unique needs of issuers, and Safeguard all data during the duration of the relevant security token.
Swarm Fund
https://swarm.fund/
Securitize is a new company spun off from SPiCE VC, a venture capital institution. It has reached ICO commitments with a number of companies, with a total value of more than 500 million US dollars, including CryptoOracle, Kairos.com, Lottery.com and 22X Fund.
Management: Carlos Domingo CEO and Chairman, Managing Partner of Spice VC, former CEO of Telefónica RD Department, Jamie Finn President, former executive vice president of business development in Aki, communication giant ATT, Kontera and Telefónica, Shay CTO of Finkelstein, CTO of SPiCE VC
Swarm leverages the SRC20 protocol to tokenize real-world assets. The tokenized subject becomes an asset that can be easily managed, governed and traded on the Swarm blockchain.
Swarm Invest, established in January 2018, provides external investors with opportunities to invest in securitized assets. Individual investors can use SWM, Bitcoin BTC and ETH to invest in real-world assets. Investors get SRC20 tokens and obtain ownership and governance rights. These tokens can be legally traded in a regular manner. The project also plans to enable fiat currency investments soon.
The underlying assets mainly include real estate, renewable energy companies, technology companies, cryptocurrency investment funds, impact investment development projects and post-disaster reconstruction, infrastructure and other projects.
Management: Philipp Pieper CEO, Timo Lehes Chief Investment Officer, Chris Eberle Chief Operating Officer
Well-known advisors: Anthony Di Iorio, founder and CEO of cryptocurrency wallet companies Jaxx and Decentral, co-founder of Ethereum, chairman of Chris Kitze digital currency investment fund Alphabit, David Drake founder and chairman of multi-family wealth management company LDJ Capital .
Templum
https://www.tradetemplum.com/
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hybrid solution
Templum is an agency that provides compliance solutions for the issuance and secondary market trading of security tokens. Templum Markets, formerly known as Liquid M Capital, is a qualified alternative trading system ATS and brokerage firm acquired by Templum for $1.3 million.
On the Templum platform, it is possible to issue security tokens and invest in the secondary market by issuers and investors. Like other solutions, Templum has built-in AML/KYC certification services to ensure the platform is compliant with regulations.
Securrency
https://securrency.com/
Funding raised: $2.7 million Individual investment
Management: Christopher Pallotta CEO, formerly Managing Director at Raptor Capital, Josef Schaible COO, formerly Director at Salt Lending.
Founded in 2015, Securrency provides a scalable, protected platform for making markets for previously illiquid assets.
The companys platform includes several products:
Securrency™: Help issuers achieve regulatory compliance and realize the transaction or transfer of tokenized securities;
RegTex™: Provide services such as KYC/AML and other regulatory compliance, information disclosure, investor qualification certification and tax payment;
SmartContraX™: blockchain smart contract development services;
Management: Dan Doney CEO, former Chief Innovation Officer of DIA, Ron Poe Compliance Officer, Captain of the US Marine Corps, Chief Operating Officer of John Hensel, retired US Navy Captain, has managed over $15 billion in aviation assets.
exchange
tZERO
https://www.tzero.com/
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exchange
tZERO is a subsidiary of Overstock.com, one of the largest online retailers in the United States, and focuses on the development of capital market solutions supported by various blockchain technologies.
The companys current products cover securities brokerage services, entry and storage management systems, smart contract routing solutions covering more than 100 brokerage institutions, 24-hour trading platforms, and other services.
The firm handles traditional securities, but also plans to expand operations to include a cryptocurrency trading system. The company takes 10 percent of its adjusted gross revenue and distributes quarterly dividends to holders of its token tZERO.
OpenFinance Network
https://www.openfinance.io/
Amount raised: $114 million ICO in progress
Management: Patrick Byrne CEO, Overstock.com Founder CEO, Medici Ventures Founder, Joe Cammarata President, SpeedRoute (a division of tZERO) CEO, Sonic Trading Founder CEO, Ralph Daiuto COO, General Counsel, John Gilchrist Chief Information Officer, former Merrill Lynch VP.
OpenFinance Network OFN is an open-source platform dedicated to serving the secondary market for alternative assets.
The OFN team has been working together since 2014, launching trading, clearing and settlement services. Recently, the team has turned its focus to blockchain solutions and has developed a set of compliance standards for tokenized securities to be issued and traded on the blockchain network. OFN, which helped facilitate one of the first approved compliant security token exchanges last month, is currently accepting listing applications and will trade more security tokens.
AmbiSafe/Orderbook
https://www.ambisafe.co/
Amount raised: $2.2 million A round
Management: CEO Juan M. Hernandez, founder of PeerRealty and Pop Stock Exchange, the largest real estate equity crowdfunding platform in the Midwest of the United States, and head of research and development at Ian Shipman.
For example, if an investor who does not meet regulatory requirements tries to buy coins through an exchange, the system will match the investors clearance level with an internal database to prevent these unqualified purchases.
Management: Andrii Zamovsky Founder, Stephen Pettibone COO, Former VP of Compliance at Nasdaq.
Bancor
https://www.bancor.network/
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fluid layer
Bancor provides a liquidity model that links multiple currencies to a pool of funds, enables price discovery, and ensures liquidity even when trading volumes are extremely low. When it comes to securities, this model provides an alternative way to achieve liquidity based on the best existing methods, and improves the income of transferring securities assets to the blockchain network.
Bancor is also often referred to as the long tail of value creation, the long tail of low-demand, low-volume products.
In the tokenized securities market, one such use case is Bancors partnership with tokenized venture capital fund SPiCE VC. According to the agreement, SPiCE VC promises to hold no more than 5% of the capital in the Bancor network, so that token holders can benefit from other methods of activating liquidity.
Airswap
https://www.airswap.io/
Amount raised: $152 million ICO
Management: Co-founder of Guy Benartzi, former CEO of social game pioneer Mytopia, president of Particle Code, co-founder of Galia Benartzi, former venture capital partner of Silicon Valley venture capital fund Founders Fund, CEO of Particle Code, product architecture of Eyal Hertzog division.
The benefits of tokenizing securities assets include opening the floodgates for an influx of global capital, eliminating siled demand, and activating supply dynamics that are constrained by geography and infrastructure.
Amount raised: $36 million ICO
Management: Co-founder Michael Oved, algorithmic trader, partner at high-frequency trading giant and market maker Virtu-Financial, co-founder of Don Mosites
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BCap Blockchain Capital
http://blockchain.capital/
Existing Tokenized Securities
Welcome to the new world. At present, there are only a handful of security token issuers, and only about a dozen are currently in circulation, which is at the forefront of financial innovation.
Under the innovative leadership of Brock Pierce, Chairman of the Board of Directors of the Bitcoin Foundation and EOS Partner, Blockchain Capital became the first institution to launch a public sale of security tokens.
Blockchain Capital hopes to promote the sale of this new type of token on multiple levels through its ICO. This ICO created a blueprint for security tokens of the future, investing in other ICO financings that took the best approach and only accepted qualified investors.
Amount raised: $10 million
Science Blockchain
https://science.tokenhub.com/
Management: Brock Pierce Co-Founder of Bitcoin Foundation, DNA.fund and EOS etc., Co-Founder and Managing Partner of Bart Stephens, Co-Founder and Managing Partner of Bradford Stephens.
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Science Blockchain is a fund and incubator focused on blockchain investment. Therefore, it is logical that the funds capital was raised through a security token ICO.
The security token gives its holders up to 70% ownership of the new tokens it incubates. In addition, the funds liquidity proceeds will be used in the repurchase mechanism, allowing investors to enjoy the appreciation of securities.
Lottery.com
https://tokensale.lottery.com/
Amount raised: $12.3 million
Management: Peter Pham founder, Mike Jones and Greg Gilman original Science incubator founders and investors.
Lottery.com, formerly known as AutoLotto, is a gaming project on a mobile internet platform. The company plans to use blockchain technology to improve its payments, transparency, flexibility and scalability in international markets, among other things.
The company’s private sale of security tokens is drawing to a close, reportedly raising nine-figure dollar amounts. The site will pay dividends to holders of the security token based on gross gaming sales.
Securitize and Cashbet have partnered with Lottery.com to help bring the token to market.
Amount raised: Still in progress
SPiCE VC
https://www.spicevc.com/
Management: Tony Dimatteo CEO, Matt Clemenson President, Head of Encryption Creative, Zach Goldberg CTO, worked for Google and Tencent WeChat
Well-known advisors: Miguel Forbes, founder of Forbes.com, Joey Krug, chief investment officer of well-known venture capital Pantera Capital, and Miko Matsamura, co-founder of Evercoin, an American cryptocurrency exchange.
VCs are behind nearly every great change of our time, yet the VC industry has remained almost static. SPiCE VC plans to change that with security tokens, providing investors with instant liquidity.
In traditional venture capital funds, limited partners generally have to wait 7-12 years to get back their principal, while holders of SPiCE security tokens can enjoy tradable assets at the same time, they can also choose to get back instantly Returning its investment While the company plans to invest in some utility tokens, their primary focus is on security tokens, with Securitize being the first such investment they have made.
22X Fund
https://www.22xfund.com/
Amount raised: $40 million
Management: Managing Partner of Carlos Domingo, former CEO of Telefónica RD Department, Managing Partner of Tal Elyashiv, former Chief Investment Officer of Capital One, previously worked for Bank of America, Managing Partner of Ami Ben David.
It is difficult for start-ups to finance, which is why the 22nd startups of the famous American accelerator 500 Startups have joined hands to form a new security token fund 22X Fund.
PropertyCoin
https://propertycoin.re/en/
Among the 500 Startups 2017 Entrepreneurship Camp graduates, no more than 30 winners will receive investment from 22X Fund. The fund will take a 2.5%-10% stake in each start-up. Holders of the tokens issued by 22X Fund can obtain returns through the trading of tokens on the exchange or the repurchase mechanism.
Management and Advisors: Jamie Finn Fund Investment Manager, Tim Reynders Investment Advisor.
PropertyCoin is another vivid example of how security tokens can change the existing market. PropertyCoin leverages the real estate market with a 100% asset-backed token.
Siafunds
https://siafunds.tech/
Aperture, the operator behind the token, plans to invest the raised funds in two major sectors: 1. Residential housing price depressions; 2. Lending to other real estate investors. Through reinvestment, the token holders share 50% of the funds profits.
Management and Advisors: Andrew Jewett Co-CEO, ex-UBS Securities Executive, Matt Miles Co-CEO, ex-UBS Securities Executive.
Sia is a blockchain-based decentralized cloud storage platform, leasing companies can rent corresponding services from hosting providers.
Sia has designed two tokens: Siacoin and Siafunds. Leasing companies use Siacoin, and hosting providers use Siafunds to enter into contracts on the platform. Rental companies and hosting providers need to pay Sia 3.9% of all expenditures on the platform as a network service fee. The service fee is divided proportionally among Siafunds holders.
Slice
https://slice.market/
Nebulous, the operator of the Sia platform, is offering 750 of the 10,000 Siafunds tokens as SEC-compliant security tokens. This is one example of a “two-tier issuance” of tokens, where the issuer issues security tokens and utility tokens at the same time.
Management: David Vorick CEO and core developer, formerly of IBM and Rensselaer Polytechnic University, Luke Champine co-founder and core developer, formerly of Rensselaer Polytechnic University.
Slice is a commercial real estate investment platform for cross-border investors. It functions like an underwriter, issuer and placement agent for high-quality real estate securities.
Slice provides liquidity to conventional real estate securities and creates new investment options for high-net-worth investors. Investors in Slice can choose to receive steady quarterly dividends from cash-flow generating real estate, or higher but irregularly timed dividends from high-yielding value-added projects.
Accredited investors can take advantage of Slices tax-advantaged structure to invest directly in institutional-grade commercial real estate.
Slice integrates the Bancor protocol and the built-in decentralized exchange of the Stellar public chain to ensure the high liquidity of tokens backed by commercial real estate issued on the Slice platform.
