⚔️ The battle of the tokens (ATS Edition)
📊 Exodus is now trading on Securitize Markets and State Street is adding crypto to its toolkit!
Welcome to the 31 new Rainmakers who have joined us since last week. Join the 2,424 others who are laughing, learning, and staying at the forefront of tech every week!
Gooood morning, Rainmakers! ☀️
As always, I have two captivating topics for you to dive into:
1️⃣ ⚔️ tZERO vs. Securitize Markets: Exodus is now trading on both marketplaces... will there be an arbitrage opportunity?
2️⃣ 🛣 State Street is on the right street: State Street is partnering with Copper to enable digital asset solutions for its clients!
Without further ado, it's time to…
Get liquid 💧
⚔️ tZERO vs. Securitize Markets
The date is January 2019 and the tZERO ATS began trading its first security token.
Since tZERO's inception, there have been numerous marketplaces that trade security tokens, but none of them have been able to match the liquidity and trading volume of the tZERO ATS.
The question is... will they be able to retain their dominance for years to come?
Well, they may not be able to forever because Securitize Markets, a subsidiary of the Securitize platform, is gaining ground.
For the first few months of their ATS going live, there hasn't been anything substantial, until this past week...
The Exodus security token commenced trading on the Securitize Markets ATS!
This is significant because the Exodus (EXOD) security token has been exclusively trading on the tZERO ATS.
Indeed, David, this is a very important moment.
This is an important moment for us all because Exodus is the most high-profile security token we've had thus far.
Don't take it from me though, the numbers don't lie! ⬇️
A few key Exodus highlights (per Securitize):
| Raised $75M from ˜7K investors.
| Over $95 million in revenue in 2021.
| +350% year-over-year revenue growth (2021 vs. 2020).
| Monthly Active Users grew by 122% in 2021.
| Strong balance sheet with $128 million in available liquidity.
The Exodus STO enabled the average joe to get in at pre-IPO levels of an established company... something we've never really seen before.
The juiciest part about all of this was the fact that the STO was conducted via the Securitize platform, but has been exclusively trading on the tZERO ATS.
Those of you who know me, know that I am an advocate for frictionless processes.
To force the Exodus investors who already had to go through the KYC/AML process on Securitize and have them do it again on tZERO... is a big no-no for me.
Since Exodus commenced trading on tZERO, it has been trading at a considerable discount in relation to its 'IPO' price of $27.42.
It dropped to a low of $9 and as of 03/16/2022 is trading at $14!
Something just doesn't add up here...
I went back to the drawing board and came up with the only theory that made logical sense to me...
The vast majority of people who invested in the Exodus offering on Securitize never opened up a tZERO account.
In essence, this means, there are dormant Exodus investors on Securitize who will now be able to trade the Exodus security token.
Through the first week of trading on Securitize, there has been only $500 of volume at $20/share.
That's a $6 difference between tZERO and Securitize ($14 on tZERO and $20 on Securitize).
This tells me there is a legitimate arbitrage opportunity here!
Of course, there isn't enough historical trading data to make any definitive claims on which trading venue is superior, but will most definitely be intriguing to keep a close eye on.
🛣 State Street is on the right street
Founded in 1792, State Street has worked tirelessly over centuries to position itself as one of the world's leading providers of financial services to institutional clients.
With $40.3 trillion in assets under custody and $3.6 trillion in AUM (as of 03/31/2021), they have a substantial fiduciary duty to serve their clients to the best of their abilities.
In order to retain dominance, State Street knows that adopting new innovations and disrupting technologies should be the main focus.
In the past couple of years, the demand for digital asset services has skyrocketed, with more and more incumbent institutional players entering the space.
State Street has been listening intently to these demands as they are working on developing a digital asset custody solution with Copper.
What's Copper, you ask?
Copper is an institutional-grade digital asset custody, trading, and settlement solution for institutional clients.
Copper has the digital infrastructure to fulfill institutional clients' needs when it comes to crypto and State Street has clients who are yearning to add digital assets to their balance sheets.
Global Head of State Street Digital, Nadine Chakar, had this to say on the matter:
“As institutional investors’ interest in digital assets continues to grow, we are building the financial infrastructure needed to support our clients’ allocations to this new asset class."
It's important to note that State Street’s product offering is subject to regulatory approval.
Regardless of the regulatory approval or disapproval, it's exciting to see traditional institutional players entering the digital asset ecosystem!
💦 What else is Drippin’
Bored Apes NFT project gets official ‘ApeCoin’ token: Bored Ape utility token goes live!
The State of Security Tokens 2022 — Ratings for Security Tokens: Peter Gaffney talks about tokens and how fixed-income security tokens are being rated!
Class action suit against Coinbase alleges unregulated securities sales: Coinbase could be delisting some cryptos, if seen as unregistered securities.
Thanks for tuning in! Keep an eye out each Monday for the next security token adventure 🧗♀️
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• No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through the platform of an intermediary (funding portal or broker-dealer); and
• A person’s indication of interest includes no obligation or commitment of any