🤝 Security Token Prime Insights: 9/9/2024

Exclusive Intelligence for Security Token Prime Members

September 09, 2024

Summary and Key Takeaways

1. Injective Launches a BUIDL Index

Things got even more interesting in the tokenization space last week. L1 blockchain Injective announced what appears to be a derivatives product around BUIDL. Rather than tracking BUIDL’s market price or holdings, the BUIDL Index is tracking the fund’s token supply. According to Injective, BUIDL’s performance has become a “barometer” for institutional interest in the crypto space, thus tracking inflows and outflows has become prominent. 

The BUIDL Index’s price goes up and down relative to the token supply, allowing for leveraged long and short positions depending on investors’ confidence in the market, more specifically the BUIDL fund. This fund’s NAV is meant to stay at $1, meaning that dividends are paid out in additional tokens. How do they account for bulk mints/ burns drastically changing the supply? Injective is using a one-hour time-weighted average price (TWAP) to account for short-term volatility. It’ll be interesting to see how this is received by investors and the audience Injective will be able to create, considering its retail-friendly pricing ($1) yet semi-complex nature being a perpetual future.

2. Republic is Bringing Hollywood on Avalanche

We often get asked “what assets are best for tokenization?” That’s a complex question but one of the go-to tells is if there’s a pre-existing fanbase to tap into AKA potential investors. Well Pressman Film is one of those. 

As a prominent producer for some great films (including American Psycho), Pressman Film is opening themselves up for investment backed by six titles–three from a pre-existing catalog of intellectual properties (IPs) and three new IPs. To no surprise, this tokenized culture asset teamed up with Republic and chose Avalanche for their RegCF offering meaning movie-watchers, accredited or not, can invest for just hundreds of dollars and trade them amongst each other (and new investors) a year later.

This offering was announced on Thursday (9/5) and as of this morning (9/9), they’ve raised 94% of their minimum $500K goal. With plenty of perks to offer and this traction, it’ll be interesting to see how much they’ll be able to raise in the remaining 74 days.

3. Siemens Issues €300 Bond, Settles in CBDC

Fortune 500 Siemens issues its second digital bond, 5 times larger than the prior round it had originally issued. Instead of using the Polygon public blockchain, they opted to use the SWIAT private-permissioned blockchain instead. This isn’t unusual per say as they could be comparing the use of the two in the ongoing trials with the European Central Bank that this is a part of. Still, it can only be a good thing to see that number go up! The usual efficiencies were cited.

4. DigiShares is Open for Investment

One of STM’s Enterprise Partners, DigiShares, has reopened themselves for investment from US accredited and non-US investors for a limited time. They have 150+ clients spanning real estate developers, investment banks, & more, with meetings coming from all over the world including Security Token Advisors clients.

What else is in the pipeline for the white-label solution? Their looking to launch a trading platform, RealEstate.Exchange - a bulletin board with an order book and settlement via atomic swap smart contracts. This will be followed by an automated market maker (AMM) later in their timeline. Go ahead and check out their offering! 

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 give you a preview of the RWA Securities Market Update: August 2024 report coming out in the next couple of days. Keep an eye out for it in your inbox and Security Token Prime platform!

Taking a look at a hypothetical security token bundle of all STM-tracked RWAs, it outperformed the CoinDesk 20 Index (CD20), closing August up 3.03% versus the CD20’s 14.45% loss this month. How does this compare to past performance? The security token basket has remained mostly in the lower single-digit positive returns whereas the CD20 has seen some months with similar performance and others with double digit losses. This speaks to crypto’s volatile nature.

As noted in the July 2024 edition, traditional markets saw a negative start to August 2024 amid the Nikkei’s crash, unemployment numbers, and fears of a recession among other catalysts. Crypto subsequently experienced that loss as well, working to recover throughout the month but ultimately coming back down. While some security tokens seem to have also experienced losses, others saw significant growth ultimately helping the basket keep its positive performance. To help narrow down on performance drivers, this report will benchmark each asset class against the CD20 as well.

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Events

Tokenization is a growing trend among TradFi folks, but why hasn't the market exploded in adoption yet? Is tokenization not as easy as it sounds?

This webinar will explore the challenges behind tokenization including compliance, regulations, legacy tools, market hours and more.

Recent Recordings

  • (NEW) 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 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,

The world of RWAs is growing faster than ever, with some major crypto-native companies pivoting almost entirely towards RWAs such as Chainlink and Ripple. Major players like Coinbase and Robinhood are gearing up for the inevitable future they see in RWAs too. And new chains are coming out seemingly daily, with the future being hundreds (even thousands one day soon) of L1s and L2s providing support for or being exclusive to RWAs. 

This is logical given the size and variance in the tokenization of everything. The next few years will prove the battleground years until the market dominant leaders emerge. This means exciting times ahead, strap in!

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

Herwig’s Pick: Pressman Film

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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