🤝 Security Token Prime Insights: 10/21/2024

Exclusive Intelligence for Security Token Prime Members

October 21, 2024

Summary and Key Takeaways

1. Singapore’s Largest Bank Officially Debuts Tokenization Services

DBS has officially joined the ranks of JP Morgan, Citi, Goldman Sachs, State Street and HSBC in providing commercial banking services that are built on the blockchain. Uniquely, DBS benefits from the Singaporean regulatory regime that is the Monetary Authority of Singapore (MAS). The MAS has long been supporting blockchain-based financial solutions by setting up a regulatory sandbox, granting numerous licenses, and a genuine interest in understanding the technology. 

The focus will be on institutional clients leveraging their in-house EVM chain they developed. Supporting liquidity management, DBS has developed payment rails, treasury tokens they released in August, and what they also refer to as conditional payments and programmable rewards through customized smart contracts presumably. This is the future of finance.

2. Zero Hash Integration for BUIDL Finally Complete to Enable 100% Liquidity

Back in May, TokenizeThis2024 revealed a partnership between Zero Hash and Securitize with BlackRock’s BUIDL, the largest tokenized fund in the world. The concept is simple, to create an on ramp and off ramp for BUIDL in a natively on chain environment. USDC is the natural choice here given the incestuous investments between all these players, but Zero Hash is the real magic at play. They provide the technology (and not just for Securitize/ BUIDL) to enable this on and off ramp to what Herwig calls “100% liquidity” due to the fact that you can instantly subscribe and redeem BUIDL with USDC now. Given that USDC’s market cap is over $30 Billion and BUIDL’s AUM is only $550 Million, it’s safe to assume that 100% number.

3. Tokenized Gold; More Supply Than Demand?

Last week saw another number of gold projects enter the market. The number of stablecoins, unmined gold, and gold-redeemable derivatives tokens is becoming staggering. The premise is sound and the expectation is that the gold market would eventually come on chain inevitably. However, the structure and the appetite just doesn’t seem to add up for what seems to now be a saturated market of token projects coming from DeFi, startups, and even institutions like HSBC. Where will the demand for these projects originate from?

4. Stripe To Complete Largest Acquisition in Crypto for $1.1B with Bridge

In an incredible 180 degree turn on their stance in crypto, Stripe has quickly become the darling of the industry again. Not only did they announce crypto payments support earlier this year, they’ve now been integrating Paxos and other similar infrastructure to make this possible. Nothing compares to this latest activity, where Stripe may have completed the largest acquisition in its history. 

Stripe purchased Bridge, a stablecoin infrastructure company started by two Coinbase executives not two years earlier from today! This gigantic purchase size shows the firm's commitment to the industry and proves they understand the future payment rails will be on chain.

5. Marketnode and Kriptown Get Investments from TradFi

As the industry heats up, more and more technologies are seeing investments from large finance incumbents. Marketnode, which raised money earlier this year from HSBC and others, announced that Euroclear is joining the cap table. Given that Marketnode was a JV between two Asian firms, this is an interesting development that highlights the benefits of interoperability and the interest by both parties to realize this new infrastructure together. On top of their tokenization solutions, Fundnode is a fund admin platform so maybe the first products we see take advantage of any harmony from this investment will be funds.

Meanwhile BNP Paribas led the investment into a French tokenization platform called Kriptown. Raising almost $5 Million, the platform is already licensed under the regime in France. They’ve used that to onboard over 6,000 investors that have invested over €5 Million into deals. They plan to launch a 24/7 exchange and this new financing should certainly help them get there.

Notable Market Headlines

Institutional Activity

NEW STM REPORT AVAILABLE - PRESENTED BY INX!

Security Token Market is proud to release September 2024’s market report, analyzing secondary market activity and benchmarking against the CoinDesk 20 Index (CD20).

In this month’s market report, we have meticulously tracked 649 security tokens spanning across 35 marketplaces and 10 blockchains.

Sections include:

  • Key Takeaways

  • CoinDesk 20 Index Benchmark

  • Quantitative Highlights

  • Asset Class Breakdown

  • On-Chain Liquidity Products

  • Platform Spotlight: INX

  • New Tokens and Announcements

We’d like to extend a special thank you to our sponsor, INX, for making this possible! INX One is the company’s marketplace. INX Securities, LLC is an SEC-registered ATS and Broker-Dealer and member of FINRA. Through these registrations and licenses INX can facilitate primary capital raises (RegD, RegS, RegA, F1/S1 and others) and those security tokens trading on a secondary market. Learn more about them and how their assets performed in the report!

STM Data

The STM Data Team would like to cover this week’s top movers. These are the assets with the biggest swings in price (and ultimately market cap). 

What causes such price swings? Aside from big announcements or any data available on the underlying asset (mostly companies in this case), another factor could include low liquidity which causes any order to buy or sell to make a significant impact on the token’s price. Find below this week’s top 10 most volatile assets by % change in price.

Asset

Marketplace

% Change

Scale AI

Orderbook

-89.06%

Klarna

Orderbook

-80.73%

Curzio Equity Owners

tZERO

-76.25%

Rappi Inc.

Orderbook

-50.12%

INX

INX ONE

36.84%

StoreDot

Orderbook

-31.25%

TradeShift

Orderbook

-23.65%

Standard AI

Orderbook

-20.66%

XY Labs

tZERO

-16.67%

8531 Intervale St

Levinswap

16.63%

This was generally a poor week for digital assets as most of these are down significantly. After those 10, many more tokens are up on the week, however in the low single digits.

Follow trading activity on STM.Co and interact with different graphics on STM Charts for further insights!

Security Token Prime is Made Possible Thanks to Our Enterprise Partners

Events

Recent Recordings

  • (NEW) Navigating PR Between TradFi and Web3 Media with Amsterdam Group (Recording Link)

  • Beyond the Hype: Cracking the Code of Successful Asset Tokenization with BlockInvest and Polygon (Recording Link)

  • Risk Management in Tokenized Assets with Moody's and Particula (Recording Link)

  • Blockchain Meets Construction with Inveniam & LV8R Labs (Recording Link)

  • Non-Performing Loans with BlockInvest and Davis & Morgan (Recording Link)

  • Issuer Spotlight: Tuscany National Token (Recording Link)

  • Platform Spotlight: Block Time Financial (Recording Link)

  • The TradFi/DeFi Hybrid with Maple, Centrifuge and Swarm (Recording Link)

  • Platform Spotlight: REtokens' New Platform with Tyler Vinson and David Kirschbaum (Recording Link)

  • Powers Hour: New SEC “Dealer” Rule Expansion and DeFi Impacts (Recording Link)

Catch Us on the Road

Are you going to be in New York City or Miami this week? Meet some of the team!

New York City: Are you attending Centrifuge's Real-World Asset Summit? Join our CEO Herwig “Happy” Konings in New York City as he leads the service providers working group on Day 2!

Hosted at The William Vale, this conference spans a variety of topics including institutional adoption, regulatory tailwinds, DeFi, infrastructure, and a whole lot more featuring top leaders in the space such as Cynthia Lo Bessette from Fidelity Investments, Roger Bayston from Franklin Templeton, Anthony Bassili, CAIA from Coinbase, Robert Leshner from Superstate, and even Scottie Pippen (and many more)!

Miami: Join our COO Jason Barraza where he will be moderating the OFF THE RECORD panel on "Tokenization & Its Implications – A New Frontier in Your Digital Asset Future" at DigitalAssets US at the JW Marriott Marquis Miami. Use DA24SPKR for 15% on tickets!

Panelists include: Joseph Chalom from BlackRock, Andrew Czupek from Northern Trust, Ian De Bode from Ondo Finance, Jennifer Murphy from Runa Digital Assets, and Tamer Ozmen from Mintus

Hello readers,

Heading into 2025 we will have numerous top 20 global banks launch tokenization services, we’ll have numerous top 20 global asset managers with live products onchain, and we’ll have the top DeFi applications providing native support for RWAs. Add in the fact that there is a growing sentiment that, regardless of who wins the election, a booming crypto economy is coming, we’re looking at the breakout year for tokenization. 

Since 2018 I’ve been saying that this industry only takes off when people start making money. That is only possible when there are active markets and use cases providing net positive cash flow. Fast forward to today and we can see there are asset managers generating millions of dollars from AUM, we have real estate owners flipping properties to investors for a profit, and we now have clearly quantified cost savings proving above all else this technology is the inevitable future. The service providers for the technology, auxiliary admin services like audits and ratings, and the related infrastructure can now start to monetize on a growing market. 

I’ll be in NYC this week for the RWA summit by Centrifuge. Give me a shout if you want to link up or if you’re there, join my working group on Day 2!

Happy tokenizing,
Herwig “Happy” Konings
CEO, Security Token Group 
Follow me on X / LinkedIn

Herwig’s Pick: DBS Bank

Kyle’s Pick: WIN Investments

Find out why and more every Friday live at 2pm EST on LinkedIn or X/ Twitter. Past episodes available on Youtube or your favorite podcast platform! 

Helpful Resources

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Security Token Prime Insights is for informational purposes only.