🤝 Security Token Prime Insights: 8/6/2024

Exclusive Intelligence for Security Token Prime Members

August 06, 2024

NEW STM REPORT AVAILABLE TOMORROW

Look out for STM’s latest report: State of the Tokenization Industry 2024 - The Year of the RWA which features over 350 service providers and tokenization issuers and their updates for the year to date across 18 categories from blockchains to issuances to DeFi and all the updates from tokenization platforms and marketplaces. Dive into the report tomorrow, made possible thanks to SteelWave Digital!

Summary and Key Takeaways

1. Ripple Jumps Into Liquidity Products with $10M Allocation to OpenEden’s Tokenized Treasury Bills to Seed New Fund

Last week it was Coinbase Asset Management and now its Ripple, the market for tokenized liquidity products (liquidity products are tokenized money market funds, treasuries products, and similar vehicles) continues to grow at an explosive rate. Ripple specifically did not have any such products available in its ecosystem prior, with OpenEden marking the first liquidity product on Ripple’s XRP ledger, which is used for RWAs to tokenize on. As part of the announcement, the firm revealed their intentions to invest further in the space, likely with the same tactic of attracting other issuers of liquidity products to integrate XRP support for their existing products. A smart way to force grow an ecosystem of products that will represent a key piece of infrastructure for Ripple’s RWA ecosystem.

2. Franklin Templeton Uses Tokenization to Grow AUM in Japan with SBI

Tokenization and digitization are enabling a new trend of growth for the asset management industry. This new opportunity enables easier expansion into new geography to gain more customers for existing products. Simply identify a region, find a local leading investment bank that has a platform set up, and add your products via feeder funds into your existing TradFi vehicles. That’s what Franklin Templeton is doing with SBI in Japan and it’s brilliant. We’re also seeing the same thing on a smaller scale between US-based broker Entoro Capital and UK-based broker Archax who also announced a team up to expand each other’s products to their platforms. This trend will lead to eventually establishing global rails for products to live on so that all investors can enjoy easy access to investments no matter where they are (or where the asset is). 

3. STOKR Pays out ~$50M+ via 800+ BTC for Blockstream’s Bitcoin Mining Note

A big week in dividends last week as well with BlackRock’s BUIDL (currently at $519M AUM as of Tuesday morning) paying out over $2M to its investors. It’s incredible to see this activity on the Ethereum chain knowing that this level of transparency and access will enable better analytics and features for investors thanks to this type of data. Ratings will improve, lenders and DeFi platforms can better underwrite, and investors will enjoy knowing that the asset manager could quickly come under scrutiny from any of its activity, and therefore is likely doing everything by the book as best as possible to adhere to this level of open communication. 

However, that wasn’t the only big dividend, with Blockstream Mining Note taking the crown on that one. STOKR paid out investors 800+ BTC over a week’s time, roughly $50M worth. With over 1,200 total BTC mined, more are expected to be distributed. Investors that missed out on this successful offering get a second chance since Blockstream has a second mining note offering live on STOKR now.  

TokenizeThis Workshop Tour Around the US Launches September

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.

Notable Market Headlines

Institutional Activity

STM Data

This week the Security Token Market Data Team would like to give a sneak peek into our July 2024 monthly report. This month hasn’t been great for public markets, crypto, or even security tokens in terms of overall performance. As seen Monday morning, public markets have seen a nose dive amid the Nikkei crashing and recent numbers in unemployment (4.3%) among other catalysts. This has translated into the crypto markets as well, evidenced by the CD20 below, which just barely outperformed a hypothetical basket of all STM-tracked security tokens.

Both benchmarks saw overall growth on the month with the CD20 improving from last month’s -11.74% however security tokens took a decent hit from June’s 13.73%. For August, given the recent crash one may expect better monthly performance, however we’ll have to see. 

How did individual RWA asset classes compare? Keep an eye out for our RWA Market Report: July 2024 coming later this week!

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Hello readers,

It’s a happy Tuesday alright because we finally got to announce our new state of the industry report coming out tomorrow. Creating a snapshot of a time period in the industry is something we have been publishing for several years now (past editions are available on the Security Token Prime platform) and this year is arguably the most special year of all. We dubbed it the year of the RWA as the acronym caught the favor of the crypto community and wider industry now. It’s a breakout year that changed the face of tokenization forever. By reading this report you will see the immense amount of activity that is occurring throughout different countries, asset classes, investment types, and use cases. 

This is just the beginning of more reports we’re developing for you so do be sure to reach out about what you’d like to see, especially if it’s missing. As August roars in, the RWA news doesn’t stop and nor will we. Enjoy the read and if you want early access, shoot me an email or a DM on socials!

Happy tokenizing,
Herwig
CEO, Security Token Group 
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