🤝 Security Token Prime Mid-Week Insights: 5/2/2024

Exclusive Intelligence for Security Token Prime Members

Summary and Key Takeaways

1. BlackRock’s BUIDL Surpasses FranklinTempleton’s BENJI in AUM

If you’ve been watching the last ~40 days since the inception of BlackRock’s Tokenized Liquidity Fund, you’d probably have already guessed from their meteoric growth that this product would become the biggest tokenized fund in the world - and now they’ve done it! In fact, it looks like Herwig was right about that when the announcement first came out. It’s worth noting that $BUIDL & $BENJI are currently in different stages. $BENJI has been around a lot longer, though it really saw its biggest inflows around the end of November 2022 to the beginning of April 2023, roughly some $250M, steadily adding another $100M over the following year by expanding access to different blockchains for $BENJI, which is structured to support retail investors as a publicly registered fund. Meanwhile, $BUIDL is currently limited to big ticket investors only, mostly institutions and a good chunk of it from Ondo’s $OUSG. This has brought in bigger check sizes that propelled $BUIDL to the top and we can expect this product to start offering support on other blockchains beyond Ethereum just like $BENJI did soon enough. 

2. Securitize Announces $47M Raise, Backed Announces $9.5M Raise

What a week it’s been for Securitize. We knew previously that BlackRock had invested in the company but it was unclear how much. Now Securitize has announced that they’ve closed on $47M led by BlackRock and included HamiltonLane, ParaFi, TradeWeb, Circle, Paxos, and Aptos Foundation. Meanwhile, Swiss-based Backed also announced an almost 8 figure raise with lead investor Gnosis as well as Exor Seeds, Cyber Fund, Mindset Ventures, Stake Capital Ventures, Blockchain Founders Fund, Blue Bay Capital, and Nonce Classic. What’s the takeaway here? Investing in RWA infrastructure is getting sizzling hot again! 

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.

Did you miss the webinar? Watch the replay here:

Security Token Prime is Made Possible Thanks to Our Enterprise Partners

We’re dealing with some opportunities from existing marketplaces - non-tokenized venues and asset owners, buyers, and sellers - that are strongly considering their role in tokenization. To us, this is fantastic news. The limiting factor with a number of the industry’s Alternative Trading Systems (ATSs) and comparable regulated trading venues is simply the lack of liquidity strategy behind them. Sure, we can list any asset and hope it trades, but even if it’s listed at a discount and at an attractive price point, the market won’t always organically meet that.

What’s really exciting is ushering in firms and organizations that are already plugged in as liquidity providers or with liquidity partners AND are willing (and excited) to help make markets on their own products and/or third-party products specifically on token-enabled ATSs and trading platforms. We can’t emphasize enough the importance of issuers becoming interactive and supporting liquidity in a hands-on manner with investors. This is how the industry wins.

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: Franklin Templeton

Kyle’s Pick: RSRV

Last Week’s Episode:

Catch this week’s winners tomorrow! Tune in on Fridays at 1pm EST on LinkedIn or X/ Twitter. Past episodes available on Youtube or your favorite podcast platform! 

Let us know your questions for the show ahead of time by emailing [email protected]. 

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