🤝 Security Token Prime Mid-Week Insights: 4/25/2024

Exclusive Intelligence for Security Token Prime Members

Summary and Key Takeaways

1. Archax & Ownera Tokenize BlackRock MMF on Hedera Hashgraph, No Official BlackRock Involvement

Hedera Hashgraph saw its native HBAR token skyrocket upon news that Archax and Ownera had tokenized a BlackRock Money Market Fund on their chain. Similar to Ondo, this is not an official partnership with BlackRock in any form, which was later clarified by Archax’s CEO. The HBAR token did come back down but this doesn’t change anything in our view. This is further proof that liquidity funds and products are coming to the market to provide much needed vehicles for settlement onchain. The real focus should be on the ecosystem, which is in an entirely different jurisdiction than BlackRock’s BUIDL product with Securitize. Furthermore, BUIDL has a 100% conversion to USDC partnership. Might we see similar or different features pop up for this latest product on Hedera? Maybe we’ll see them move their holdings to BUILD like we saw with Ondo’s OUSG. Only time will tell. 

2. Chainlink Shares Purpose for RWAs, Doubles Down

Chainlink doesn’t want to be left out of all the excitement happening in the industry. So they’ve opined a piece sharing their vision, complete with reasons why Chainlink will be a dominant player in the space. Oracle services will be key to stamping data onchain for reference to a specific RWA. Inveniam popularized this concept with Real Estate. A security token may represent an interest into a real estate asset or portfolio but still may lack underlying information such as rent collection rates, vacancies, audits/ appraisals by third parties, etc. EVERY asset can be enhanced with data to offer more insight into the value of the asset - for better or for worse - which is why investors will always place a premium on more accurately valued assets with  supporting information.

3. RSRV to Open Platform to Investors on May 1st

Despite starting with an already available offering on tZERO, RSRV is set to open its doors for its new platform aimed at enabling investment access to hotels by their patrons, with the capability of adding perks like a discount or free night stay. Since RSRV is owned by the same operators as the tokenized St. Regis in Aspen, it’s not necessarily a surprise they are starting with an offer they know was already successful and showcases the RSRV model. They’ve announced that on May 1st investors will be able to start using the new platform, which is still supported by tZERO for anyone that is curious. 

Notable Mid-Week Market Headlines

Security Token Prime Member Spotlight

STP member Jonathan Chambless, CEO of LV8R Labs recently announced a partnership with Inveniam to revolutionize the construction industry using blockchain technology. Specifically, they're working on Building Information Management (BIM) for more efficient communication and management processes during the design and construction stages of building projects.

Join us next Wednesday as we explore this topic deeper and what it means for the future of commercial real estate development!

Security Token Prime is Made Possible Thanks to Our Enterprise Partners

We’ve been seeing a fair number of misnomers across the usual social channels lately when describing tokenization and real-world assets. Many of the tokenization protocols - Ondo, IX Swap, Swarm, Clearpool, to name a few - have their own utility tokens that underpin operations. Others are less DeFi-connected systems that act more as platform interfaces for issuers and investors to onboard, such as Securitize, Oasis Pro, Archax, and Black Manta Capital. These don’t have utility tokens - that doesn't mean they’re not in the “RWA” space of course.

Many on Twitter, LinkedIn, or even Farcaster have been discussing RWA performance, citing the explosive returns of Ondo’s $ONDO or IX Swap’s $IXS. Those returns are fantastic for those protocols and their own treasuries, and for token buyers on the way up. However, that’s not actually providing any exposure to real-world assets themselves. Ondo’s Short-Term US Government Treasuries Fund ($OSUG) is THE real-world asset. IX Swap’s Millennium Sapphire ($MSTO) is THE real-world asset. Swarm’s tokenized stocks and ETFs are THE real-world assets. Not its $SMT utility token. This distinction is very important as the tokenization of real-world asset narrative grows and continues to be taken more seriously. We will need to continue to see capital inflows into the actual tokenized real-world assets, not just the easy-to-buy crypto utility tokens that go alongside the protocols. Next time you see a Tweet showing numbers, returns, and RWA token recommendations, take a deeper look and ask yourself how that specific token is a real-world asset.

Peter Gaffney, Head of Research, Security Token Advisors

Security Token Advisors Client Highlights:

STA has elected to spotlight a couple of our advisory & consulting clients here.

Blue Water FinTech - STA is working with Blue Water, an SEC-registered investment adviser and FinTech platform dedicated to Mortgage Servicing Rights (MSRs) and loan servicing with 500+ originators onboarded. STA has been evaluating the tokenization ecosystem on behalf of Blue Water, who is seeking to distribute MSR and associated cash flows to investors as compliant tokens. Blue Water is one of the (if not the) leaders in MSR secondary trades by volume which could contribute to a very notable listing on tokenized secondary marketplaces when the time is right.

Arctic Digital Mining - STA is working with Arctic Digital Mining (ADM) to develop a tokenization platform geared towards Alaskan gold miners under the mission of unlocking the value of in-ground gold deposits via digital securities, and thus bringing utility to unmined gold and precious metals. Targeting a range up to 100 million gold ounces, ADM seeks to bridge the gap between in-ground gold valuations and mined & listed gold (i.e. ETFs and gold-backed stablecoins) through the GiG token. Eventually, we may see price convergence as miners, investors, and users along the value-chain elect to tap into this market directly at the source through the miners on Arctic Digital Mining’s platform.

For Consulting Inquiries or Client Details: please email [email protected]

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Herwig’s Pick: Homium

Kyle’s Pick: Centrifuge

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