A report entitled “The State of Smart Securities: 2019” was updated and released this week and provided data and educational material on the digital securities industry, including the benefits of digital securities, the evolution of capital formation, key segments of the ecosystem, case studies, and where the industry is headed.
The “State of Smart Securities: 2019” report was produced by the investment firm NovaBlock Capital in addition to Ownera, the first institutional-grade network for digital securities, and CIS, the leading investment focused blockchain conference. The three teams all serve different aspects of the digital security industry- asset management, research & advisory, event marketing, and an asset ownership protocol – the report is well-represented in offering different viewpoints of the industry.
“We are ecstatic to be releasing the second version of the State of Smart Securities report. When we first released the report, we understood how nascent the industry was and we feel validated to see so much progress since the beginning of the year. This year alone, we saw commercial and residential real estate properties tokenize, a $200 million bond tokenize on the ethereum blockchain, tokenized venture funds, and numerous other experiments using the digital security model. We expect this activity to continue to gain steam and become the standard in the coming years.” – Leeor Shimron, CEO of NovaBlock Capital.
The report can be found here.
Evolution of Capital Formation
The report starts by explaining the evolution of crowdfunding, from the 2012 JOBS Act and the genesis of platforms like GoFundMe and Kickstarter to the rise of the Initial Coin Offering (ICO), and finally the Smart Security Offering (SSO).
1) JOBS Act/ Crowdfunding begins
2) Initial Coin Offerings
3) Smart Security Offerings
Introduction & Benefits
The report introduces and defines the concept of a smart security. It then discusses the market size, various applicable asset classes, and the programmatic breakdown of smart securities.
Additionally, the benefits of smart securities were discussed- including fractional ownership, automated compliance, and rapid settlement. The report showed how smart securities have led to operational efficiencies such as increased liquidity and cost reduction.
Benefits of Smart Securities:
– Fractional Ownership
– 24/7 Global Market
– Automated Compliance
– Rapid Settlement
– Cost Reduction
– Increased Liquidity
Segments of the Ecosystem
There are several key segments within the smart securities industry which include broker dealers, issuers, custody providers, and trading/ exchanges. The broker dealers have the authority to sell securities and structure the offerings for investors. The issuers are technology providers and write the contract code to tokenize the assets. The custody providers ensure security for the assets. Lastly, the exchanges provide liquidity for digital assets and a marketplace for buyers and sellers.
Collaborative Nature of Report
Alon Goren, co-founder of Ownera and CIS, spoke about the collaborative nature of putting the research together:
“We knew that NovaBlock offers a ton of value when it comes to investment and advisory, so we wanted to collaborate and access that valuable industry insight. Collaboration in this case tells the whole story of where the digital security industry is today. A lot of people understand the value of digital securities, but there is a dearth of substantive analysis backing it up. We’re excited to team up with other experts and compile the data.”
All of the experts featured in the report will be at CIS on October 15-16, and will discuss the report findings with attendees. All those attending CIS will have an opportunity to participate in a special educational track dedicated to security tokens.
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