🤝 Security Token Prime Insights: 10/28/2024

Exclusive Intelligence for Security Token Prime Members

October 28, 2024

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Summary and Key Takeaways

1. Lazard to Launch Tokenized Funds While Legal & General Fast Follows

The trend of an asset manager cozying up and picking a tokenization partner continues. BlackRock chose Securitize, Abrdn chose Archax, State Street chose Taurus, and now Lazard chose Bitfinex Securities. Bitfinex is an interesting choice in that it issues out of Kazakhstan’s financial regime, likely giving more flexibility to RWA issuances and tapping into crypto. This is because Bitfinex was founded by one of the same founders and is closely related as a result to Tether. The largest stablecoin and crypto adoption likely suggest Lazard is targeting crypto natives and crypto organizations as opposed to traditional clients. 

This may present a level of risk, given the concerns and previous enforcement against Tether but it is one that the almost 200 year old asset manager is willing to take with its $250+ Billion in AUM in reputation. According to Coindesk, executives from Lazard mentioned the firm sees an opportunity to lower operational costs while improving liquidity and efficiency. The first offering looks to be a Fund of Funds vehicle that is linked to numerous existing Lazard equities and emerging markets funds. Welcome to the tokenization game, Lazard!

2. $1 Billion in Data Center Tokens Coming by Aurum Equity Partners on XRP Ledger

For varying reasons funds are continuously coming on-chain and real estate is one of the most popular applications of tokenization. Aurum Equity Partners is doing both by announcing their $1 Billion fund, dedicated to investing in data centers across the United States, United Arab Emirates, Kingdom of Saudi Arabia, India, and Europe. 

They claim this to be the world’s first combined equity and debt tokenized fund. The XRP Ledger-based token is issued via Zoniqx which presumably will facilitate the dividends and any governance on the equity side along with coupons/ repayment on the debt side of the token.  

Tokenized real estate continues to grow and in different formats, as we learned in conferences this past week, such as Realproton tokenizing an $84M fund of hotels on stage at DigitalAssets US in Miami (with billions in the pipeline) or PayDrift’s $1B public offering in mortgage backed securities. The future is bright with blockchain helping upgrade real estate assets.

3. STOKR Raises Nearly $8M Led by Fulger Ventures

Just a week after Blockstream raised their $210M convertible note, STOKR raised €7.4 million ($7.98 million) with both led by Fulger Ventures. The goal for STOKR is to build institutional infrastructure on bitcoin-native blockchains such as Liquid Network (from Blockstream) and use this raise to grow their bitcoin treasury over time which is reflected in the structure.

STOKR took 100 BTC ($6.78 million) and €1.2 million in cash, emphasizing the bitcoin treasury objective. The company has hosted various offerings including the Bitcoin Mining Note, now on its 5th series of its 2nd issuance (BMN2). The first resulted in mining over 1,242 BTC and delivered returns of up to 103% over its three-year term. Some investors doubled down by rolling over into BMN2 for a 3% bonus.

4. Mantra Launches Mainnet for L1 RWA Blockchain

With almost over $1 Billion in pipeline, MANTRA’s L1 for RWAs is finally live. After years in the making, including an RWA governance token of their own, the blockchain has now gone from testnet to Mainnet. MANTRA had already signed multiple deals prior to this, including a $500M pipeline with MAG Group and another deal with Zand Bank. 

Impressively, this RWA governance token has achieved a market cap of over $1 Billion with over 14,000 token holders. Read the “Think Like Herwig” section further below to further understand the significance of this success. Few other RWA governance tokens have breached the unicorn status, with Ondo being the most successful among them. Will this crypto native approach give Mantra an upper hand in its ecosystem?

5. ANZ To Use Chainlink for Private Transactions

Privacy remains a concern for many institutions and Chainlink recently launched their CCIP Private Transactions Protocol, with ANZ to be among the first to use it. As Sergey Nazarov puts it, the lack of a privacy solution for cross-chain transactions has been  limiting the entire industry's growth. ANZ will start using this new protocol in their Project Guardian initiative as they control what data to share and who can view it. 

Additionally, ANZ also announced at the end of September that they’ll be working on trading commercial paper across private blockchains, teasing the protocol’s launch. The bank will be using their stablecoin A$DC to move goods and capital across the region, within Project Guardian.

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 most traded assets. Below is a table of the top 5, along with their respective marketplace and volume amount.

Token

Marketplace

Volume

Enegra

BigONE

$375,804

TZROP

tZERO

$65,009

Republic Note

INX ONE

$35,437

INX

INX ONE

$24,307

RealUnit Shares

Aktionariat

$17,402

It’s no surprise to see a marketplace’s own token often be one of the most traded in that marketplace - something we notice in our monthly market reports. TZROP and  INX are perfect examples of that, with others that didn’t make the overall top 5 this week including Aktionariat’s DAKS (now also listed on INX) and Realio’s Security Token (RST).

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

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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)

TokenizeThis Workshop Tour Around the US

Get your tickets today for a full day masterclass around tokenization from A to Z. There continues to be a massive education gap in the industry and off the success of the original workshop in Miami last May, we’ve decided to go nationwide. We’ll be visiting NYC, Houston, Boston, LA, SF, Atlanta, and Chicago, check out workshop.stm.co for more information. Use code PRIME for 15% off.

Hello readers,

Last week I had the pleasure of attending the RWA Summit in NYC hosted by Centrifuge. It was an application/ invite only event that had more than 1,000 people interested in attending. Only around 350 were let in! This demand bodes well for our upcoming TokenizeThis 2025 in April where we aim to have over 2,000 people come together to talk about tokenization in what I hope will become the largest RWA conference in the industry. With 2024’s edition having over 500 attendees, we might already hold that record. Now let’s discuss what I learned. 

Given a room of about 50% “Hoodies” and 50% “Suits”, it became clear to both sides that there are two very different narratives for RWAs being projected. For TradFi, the narrative of having a faster, more cost-effective, and digital operating system for capital markets can prove to create trillions of dollars in new value that legacy systems around the world currently hold as rent seekers. Given the total global asset size of $500+ Trillion, this represents a remarkable opportunity and the first movers like JPM’s Onyx have signaled this is the future. 

However, that $500 Trillion in potential tokenization has nothing to do with the $2+ Trillion in crypto assets that are trading and held around the world today. The other RWA narrative is that stablecoins, foundations, DAOs and even every day crypto natives will want onchain access to new forms of investment that present more stability. In principle, most of the $150 Billion in stablecoins should be backed by $150 Billion in tokenized treasuries, yet the market is only 2% of that today. This is an entirely different target market and opportunity subset than those that are focused on upgrading TradFi’s legacy systems. 

I believe the solution to bridging the crypto audience with TradFi’s RWA products will be governance tokens. I predict 2025 to have an extraordinary amount of RWA governance tokens related to RWA DeFi applications and RWA TradFi Infrastructure companies. And I think they will mostly all see massive success. Why should Ondo and Mantra be the only companies to enjoy unicorn governance tokens when there are hundreds of other competitors offering their own unique value proposition and RWA products to the markets. Now throw in a bull market environment and now you can let your imagination run wild.

TLDR: If you want to tap into crypto natives, launch an RWA governance token immediately.

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

Herwig’s Pick: Centrifuge

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! 

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