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⚡️Hey Zeus Fans! Every week we share the latest news in the crypto and tokenized assets industry, with our comments and thoughts on why it’s important to us, and its users! Here's what’s been going on in the past week:
1. Libra - A Step Towards Mass Adoption Or Just Another Stablecoin?
Q: Does this mean that blockchain adoption is just around the corner? What’s a bigger sign of general technology adoption, Facebook’s Libra in your phone (ie. you know, it’s there, and you use it), or IBM/Microsoft/Intel using blockchain protocols (you don’t necessarily know it’s there, but you still use it, like “Intel inside”)?
A: One thing we are sure about, is that digital currencies and blockchain technology just took the global stage with this news. However the technology (backend, and UI/UX) will be implemented in Libra, it’s going to be a global payment and merchant system, based on familiar interface, and already existing user base. And simply due to the sheer volume of Libra user base, we will enter mass adoption of blockchain as soon as the ecosystem is out.
Also, the announcement has just opened an arms race, and companies, that work with payments and investments, goods and services online, payment settlements, data exchange and other clear use cases, will have to have a response to such a rival coming to the market, however long it will take Facebook to do it.
The Takeaway: This whole development with Libra will hopefully allow us to see the start of blockchain adoption, with such a large worldwide company getting into the mix. With Facebook being under a microscope nowadays, security will also be a major factor in terms of usage and adoption. At this point only time will tell, and only then will we know if Libra will help blockchain adoption, or hinder its developments.
2. Seychelles Will List The World’s First Regulated Security Token On A National Stock Market This Week
Stock markets in Seychelles, Switzerland, and Gibraltar have been racing to list the first regulated security token on a national stock market, and that race is expected to end this week! MERJ Exchange, the company that runs the stock exchange in Seychelles, will list their tokenized equity in the coming days. This marks the first stock exchange to list a tokenized security for trading, which is a great sign of things to come. MERJ also plans to cut costs for investors and issuers by using blockchain technology to increase efficiency on a number of securities markets processes, including issuance, shareholder registers, compliance, distribution and voting.
“We truly believe this technology will be one of the key steps toward democratizing access to global access to the capital markets,” said MERJ Exchange CEO Edmond Tuohy.
The Takeaway: This development potentially marks the beginning of the rise of asset tokenization, and is providing a big stepping stone for other institutions to follow. However, for others to follow in the footsteps of MERJ, they have to overcome the many regulatory hurdles that prevent them from doing so. At the moment, there is no well-regulated institution that does listing, trading, clearing, settlement and registry that’s using distributed ledger technology. But that is soon to change, as many other institutions plan on listing tokenized shares for trading such as Gibraltar Stock Exchange, London Stock Exchange, and Swiss exchange company SIX.
The rise of security tokens on national stock markets will provide many advantages and benefits for investors such as removing the need for middlemen, reduced fees, faster execution time for successful issuance of security tokens, easier liquidation, allows simpler and cheaper cross-border asset transfers, and much more! Hopefully, now that security tokens are on the centre stage, it will allow for investors to see the many benefits it can provide, helping them save time and money.
3. Non-fungible Tokens: Another Industry Destined to Fail
“Several years ago, the non-fungible tokens tried to make a lasting mark on the cryptocurrency and blockchain industry. Fast forward to today, and it seems this industry is already running on its last legs. Despite some projects still noting strong volume, attracting users from outside of the cryptocurrency industry remains the biggest problem to overcome. Prominent names are Decentraland, Cryptokitties, MLB Champions, and Etheremon, among many others. Despite all of these projects offering something different from one another, it seems the overall interest in these projects has waned significantly.”
The Takeaway: Non-fungible tokens represent exotic assets like collectables. Each token is unique, creating digital scarcity with blockchain network participants knowing how many are in circulation. However, we do need to point out that these tokens come in different forms, bringing different opportunities. For example, currently, retail investors lack the opportunity to buy an ownership share of a rare piece of artwork since auction houses such as Sotheby’s and Christie’s control a majority of secondary art markets from the world’s financial centres. Tokenizing this asset class means that smart contracts are used to create joint ownership of artworks or art collections stored in museums.
On the other hand, tokenizing intangible assets was seen as an opportunity at first. As we see the volume and transactions dropping, (some projects noted 15 transactions or less, with under $500 in weekly volume) the nature of the underlying asset comes to mind. Soft non-fungible assets have been traditionally hard to quantify and evaluate. It generally has low liquidity and rare windows of sale. Looks like representing it on the blockchain is not helping develop this market, including price discovery, rights attribution, generating business models, and so on. This could be influenced by the high volatility of the crypto market overall, and the tough task of on-boarding more people.
The beginning of the blockchain era was marked by a variety of projects and new asset types appearing and evolving. We are merely seeing the industry maturing and correcting itself.
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