🤝 Security Token Prime Insights: 6/17/2024

Exclusive Intelligence for Security Token Prime Members

June 17, 2024

Summary and Key Takeaways

1. Paxos Doubles Down on RWAs Amid 20% Downsizing

Paxos has done an admirable job to date distinguishing itself as one of the first RWA companies born in the crypto industry. From launching gold to now yield-bearing stablecoins, Paxos has had to announce that despite their growth they are cutting down their workforce by 20%. To counter the loss of 65 people, the company touted that there is a huge interest in stablecoins and tokenization, suggesting that we may soon see more products beyond stablecoins.

2. Figure Launches Figure Connect for Private Credit

Figure is a juggernaut in the onchain loan space. Having already put billions of dollars worth of HELOCs on the Provenance Blockchain, the company has proven itself as the natively-digital blockchain-based loan administration platform. Figure continues to expand on this by now launching Figure Connect, enabling loan originators on the platform to start to tap into capital market services such as receiving forward commitments from buyers, locking in active bids, controlling loan pricing to balance profitability and volume, and delivering pools of loans into those commitments. This is only possible thanks to Figure having all of its loans natively originated onchain.

3. Tokenized Bonds Grow in Frequency

Liquidity products such as tokenized money market funds and treasuries are popular right now, but so are bonds! Last week we saw Bitcoin Suisse launch an over collateralized bond using Obligate for issuance and Polygon for the blockchain. This morning, Securitize announced that Japanese department store Marui will issue a second green bond which is a popular twist to bonds by adding an ESG element. In this case, the $1.1M USD bond will be used for purchasing a renewable energy factory while giving investors with certain criteria additional investment perks aka a great use of blockchain technology!

Notable Market Headlines

Institutional Activity

STM Data

This week the STM Data Team would like to highlight a new onboard: Orderbook. Orderbook is a platform hosting security tokens available for investment in both primary and secondary marketplaces. In our experience exchanges and alternative trading systems (ATS) tend to have a theme on the kinds of assets they like to host. In Orderbook’s case it’s pre-IPO shares and a few tokenized stocks. 

As you can see in the graphic below, these newly-onboarded tokens represent some household names. Orderbook is available to non-US investors, granting them easier access to private companies, some of which are US-based including Robinhood and Kraken. 

Want to check them out? Go to STM.co and filter the “Tokenized Assets” table by Marketplace -> Orderbook. 

Want to hear from Orderbook’s CEO? Andrii Zamovsky spoke at TokenizeThis 2024 on the “Investing in Tokenized Assets” panel.
Watch on STM TV: Investing in Tokenized Assets - TokenizeThis 2024 

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Hello members,

How do you feel about the term RWAs? I’ve always found it a bit strange to consider all non-asset-backed tokens as Fake-World Assets. I still use my BTC in the real world with real people. Still though, through some resurgence in the last 2 years with cited use in the public as early as 2021, RWAs have made its way into the vernacular of crypto. Which means that it has become the representative word you use with non-crypto natives too. 

That's where things get confusing, almost as if Crypto thrives off of having its own language. Still, the term seems to be sexier than tokenization or security tokens. And with each additional announcement bandwagoning on the phrase, everyone else seems to have no choice but to also adopt it. Last week, Coinbase’s event featured the CIO of ETFs & indices of BlackRock who also confirmed this branding problem, pointing out that RWA also means risk-weighted assets to finance folks.

There is a clear disconnect here once again between crypto and TradFi over tokenization. I’m not sure if there is a solution other than to wait for the term to evolve again but historically it has not done our industry well to let the crypto narrative dominate such as coming up with new acronyms. 

Which catch-all term do you prefer to use and why? Let me know on Twitter or at [email protected]!

Happy tokenizing,
Herwig
CEO, Security Token Group 
@tokenwig

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