The security token wave is growing, will you capitalize or sit on the sidelines?
Gooood Morning Rainmakers,
This week, I have a motivational quote from the one and only Albert Einstein:
“A ship is always safe at shore but that is not what it’s built for.”
Go kill it this week and…
Get liquid 🌊
SLS Lux is being tokenized 🎉
There's a saying that goes “Put your money where your mouth is."
It essentially means, you better be taking action on what you are saying.
If you don't take action on your words, then you can damage your reputation.
That brings me to my next point…
Who else has been spreading the security token gospel more than the Security Token Market team?
Not only do we breathe, sleep, and live security tokens, but we just became neighbors with one!
Just this past week, BPN Capital Group announced that the commercial section of the SLS Lux is being tokenized.
For those of you who don’t know, the SLS Lux is one of the most coveted buildings in Brickell (a neighborhood in Miami).
Overview of property:
SLS Lux, a 57 story, 450 unit premier residential condominium and hotel tower. Located on the northeast corner of S Miami Avenue and SE 9th Street, one block away from Brickell City Centre and across the street from Mary Brickell Village.
The CEO of BPN Capital Group had this to say:
"This is like the moon landing for blockchain. We are tokenizing a first-in-class fully stabilized property with sophisticated tenants like Chipotle, Ojo de Agua, Kaori, and Bellillo.”
I just had lunch at Chipotle, so you're welcome in advance to all future investors, I am keeping the lights on for you.
BPN Capital Group, the company behind this project aims to level out the investment playing field by democratizing the capital markets.
I do not have the deal terms yet, but it looks like they will be raising capital for a structured debt product, while utilizing the Regulation D 506 (c) private securities exemption.
Let's get basic:
Reg D 506 (c) is a ruling that allows private companies to raise capital from accredited investors, with the ability to solicit the investment offering to the public.
When the SLS Lux investment offering closes, investors will be able to trade their share in the property on a secondary marketplace, just as you do with a share of Apple or any other publicly-traded company.
The whole world is being tokenized and it's going to allow us to diversify our portfolios in ways that weren't possible before.
Public or private blockchains? ⛓
Most people don't know this, but there are actually two main archetypes of blockchains, public and private.
Public blockchains are the most widely adopted archetype - Ethereum being the most utilized network.
Let's get basic on blockchains:
Public blockchains, in the simplest terms, is a glorified database that displays a public ledger of transactions that is permanent and powered by a decentralized computer network.
Private blockchains are essentially the same thing, but the network and validators of transactions are controlled by either a single entity or a group of verified entities
Whether or not a public or private blockchain should be utilized is neither here nor there, it's more about what the entity or application is trying to achieve.
More specifically, in the security token industry, we need to follow all of the regulatory rulings to the tee just as the traditional financial markets do.
In the current state of the U.S. financial system, I believe that private blockchains are ideal for security tokens.
Firstly, the U.S. has yet to approve a blockchain marketplace for transacting security tokens.
For example, tZERO, the leading security token secondary marketplace, records all of the transactions on their marketplace on a blockchain in conjunction to the traditional infrastructure, so that when the SEC does approve a blockchain-based marketplace, they are ready to make that transition.
Secondly, enforcement organizations like the SEC always want to have some sense of control.
With public blockchains, you don't have control, you are just another user on the network.
With private blockchains, instead of it being controlled by a wide array of people around the globe with different intentions, you can create a closed-end system where the entity or entities make the rules for what happens on the network.
If this is confusing, don't worry, I don't expect you to understand it the first time.
Think of it this way:
Imagine a kindergarten class filled with kids.
A public blockchain would be all of the kids doing whatever they wanted, with no authority saying what you can and cannot do.
A private blockchain would be the same classroom but with a teacher or group of teachers enforcing the rules to create a more efficient and organized class.
Both blockchains have their pros and cons, but for the stringent financial system that exists, we need to have absolute certainty and clear rules.
As I alluded to earlier, private blockchains are controlled by a select set of entities.
Lately, Polymesh has been adding entities to help power the private blockchain.
These include Tokenise, Saxon Advisors, and just this past week, Scrypt Asset Management.
I'd anticipate them adding more in the near future.
I am excited to witness security token issuers utilize private blockchains to create a more secure, efficient secondary marketplace!
What else is making it rain ☔️
SPiCE VC is No Longer Listed on Fusang Exchange: SPiCE VC is now exclusively trading on OpenFinance
Liberty Fund Announces The World's First Single Tenant Net-Lease STO: This STO will focus on single tenant real estate properties
Polymath Adds a New Node Operator to The Polymesh Blockchain: This node operator is Scrypt Asset Management
Fun fact of the week 🤯
What was Abraham Lincoln's profession before becoming the 16th president of the US?
Hint: He was an athlete
Reply to this email with what you think the answer is!
If you are right, we will shout you out on our socials 💯
Connect with us ☎️
Thanks for tuning in! Keep an eye out each Monday for the next security token adventure 🧗♀️
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Everything in this report is for informational and entertainment purposes only. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.