🤝 Security Token Prime Insights: 9/3/2024

Exclusive Intelligence for Security Token Prime Members

September 03, 2024

Summary and Key Takeaways

1. Sony Launches ETH L2 Soneium with Plans for RWA Support

Did we think Coinbase was going to be the only one to benefit from the success of their BASE blockchain? On the other hand, does Sony have any business launching an L2 if they aren’t a crypto native company? Hint: they didn’t do it alone. The launch of Soneium will be a fantastic driver of mainstream adoption and is further validation for blockchain technology as a whole.

With Sony Pictures and Sony Music participating, we can soon expect RWAs tied to these business units or maybe we can expect to see NFT’s on steroids, as hinted last year by Sony’s patent to transfer IP between videogames. It’ll be interesting to see if Soneium is targeting crypto-natives, traditional enterprise solutions, or internal use. Of course, they aren’t mutually exclusive!

2. Centrifuge Launches RWA Lending Marketplace with Morpho

Lending was a massive driver of growth for DeFi and is even commonplace and traditional asset classes as a method of liquidity, such as real estate where ‘recapitalizations’ and using debt go hand-in-hand to make wealth. Now, Centrifuge has launched lending services for their Centrifuge-affiliated Anemoy Liquid Treasury Fund (LTF), Midas Short Term U.S. Treasuries (mTBILL) and Hashnote’s U.S. Yield Coin (USYC). The target audience is institutions, not retail investors per say. The whole thing is also powered on Coinbase’s BASE blockchain. Centrifuge has been a leader in tokenization and also transparency, showing the industry how RWAs should be rich with information. Now thanks to Centrifuge we can gauge just how demanded these lending platforms really are.

3. Blocksquare Puts a Tequila Distillery on the Blockchain

After about 10 years of rebranding and re-invention, the tequila industry is alive and well with George Clooney’s sale of Casamigos for $1 Billion in 2017 certifying that. Still, it’s a difficult industry to enter as an investor and we don’t all have the resources and access as an A-list celebrity. Well have no fear, Blocksquare is here to save the day! The tequila in question? Mexico-based Rancho Altos has teamed up with Blocksquare to help the upstart grow into the next big tequila brand.

They are also including sustainable real estate into the offering that features a wellness center, farm-to-table restaurant, and much more. This is Blocksquare’s third DAO and requires investors to use the $BST token in order to participate in the deal.

4. MakerDAO is Now Sky, Launches (another) Stablecoin

Trouble or opportunity? You decide when it comes to one of crypto’s oldest and most beloved brands, MakerDAO, turning itself into Sky. They’ll do it by introducing a new governance token and stablecoin while making them interchangeable with their reflected counterpart of the current system between Maker and Dai. Stablecoins are heating up but Dai currently sits as the third largest, with Paypal’s PYUSD quickly catching up (but still a ways to go). The driving motivation is apparently that a new stablecoin token and structure is needed to scale DeFi. This spells potential trouble as they try to launch a similar product against an already very successful one. Then again, it may just be another buying and FOMO opportunity for crypto natives to bank in on the next big thing.

5. LiquidFi Powers 21st Redwood Securitization; Tops Over $8 Billion

It may not be a true security token in the sense, but LiquidFi is using blockchain for one of the largest sources of securitization data ever to be using the technology. As we saw similar success with Figure’s HELOCs, Redwood Trust has found a home in LiquidFi for its billions in real estate securitizations itself. Before you cry foul and say this is just token dressing, remember that not every use case is about offering investors a new UX with self-custody. This one is all about efficiency, transparency, and savings. Who is to say the other features won’t come later on? One way or another, we should always remember there will be crawling, then walking, and then running, especially in sensitive cases regarding billions of dollars worth of RWAs from the old guard of finance. 

Notable Market Headlines

Institutional Activity

NEW STM REPORT AVAILABLE - Updated tZERO Interview!

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, made possible thanks to SteelWave Digital and now with a special interview with tZERO! Check out the updates. 

STM Data

This week the Security Token Market Data Team would like to revisit the biggest price changes which can greatly impact market caps and compare them to the previous week’s if they ranked in the top 10. These are volatility levels that are typically bigger than we’d see in public markets, mainly due to less liquidity in tokenized and private markets. Please find below this week’s top 10 in price change and their respective asset classes:

  • Axelra Early Stage AG

    • Last Week: Didn’t Rank

    • This Week: -100%

    • Asset Class: Equity

  • Hashrate Asset Group

    • Last Week: -35.14%

    • This Week: 42.86%

    • Asset Class: Asset Backed Securities

  • EnergyFunders Yield Fund I, LLC

    • Last Week: Didn’t Rank

    • This Week: -40%

    • Asset Class: Pooled Investment Fund Interests

  • Curzio Research

    • Last Week: Didn’t Rank

    • This Week: -39.13%

    • Asset Class: Equity

  • INX Limited (-11.76%)

    • Last Week: -11.76%

    • This Week: 21.43%

    • Asset Class: Asset Backed Securities

  • 1 Holdings McCracken Rd, Garfield Heights, OH 44125

    • Last Week: Didn’t Rank

    • This Week: -19.01%

    • Asset Class: Real Estate

  • 19041 Lenore Ave, Detroit, MI 48219

    • Last Week: Didn’t Rank

    • This Week: 18.41%

    • Asset Class: Real Estate

  • 20160 Conant St

    • Last Week: 13.39%

    • This Week: 12.14%

    • Asset Class: Real Estate

  • 2 Holdings Arcola St, Detroit, MI 48234

    • Last Week: Didn’t Rank

    • This Week: 11.76%

    • Asset Class: Real Estate

  • Republic Note

    • Last Week: -11.11%

    • This Week: -11.11%

    • Asset Class: Asset Backed Securities

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Events

Recent Recordings

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

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  • 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 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.

Hello readers,

I can assure you that Sony will not be the last Fortune 500 to launch their own blockchain, L2 or otherwise. We are still years away from mainstream adoption where blockchain will impact every aspect of life the same way the internet did. Still, those years will come by sooner than you think and you’ll see that numerous big firms will also have their own solutions, Sony is just really ahead of the game. Now other R&D divisions need to pay attention and consider - are they going to build the chain their company uses or are they going to end up using someone else's? 

I am also really hoping to see success in Centrifuge’s new lending support with Morpho. I made them companies of the week because I truly believe that collateralization will unlock RWAs. What I mean by this is that the industry has been judged and criticized for its lack of active secondary markets compared to crypto and traditional stocks. Instead of measuring up here, I believe we can see a huge adoption in purchasing and holding AND collateralizing positions to lead to a surge in market growth. When regular investors and even institutions realize that with a few clicks of a button they can take out a loan against their holdings, it will change the way they perceive RWAs. There is no going back once this genie is out of the bottle. 

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

Herwig’s Pick: Morpho Labs

Kyle’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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