Securities account for nearly $89 trillion in market capitalization today. Trading volume of securities in the US alone reaches upwards of $18 billion per day. The infrastructure facilitating these markets is stuck on legacy technology designed decades ago for a much different less-connected world.
The next generation of capital markets infrastructure exists on the Liquid Network, a Bitcoin sidechain purpose-built for asset issuance and trading. Security tokens on Liquid provide an avenue for securities issuers to access a new paradigm of trading and value transfer using the latest technologies available today.
A stock or security gets a technology upgrade when issued on Liquid; becoming programmable, cryptographically confidential, nearly instantaneously transferable, and 24/7 swappable with other assets on Liquid using protocols that help eliminate the need for trust.
Security Tokens Explained
Security tokens are actual financial securities backed by business revenue or assets. The issuing company is registered with the appropriate regulatory authorities, so there is also investor protection for those participating in security token offerings (STOs).
Three unique examples of security tokens are the Blockstream Mining Note (BMN), Exordium EXO token, and TreeBR’s TREE token. The BMN is a token issued on the Liquid Network that is backed by Bitcoin mining hashrate from Blockstream, and provides BTC after a three-year maturation period. The Exordium EXO token represents non-voting profit sharing equity in Exordium, the game publisher behind the new Sci-Fi MMO game Infinite Fleet. TREE is a land-backed security token that helps rural Amazon rainforest communities monetize their land through conservation.
Reforming Capital Markets
Security tokens like BMN, EXO, and TREE benefit from their issuance on the Liquid Network for a variety of reasons that investors and issuers can leverage to usher in a more open securities market paradigm.
Security tokens on Liquid can be transferred with two-minute transaction finality, a fraction of the time required compared to legacy securities platforms that can take days to finalize settlement.
Liquid is a distributed network that supports 24/7 trading, unlike traditional markets that are only open during a very limited timeframe on weekdays.
Atomic swaps on Liquid facilitate seamless exchanges between security tokens and other assets on Liquid like L-BTC or stablecoins like USDt, enabling market participants to swap assets without needing to trust their trade counterparty.
Sensitive financial data, such as the transfer amount and the security token being transferred, are kept private through the use of cryptographic blinding technology called Confidential Transactions.
Your Investment, Your Wallet
Security token holders can even self-custody their assets in an offline wallet with multisig functionality for greater security. The combination of Blockstream Green and AMP provides a simple and intuitive graphical user interface for managing security tokens on Liquid.
STOKR is a registered European broker that specializes in tokenized securities. In late 2019, STOKR began enabling support for startups and ventures to issue security tokens on the Liquid Network. It has since become a key player in the rapidly growing security token market, facilitating offerings like the Exordium EXO token and the Blockstream Mining Note while providing assurance to investors that issuers are vetted and legitimate.
Listing on the STOKR Platform
Participating in an STO is a simple process and can be done through a registered broker like STOKR.
For investors, signing up for an account at STOKR is easy. The signup process is entirely online and free, and investors can rest assured that STOKR’s professional team has vetted the available STOs.
For startups and ventures wishing to issue a security token, STOKR presents a one-stop solution, satisfying all the requirements for your STO to comply with EU capital markets laws. After sign-up, a team of professionals will begin the due diligence process if your venture is approved and aligns with STOKR’s vision. From there, you’ll work with STOKR’s team to set investment timelines and key action items.
Issuing via STOKR can give your STO exposure to a community of adept investors who are eager to take part in your venture’s success. STOKR also provides analytics on the investors participating in the issuer’s STO as well as tools for startups to engage with their community and provide regular updates.
Integrating Liquid and Security Tokens
If Liquid and the issuance of security tokens interests you or your company, and you would like to learn more about how it can fit into your business model, reach out to our representatives by email.