Tokenized equity: overall concept and what makes them so good.

tokenized shares

With the advent of blockchain, wide range of companies are fortunate to implement multiple benefits offered by the digitised crypto-version of equity shares in their businesses. Since then not only a diversity of exchanges have succeeded (where you can trade solely in cryptocurrency), but now we have a well-tuned system of the tokenized asset market. Make yourselves comfortable, and we’ll share our knowledge and tell you how to take to such phenomena like a duck to water.  

First, let us remind ourselves what’s behind the idea of a security token (this term should not be confused with a peripheral devices). Aforementioned token is none other than a digital equivalent of a securities (such as stocks and bonds) which can be bought and sold based on demand and supply. Its core functions are that investors can expect that their ownership stake is preserved on the blockchain ledger. Furthermore, ownership of an asset gives its owners bonuses in the form of dividends (distribution of profits by a organisation to its shareholders). The benefits of using a security token are based on a smart contract framework, the only fly in the ointment being that the turnover of these tokens is consistently monitored by financial regulators (makes you think about the «great and powerful» SEC, huh?)

Perhaps the main advantage of such tokens is that they could roil traditional financial markets and allow you to exclude the intermediation of banks. This brings us back to where we started. Tokenized stocks refer to a liquid securities which take the form of tokens or «coins» and are backed by a real assets that already have value (like company’s equipment or real estate).

It’s important to emphasise that it is quite possible to tokenize not only securities, but any asset as well. Whether it’s gold, oil, painting or car - it doesn’t really matter, almost everything can undergo tokenization. More importantly, it can be a pool of cash-flow generating assets that can achieve a better performance compared to a fixed asset. 

As for investors, such an opportunity is far more suitable because not everyone is willing (or able) to purchase a high-priced share of the desired corporation. It is, therefore, allows investors to have a membership and receive dividends in proportion to their respective contributions. 

A lack of a global network of banks, sub-custodians and brokers represents another undeniable advantage of such a perspective. And this has a direct impact on reducing costs and benefits optimally while accelerating the trade process.

Security tokens are listed through STO - security token offering. Loosely speaking, this is an IPO (initial public offering) available to a substantial number of private investors. It may well be that in the future a variety of global corporations will adopt cryptocurrency startup’s experience regarding on how to list their own shares through STO. As for the crypto exchanges, the secondary market for security tokens is already in full swing. We are also pleased to announce that Inanomo will not stand idly by and that we’re always looking forward to implementing cutting-edge technologies on our exchange!

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