DigiShares has recently signed up a new white-label client in the real estate industry. Even though we are not allowed to publish the name of the client under our contractual relations, we are allowed to speak in general terms about the project and its implications.
This client is a large African real estate developer who wants to be the first-mover to the market of real estate tokenization. They see tokenization as potentially enabling them to structure and digitize many processes, as well as giving them access to new types of investors and additional liquidity through the DigiShares internal exchange. Also, they view the ability to fractionalize and democratize as an important factor both for their own company but also to the benefit of investors. The client is considering three different real estate development projects as pilots to test out the framework and the approach, with valuations between EUR 1.5 – 20 M. The client works with both residential and commercial real estate. The first project is intended to be launched on the DigiShares platform in November / December 2020.
New Grant For the second time in a few months, DigiShares has received a grant from the Danish Innovation Fund, this time the prestigious Innobooster grant which is only awarded to the most innovative and promising projects. The grant size is EUR 55,000 and it will further support DigiShares’ goal of becoming a leader in white-label tokenization solutions for real estate and other real assets.
Tokenization Webinar Remember to sign up to the webinar on tokenization on October 27 from 2 – 4 pm CET. At this event, we will give a high-level introduction to tokenization and speak about some of our projects. We will be joined on the virtual stage by world-leading blockchain researcher Roman Beck from the IT University of Copenhagen and Emilie Rieupeyroux, CEO of LiquidShare. The webinar is organized by Copenhagen Fintech.
DigiShares is a leader in the quickly growing tokenization industry and currently the only company in the Nordics of its type. DigiShares is focused on white-label partnerships where we deliver our technology and platform to our partners as well as the tokenization of real assets such as real estate, solar, wind, infrastructure, mining, etc.
Tokenization refers to the concept of issuing and managing securities as tokens on the blockchain. The blockchain infrastructure yields a number of interesting benefits for a more efficient financial infrastructure.
In collaboration with Copenhagen Fintech, DigiShares is hosting a webinar on tokenization and securities on October 27 from 2 – 4 pm CET.
DigiShares will introduce the concept of tokenization and speak about some industry use cases, most likely from real estate. We expect to be joined on the virtual stage by VP Securities, the leading Danish CSD (Central Securities Depository) and a leading researcher in the field.
DigiShares is a leader in the quickly growing tokenization industry and currently the only company in the Nordics of its type. DigiShares is focused on white-label partnerships where we deliver our technology and platform to our partners as well as the tokenization of real assets such as real estate, solar, wind, infrastructure, mining, etc.
Tokenization refers to the concept of issuing and managing securities as tokens on the blockchain. The blockchain infrastructure yields a number of interesting benefits for a more efficient financial infrastructure.
What is tokenization and why is it relevant for the real estate industry? To understand this, we need to look at bitcoin and blockchain.
Tokenization refers to the process of digitizing securities and representing them as tokens on the blockchain. The most common types of securities to be tokenized are company equity and debt instruments such as bonds. Once the security has been digitized and rendered in the form of a blockchain token, the security can be managed in a fashion that is quite similar to bitcoin and other cryptocurrencies (tokenized securities are also called security tokens, digital shares and digital assets). This has wide-reaching implications, such as the ability to store shares and bonds in digital format on your own computer or mobile device and the ability to trade these in a peer-to-peer fashion directly with the counterparty (but with no counterparty risk).
The blockchain has been described as a trust and value-layer on top of the internet. It is similar to the internet because it is decentralized and not controlled by any single central entity. It is also the facilitator of an enormous amount of new business models based on the digitization of trust and value. With blockchain, there is a trusted and agreed upon understanding among participants in a single ecosystem. This agreement encompasses who owns certain amounts of bitcoin, and who owns certain amounts of shares in specific companies. This agreement also includes their value in relation to each other as a huge decentralized and anonymous share cap table. This trusted and agreed upon understanding does not require any centralized middleman to function; it is a built-in property of the blockchain.
In addition, blockchain has for the first time enabled a digital representation of value in the form of cryptocurrencies such as Bitcoin and Ethereum, as well as “normal” currencies such as USD, EUR and GBP in digital form. Blockchain is the first technology to solve the fundamental problem of double spending where it must be impossible to spend a digital currency more than once. Therefore, it has been possible for the first time to create digital currencies that people can hold in their own digital wallets on their computers or mobile devices without relying on a bank or other central authority to safeguard it.
Why does this matter? The digitization of currencies and assets has made them programmable. It is now possible for software companies to develop financial business models that are self-contained and not hindered, slowed, or rendered uneconomical through bank integration and involvement.
On October 31, 2008, the famous research article “Bitcoin: A Peer-to-Peer Electronic Cash System” was published. This article presented the solution to the double spending problem and enabled the digital representation of assets on the blockchain. Since 2008, the blockchain industry has grown from zero to around $237.1 billion in new realized value due to (1) the ability to safeguard your own digital assets, (2) the ability to safely transfer these to others in a peer-to-peer fashion with no bank involvement, and (3) the ability to manage and manipulate these digital assets through software programs (also called smart contracts). The consensus among industry experts is that we are still in the early stages of realizing the value of blockchain. Analyzing where we are in this process, we can compare the time frame to the introduction of the Netscape browser (1995).
The growth of internet users vs growth projection of cryptocurrency users in the world. Source: Internet vs Blockchain Revolution: Are we in 1994? What to expect next? (Remi Gai)
You are probably still wondering why blockchain — and indeed tokenization — is relevant for real estate. There are several reasons. Real estate properties can be tokenized and it is typically done in two ways. Either the equity of the company owning the property is tokenized, or loans provided by investors to finance the property are tokenized. In the first case, each token refers to one share with regular dividend payouts. In the second case, each token refers to a loan note held by the investor that provided a fraction of the loan. The loan note entitles the investor to regular interest payouts. The digital share further entitles the investor to a share in a potential profit when the property is sold; a loan note often does not give that right.
Real estate represents the biggest single asset class that may be tokenized. Global real estate is around $228 trillion and only 7% of this is available to retail investors. Only 3% of the global population has invested in real estate, but more than 80% views real estate as a good investment. Efficient trading with real estate assets does not exist today and increased liquidity could potentially increase the existing market with a 20–25% liquidity premium.
The real estate industry is plagued by slow, expensive, cumbersome, and paper-based processes relating to the financing and management of projects. Financing is often done by a bank and a few trusted investors able to meet the EUR / USD 100,000 minimum ticket size. Investors are locked in for several years and there is no easy or inexpensive way to sell shares beforehand.
Tokenization of real estate assets solves all of the above problems. Most processes related to financing and ongoing management can be digitized and even automated. Due to the 100x more efficient processes, it becomes possible to manage thousands of investors in a single project and hence to reduce the minimum ticket size down to $1,000 or even $100. This gives the real estate developer access to new types of investors and new sources of capital. With the growth of the total amount of capital, the financing of real estate projects should become easier and less expensive.
Having real estate assets in a tokenized form allows for peer-to-peer trading with instant settlements. Real estate investors will be able to trade their digital shares or loan notes directly with each other in a safe and secure manner. Since the only way a security can exist in digital form outside a bank is as a token on the blockchain, this is the first time direct trading between individuals becomes possible. It only works with blockchain technology.
Last but not least, retail investors can obtain access to real estate investments. Real estate investors can now diversify their portfolios in a manner that is similar to the method wealthy investors have used for hundreds of years. This is also known as the democratization of real estate investments.
Tokenization of real estate enables developers to reduce the cost of financing and ongoing management, to target new types of investors, to more easily finance new projects, and to increase the liquidity of assets.
This is slowly becoming reality in 2020. Some of the last barriers to adoption are being removed. Knowledge and comfort with crypto is becoming more widespread. Software platforms are becoming easier to use to the point where little knowledge of crypto is actually required. Platforms that are tailor-made for real estate tokenization such as the DigiShares white-label platform are becoming better. Pioneers among real estate developers are taking steps to become entrepreneurs in their local region or market segment. All of the different puzzle pieces in the new tokenization ecosystem are slowly falling into place.
Contact us here: [email protected] if you are interested in learning more and don’t forget to visit our website to keep up with our progress. Claus Skaaning, CEO, DigiShares October 2020
Tokenize Your Real Estate
Many of our current projects are real estate tokenization projects, and for those of you who are specifically interested in real estate tokenization we have created a special page where you can learn about real estate tokenization and how to tokenize your project.
On September 3rd we completed the second iteration of Fintech Disruption Summit. You can read about the event and the program here. The focus of this year’s event was real estate tokenization, decentralized finance and tokenization of VC funds. While several speakers had experience with real estate tokenization, the tokenization of investment (and VC) funds is still an immature field. More than 200 signed up for the conference indicating that tokenization is a hot and interesting topic for many. We are now ready with the videos from the event, so you can review the best moments from the conference. All the videos can be accessed here. We are starting to make plans for the next Fintech Disruption Summit, expected in February 2021 – most likely also virtual, in consideration of COVID-19. If you are interested in speaking or sponsoring – please reach out to us.
Individual links for the videos are included below. If you are interested in tokenization and want to see the highlights, you should watch videos #2, #9, #10 and panel 1. Our personal highlights and moments of being a little bit starstruck were videos #15 (David Weild IV, Vice Chairman of NASDAQ and father of the JOBS act) and #17 (Alon Goren, top blockchain Silicon Valley VC). #1: Opening Remarks by Claus Skaaning, DigiShares Watch here
#2: Keynote; Tokenized Securities; The Future of Investment Ethan Pierse – Borderless Ventures / CryptoAssets Institute Watch here
#3: Assets on the Blockchain – A Perspective Martin von Haller Grønbæk – Bird&Bird Watch here
#4: Legal Aspects of Tokenized Securities, Compliance & Operations Boulevard A. Aladetoyinbo, Esq. Watch here
#5: Decentralized Finance – A Financial Crime Perspective Stefania Teodora Banu – Financial Crime Prevention Expert at Nordea Bank Watch here
#6: The Next Generation of Regulatory Technologies and the Ways to Implement Them Borys Pikalov – Head of Analytics, Co-Founder at Stobox Watch here
#7: Legislation for Blockchain Projects in Switzerland & Liechtenstein Yanina Petrovskaya Watch here
#8: Blockchain Real Estate Registry Oleksii Konashevych Watch here
#9: Tokenization of Real Estate and Large Physical Assets Claus Skaaning – CEO, DigiShares Watch here
#10: Real Estate FinTech: Hype or Solution? Andrew Baum Watch here
#11: Innovation moves in S-Curves Dr. Guenther Dobrauz Watch here
#12: The Future of Real Asset Investment – a Family Office Perspective Paul Huelsmann Watch here
#13: Legal and Economic Opportunities to Reduce Transaction Costs with Fragmented Ownership-Recording Jo Bronckers & Simon Duindam Watch here
#14: Panel 1: Real Estate on the Blockchain Moderator: Sam Jalaei Participants: Andrew Baum, Paul Huelsmann, Oleksii Konashevych, Jo Bronckers Watch here
#15: Why Growth Rates Will Differ Significantly: Crypto vs. Derivatives vs. Securities David Weild IV – Chairman & CEO at Weild & Co., Inc. Watch here
#16: Derisking DeFi – How to Derisk Decentralized Finance Investments Edmund Lowell – KYC-Chain.com, Passports.io and SelfKey.org Watch here
#17: Early-Stage Blockchain Investing Alon Goren – Founding Partner of Draper Goren Holm Watch here
#18: Panel 2: VC Investment Funds in the Blockchain in Sphere Moderator: Nikolaj Juhl Hansen Participants: Hazem Danny Nakib, Ethan Pierse, David Weild IV, Yanina Petrovskaya Watch here.
Many thanks again to our partners Bird&Bird, TechNordicAdvocates, Copenhagen Fintech, and The Tokenizer. DigiShares is the organizer of Fintech Disruption Summit. The goal is to educate the financial industry to better understand the value proposition of blockchain, and to motivate them to initiate more projects in the space. DigiShares provides a white-label tokenization platform, supporting the issuance, corporate management, and trading of tokenized securities. We have a focus on real assets such as real estate, infrastructure, solar, wind, etc. If you are interested in partnering with us, please reach out.
The World Economic Forum predicts that 10% of the global GDP (approx. $7.8 trillion) will be stored on the blockchain in less than 10 years.
The summit is targeted towards bankers, accountants, lawyers, stock brokers, investment fund managers, custodians, and other people from the financial industry. The purpose of the summit is to inform and inspire delegates about new opportunities with blockchain technology in the financial industry and in particular with tokenization of securities and assets.
Using blockchain technology, companies can now issue security tokens with share- or bond-like properties in order to raise funding (through an STO – a Security Token Offering) as an alternative to an IPO. Large established companies can raise additional funding through the same means, or tokenize their existing shares. As existing securities and assets become tokenized, issuers and investors benefit from easier price discovery, increased liquidity, extended trading hours, automation of processes, reduced settlement times, etc. In the near future, real estate and other investment portfolios will be tokenized for the same reasons. Collections of art, automobiles, boats, etc. can be tokenized in order to fragment ownership and other rights.
This financial revolution has already begun and the existing financial ecosystem will move towards the blockchain over the next 10 years.
Make sure you are at the forefront of this financial revolution, join the Fintech Disruption Summit!
Founder & CEO at DigiShares. Expert in blockchain business models.
Topic: Tokenization of real estate and large physical assets. Claus will review current trends and learnings in the tokenization industry, with a particular focus on the value proposition for real estate and large physical assets.
Topic: Opening Remarks by Claus Skaaning
About Claus PhD in computer science. Has worked as a researcher and technical lead for Hewlett-Packard, before founding his first company, Dezide, a software company with focus on Artificial Intelligence for diagnostics and troubleshooting. After heading Dezide as CEO for 12 years, Claus left and started new companies, including Sales on Tap, a sales and exports consultancy company, while also taking part in many other ventures. Claus has extensive experience with developing and managing incubators, being employed in the Aalborg University Innovation incubator, an incubator that accepts and helps around 80-100 startup companies every year.
Keynote: Tokenized Securities and the Future of Investment Tokenized securities are creating new business models for financing and investing in real estate, intellectual property like patents, movies, art, music, and collectibles as well as new opportunities in startup fundraising and SME financing.
Topic: Tokenized Securities and the Future of Investment Ethan Pierse – Borderless Ventures
About Ethan Ethan Pierce is a Founding Partner of Borderless Ventures, enabling cross-border capital and business scale for FrenchTech, CEE and ASEAN startups. In addition, he is the Director of The CryptoAssets Institute, evangelizing the Business of Blockchain and the Tokenized Economy. Ethan is an experienced keynote speaker, with a passion for spreading his knowledge on Cross-Border Startup Scale, FrenchTech and ASEAN startup ecosystems, Tokenized Securities, CryptoAssets, Enterprise Blockchain and the Blockchain Economy.
Partner at Bird & Bird. International legal specialist in blockchain.
Topic: Tokenization of assets, a perspective.
Topic: Assets on the Blockchain – A Perspective (Martin von Haller Grønbæk, Bird & Bird)
About Martin Martin is a partner at Bird & Bird law firm, where he works with IT and new technology from both a legal and commercial perspective. For over 20 years Martin has co-founded several IT startups. He serve on a number of boards of eCommerce, IT and web companies, where his vast knowledge about business, technology and legal matters help guide companies to success. Martin also spend a considerable portion of his time advising on legal and commercial issues related to open licensing within open source, creative commons (open content), open data, open APIs and more. In Denmark, Martin is considered a pioneer within the Internet and web industry as he introduced the concept of Internet law in Denmark back in 1994.
Blockchain and distributed ledger securities lawyer, strategy consultant, researcher, trainer, Head of Crypto-asset Capital Formation Practice at Lex Futurus Group (lexfuturus.io).
Topic: Legal aspects of tokenized securities, compliance & operations.
Topic: Legal Aspects of Tokenized Securities, Compliance & Operations (Boulevard A. Aladetoyinbo, Esq.)
About Boulevard Committee Member, International Organization for Standardization (ISO) representing Standards Organization of Nigeria (SON) in ISO/TC307 – Blockchain and distributed ledgers, which works on blockchain and distributed ledger internationally acceptable standards for the 164 countries-strong national standards member bodies). Boulevard is also a member, Cloud Security Alliance (CSA)-Depository Trust and Clearing Corporation (DTCC) DLT security framework WG.
About Stefania Stefania is currently working within Nordea Sweden as an Financial Crime Prevention Expert, with an active role in the Transaction Monitoring Controls Management. She has previously worked as a Forensic Consultant for Deloitte and has been involved in various Anti Money Laundering, Counter Terrorism Financing, Anti Bribery and Corruption and Anti Fraud projects and investigations across different industries and countries. She has also worked as an Anti Money Laundering Reporting Officer within the Insurance Industry, maintaining the liaison with the relevant national and international regulators. She has a MSc. in Innovation, Knowledge and Entrepreneurial Dynamics from Aalborg University and a BSc. in Accounting and Management Information Systems.
Topic: The next generation of regulatory technologies and the ways to implement them.
About Borys Borys is the Head of Business Analytics at Stobox, an award-winning EU fintech company with a number of digital banking, electronic payments, tokenization, and other technology tools. Borys has done 1500+ hours of research in the digital securities industry. Co-Author of the book “How to Attract Investments with STO: A Practical Guide”.
Topic: The Next Generation of Regulatory Technologies and the Ways to Implement Them (Borys Pikalov)
Topic: Legislation for blockchain projects in Switzerland & Liechtenstein
About Yanina Yanina Petrovskaya — Of Counsel, crypto lawyer, is an experienced adviser to blockchain projects with 8+ years of international legal consulting. Coming from an international consultancy background, Ms. Petrovskaya used to work as head of compliance in a fund management company before joining RLP Lawyers as Of Counsel. Yanina is a speaker at international blockchain events such as Blockchain Leadership Summit, Blockchain & Bitcoin Conference, Axess Think Tank, St. Moritz Institutional Investors Summit etc. as well as partner and lecturer of the supplementary education program Blockchain Lawyers (BCL).
Topic: The Next Generation of Regulatory Technologies and the Ways to Implement Them (Borys Pikalov)
Topic: Legislation for blockchain projects in Switzerland & Liechtenstein
About Yanina Yanina Petrovskaya — Of Counsel, crypto lawyer, is an experienced adviser to blockchain projects with 8+ years of international legal consulting. Coming from an international consultancy background, Ms. Petrovskaya used to work as head of compliance in a fund management company before joining RLP Lawyers as Of Counsel. Yanina is a speaker at international blockchain events such as Blockchain Leadership Summit, Blockchain & Bitcoin Conference, Axess Think Tank, St. Moritz Institutional Investors Summit etc. as well as partner and lecturer of the supplementary education program Blockchain Lawyers (BCL).
Topic: Legislation for Blockchain Projects in Switzerland & Liechtenstein (Yanina Petrovskaya)
Visiting PhD researcher at RMIT University.
Founder and managing partner of Emernotar.io – an online service for notarizing on the blockchain.
Topic: Blockchain Real Estate Registry. The blockchain property registry is possible, despite some skepticism among scholars. A token can represent not only securities but property rights, recent academic research shows. Such a registry can operate with land rights, corporate rights, cars, boats, aircraft, debts and bonds, literally any legal rights and derivatives. In this presentation, you will learn about Title Tokens, Cross-Blockchain Protocol, Smart Laws and Digital Authorities.
Topic: Blockchain Real Estate Registry (Oleksii Konashevych, Emernotar)
About Oleksii Oleksii is a researcher working on the use of blockchain technologies for state governance and democracy. He earned a Master of Laws in 2005 and a Master of Economics in 2010. He has spent 4 years in academic work, of which three years were fulltime as a Ph.D. fellow in the international program in Law, Science, and Technology, funded by the European government. Before academia, he practiced as a lawyer for ten years. During this period, he held senior positions at Ukrainian largest companies. Before leaving Ukraine, he also practiced in government relations and policy writing. For two years, he held the position as a manager of E-Democracy group (NGO) and consulted the Presidential Administration of Ukraine on issues of e-dem reforms. he is one of the co-authors of the Law of E-Petitions, which he introduced and advocated for, it was adopted in 2016. During his Ph.D. study, he acquired knowledge in Computer Science, with focus on blockchain and DLT technologies. He am a founder and managing partner of a startup Emernotar.io – an online service for notarizing on the blockchain.
Founder & CEO at DigiShares. Expert in blockchain business models.
Topic: Tokenization of real estate and large physical assets. Claus will review current trends and learnings in the tokenization industry, with a particular focus on the value proposition for real estate and large physical assets.
Topic: Tokenization of Real Estate and Large Physical Assets (Claus Skaaning, DigiShares)
About Claus PhD in computer science. Has worked as a researcher and technical lead for Hewlett-Packard, before founding his first company, Dezide, a software company with focus on Artificial Intelligence for diagnostics and troubleshooting. After heading Dezide as CEO for 12 years, Claus left and started new companies, including Sales on Tap, a sales and exports consultancy company, while also taking part in many other ventures. Claus has extensive experience with developing and managing incubators, being employed in the Aalborg University Innovation incubator, an incubator that accepts and helps around 80-100 startup companies every year.
Professor of Practice, Saïd Business School, University of Oxford
Topic: Real Estate FinTech: Hype or Solution?
Topic: Real Estate FinTech: Hype or Solution? (Andrew Baum)
About Andrew Has combined academic life and business for the last 25 years. Appointed Professor of Land Management at the Henley Business School, University of Reading, in 1989; Honorary Professor of Real Estate Investment at the University of Cambridge 2009-2014; Fellow of St John’s College, Cambridge 2011-2014; Visiting Professor of Management Science, Saïd Business School, University of Oxford, 2013 onwards.
Outside academic life, has spent the majority of this time working with institutional real estate investors in developing global property investment strategies. Chairman of the investment committee for CBRE Global Investors Global Multi-Manager. Chairman, NewCore Capital Management. Member of the Supervisory Board for the Schroder Exempt Property Unit Trust until 2012. Non-executive director of Grosvenor Limited, 2000 to 2008.
Specialties: Real Estate Investment Strategy, International, Consulting.
Partner & Leader PwC Legal Switzerland. Member of PwC’s Global Legal Leadership Team & Global Financial Services Legal Leader.
Topic: Innovation moves in S-Curves.
Innovation moves in S-Curves. The real trick is to determine the genre defining dominant designs. As we are now in the age of exponential technologies we also move towards Big Bang Disruption. Guenther will take his time to lead you through all of this.
Topic: Innovation Moves in S-Curves (Dr Guenther Dobrauz, PwC)
About Dr Guenther Dobrau Guenther is a Partner with PwC in Zurich and Leader of PwC Legal Switzerland where he also heads the Legal FS Regulatory & Compliance Services practise. He is a member of PwC’s Global Legal Leadership Team directing the firm’s global legal practise in 90+ countries as well as PwC’s Global Financial Services Legal Leader and former Global LegalTech Leader. Guenther specialises in structuring, authorization and ongoing lifecycle management of financial intermediaries and their products. His passion as a practicing tech-enthusiast since 2002 is innovation linked to Exponential Technologies with a particular focus on achieving decentralization and he has also been working to promote sustainability since 2010 where he advocates a systemwide change towards a circular economy. He is the author of three books on innovation and disruption and of five books on European, Swiss and Liechtenstein regulation. He also authored and co-authored 100+ publications in international expert magazines and has to date been speaking at more than 200 conferences worldwide.
Next to being a lawyer, Guenther is an entrepreneur and innovator in the legal field fully embracing technology. His believes that his job first and foremost is to provide an inspiring and rewarding environment that allows talent to grow on the basis of what he considers to be the future of legal services: interdisciplinary and diverse teams of passionate specialists working together on the basis of trust and respect and as part of a truly global legal network but also closely connected to all the other areas of expertise within PwC. He fundamentally believes that regulation has become a strategic dimension and he is passionate about translating legal into business with his team of great Swiss and EU attorneys and lawyers.
He is also passionate about rock music (really his second biggest love after his wonderful family), vinyl records & custom motorcycles. Always interested in innovative ideas, exchange on innovation, legal & regulatory subjects as well as legal talent to join his team.
CEO FINEXITY AG | Top 10 FinTech and InsurTech Innovators in Germany 2020 – Business Punk.
Topic: The future of real asset investment – a Family Office perspective
Paul Huelsmann is the CEO and co-founder of FINEXITY – one of Europe’s pioneering tokenisation platforms for both retail and semi-professional investors. During the presentation Paul will give an in-depth overview on how to tokenise real assets, how investors can benefit from MiFID II-conform tokens in addition to how Asset Managers can benefit from new ways of raising capital in the most cost-efficient manner.
Topic: The Future of Real Asset Investment – A Family Office Perspective (Paul Huelsmann, Finexity)
About Paul Paul is an experienced commercial manager with a demonstrated history of working in the Infrastructure sector. His strength is program and project management, and he is skilled in ICMS2 elemental cost planning, procurement, parametric estimation, RICS BIM Project Manager, Blockchain FIBREE London chair, BSI committee member for life cycle costing and RICS CPD trainer.
FIBREE co-founder, board member and regional co-chair in the Netherlands.
Topic: Legal and economic opportunities to reduce transaction costs with fragmented ownership-recording
Topic: Legal and Economic Opportunities to Reduce Transaction Costs with Fragmented Ownership-Recording
About Jo Jo Bronckers is co-founder and vice-president of FIBREE, the Foundation for International Blockchain and Real Estate Expertise (www.fibree.org). In addition, he has been active with his own consultancy firm since 2018 to advise and support organizations in corporate development at the intersection of real estate, finance and digitization. Bronckers studied real estate management and project development at Eindhoven University of Technology. He worked for various organisations in the field of Institutional Real Estate Investment, Asset Management and Financing, including FGH Bank, Rabobank, DLL, IVBN and Vesteda.
Topic: Why Growth Rates Will Differ Significantly: Crypto vs. Derivatives vs. Securities
Topic: Why Growth Rates Will Differ Significantly: Crypto vs. Derivatives vs. Securities (David Weild IV)
About David David Weild is Founder, Chairman and CEO of Weild & Co. He is a noted expert on capital markets and capital formation who has testified before the U.S. Congress at the House Subcommittee on Capital Markets and Government Sponsored Enterprises, the SEC, and in front of the 34-member nations and the European Commission for the Organization of Economic Co-operation and Development (OECD). He is regarded by many as the Father of the JOBS Act for studies that he co-authored that were the first to identify and characterize the long-term structural decline in the IPO and listed company markets.
In September 2017, Mr. Weild was named one of twenty Visionaries and one of ten StartUp Entrepreneurs in The World’s Most Influential People in Market Structure, a book by Patrick L. Young. From 2000 to 2003, Mr. Weild served as Vice Chairman of The NASDAQ Stock Market in charge of the Corporate Client Division with line responsibility for NASDAQ’s 4,000 listed companies. He created NASDAQ’s Market Intelligence Desk, Corporate Services Network and dual listings strategy which ultimately resulted in listing Charles Schwab and Hewlett Packard. While at NASDAQ, Mr. Weild had the privilege of working with such luminaries as Howard Schultz (Starbucks), Tom Stemberg (Staples), Craig Barrett (Intel), Michael Dell (Dell Computer), Steve Jobs (Apple, Pixar, NeXT Computer) and others. He also had the privilege of working with NASDAQ senior management, the SEC, the U.S. Treasury and the U.S. Congress to reopen the U.S. stock markets in the aftermath of 9/11 and had the honor of leading his team to work with NASDAQ listed companies to implement share repurchase programs as a safety net to help investor confidence when markets reopened.
Mr. Weild headed equity capital markets and corporate finance at a top-ten underwriter of IPOs and follow-on equity offerings. During his career, he has participated in managing more than 1,000 public equity offering transactions.
Mr. Weild holds an MBA from the Stern School of Business and a B.A. degree from Wesleyan University. He also studied on exchange at The Sorbonne, Ecole des Haute Etudes Commerciales, and The Stockholm School of Economics. Mr. Weild is former Treasurer of The Bond Club of New York.
David holds FINRA Series 7, 24, 63, 79, 82 and 99 licenses.
Serial Entrepreneur: KYC-Chain.com, Passports.io and SelfKey.org
Topic: Derisking defi – how to derisk decentralized finance investments.
Topic: Derisking DeFi – How to Derisk Decentralized Dinance Investments (Edmund Lowell – SelfKey.org)
About Edmund Originally from the United States, graduating from Northeastern University in Boston Massachusetts where he studied law, finance and technology, Edmund Lowell is a serial entrepreneur living in Asia since 2011, innovating at the crossroads of finance, technology and legal fields. Edmund has built a number of Fintech and RegTech products during this time including Incorporations.io, KYC-Chain.com, Passports.io and SelfKey.org The SelfKey foundation raised 21m USD during an 11 minute public sale for the sale of the native KEY utility token. The SelfKey software has processed KYC for over 150,000 identity owners and over $200m USD in transaction volume since Q4 2017.
When we think about tokenization of assets the first thing that comes to our mind is the real estate sector. Indeed the biggest interest we are experiencing at DigiShares comes from this field. Till recently investors in this sector had to invest big amounts, especially when they wanted to get an attractive ROI. Nowadays, thanks to the blockchain technology and our security tokens’ issuance platform, investing in real estate becomes more and more accesible to retail investors allowing them to buy even for a little amount of money a fraction of e.g. a big development project.
However, there are many other alternative kinds of investments we’re exploring and working on. The real estate model can be easily transferred to the energy sector. Our tokenization platform can facilitate funding not only of a solar or a wind farm but also e.g. of a biogas or a biomass plant. The holders of such digital shares will be receiving a dividend that reflects the share in the revenue of the energy company which is generated thanks to the tokenized investment project.
When you think big you can also use tokenization to fund big state or public infrastructure projects like e.g. a clinic, a school, a bridge, a highway, heating or telecomunication facilities, pipelines, railways, IT or water infrastructure. The token holders will earn dividends either on the revenue a project gets from end users or on the lease paid by the (local) authorities. Infrastructure long term tends to be less volatile than e.g. equities and provides higher yields.
There’s been also a growing interest in the mining industry. Our solution can help collect funds to open a new mine or tokenize already mined precious metals or diamonds. The investors of such projects will be holding tokens backed by the value of the mined minerals and will be able to trade them accordingly to their value changes.
One of the alternative investments that has been recently booming is fine art. On daily basis we hear about a new auction record and the highest price ever paid for different pieces of art. Thanks to our tokenization platform fine art investors will not have to go out of the house and spend lots of money on a complete piece of art. They will have the opportunity to own fractions of many of them. It will spare them the necessity and costs of keeping it safe, putting all their money in one asset vs. diversification and will give them the access to the most known and valuable pieces of art.
Another great example is the marine shipping sector which carries out most of the world trade flows. In order to buy new vessels and expand their fleets, shippers borrow huge amounts of money. Investors who are not afraid of volatility may be rewarded with attractive dividends if they go for companies that lease their ships to customers at the going market rate, the spot market. Those who prefer lower but more stable and predictable ROI may choose to invest in shipping companies that offer their clients long-term agreements with a fixed price. Tokenization will help shipping companies fund their new vessels in a cheaper, quicker, and more efficient way and will bring them a new stream of retail investors.
If you find these alternative assets relevant to you, or you thought of others that could be tokenized, contact us to arrange an introductory call.
DigiShares has recently signed up a new white-label client in the real estate industry. Even though we are not allowed to publish the name of the client under our contractual relations, we are allowed to speak in general terms about the project and its implications.
The project is based in the US and will work under the jurisdiction of Wyoming. Wyoming is one of the most forward looking jurisdictions world-wide when it comes to tokenization. They have recently introduced and passed a bill that allows corporate stocks to be tokenized (i.e., issued as tokens on the blockchain). In addition, a Wyoming-based LLC can be created for as little as $150, making Wyoming a perfect spot for US-based tokenization platforms that want to run frequent STOs (Security Token Offerings). The project expects to conduct 10-20 real estate tokenization projects already in year 1. With the very low cost of a Wyoming-based LLC, this becomes realistic.
As opposed to this, Europe as yet doesn’t have any inexpensive jurisdictions to set up tokenization projects. To begin with, there are only a few countries (Switzerland, Liechtenstein, etc.) where the legalities of tokenized securities have been reasonably clarified, but in these countries average fees per tokenization project easily exceeds EUR 100,000 including incorporation costs, legal fees, banking fees, etc. DigiShares is constantly monitoring jurisdictions and will always maintain an up-to-date overview of this with recommendations.
For this particular project, we are collaborating with Polymath and will use their standardized security token protocol framework, ERC1400. ERC1400 is a flexible and open source framework that is available for any tokenization project to use. It is a set of smart contracts for the issuance and management of security tokens, including modules for document handling, token transfers, whitelist management, and fungible tokens. The DigiShares platform is blockchain agnostic and can use most security token protocols. Currently around 95% of all STOs are carried out on Ethereum-based protocols but given the soaring Ethereum gas fees (up several 100% since January), other options such as Stellar, Tezos, EOS, etc. may suddenly become more attractive. Just these last couple of days there have been rumors of Ethereum gas fees upwards of $100.
We are also going to be integrating with Coinbase for their custody solutions. Investors’ wallets will be set up with Coinbase and through their custodian framework assets stored in Coinbase wallets will be insured. On-boarding and payment will also be carried out through Coinbase’s APIs.
The project is a co-development project where we deliver our standard multi-STO platform with investor management, corporate management, and trading, with some added functionality based on special requirements from the client. We expect to finalize the first deliverables in September such that the first real estate projects can be listed on the platform already in the second half of September.
On the business side, the client has the vision to become one of the leading platforms for real estate tokenization in the US, with already more than a hundred properties signed up to be listed on the platform.
Tokenize Your Real Estate
Many of our current projects are real estate tokenization projects, and for those of you who are specifically interested in real estate tokenization we have created a special page where you can learn about real estate tokenization and how to tokenize your project.
We are back after the summer break and busy again, in fact we were quite busy over the summer holidays with many new exciting developments both on the technical and business side.
The DigiShares platform is being expanded all the time, mostly based on customer demands. Currently we are working on custodian integration, transparent wallet setup and integration, and atomic transfers.
Custodians and Wallet Setup DigiShares believes that the security token ecosystem will increasingly move towards custodied wallets, rather than self-managed wallets. The standard blockchain mentality is biased towards self-managed wallets since you are then 100% in control of your tokens (“not your private keys, not your bitcoin”), but in fact a majority of crypto users do not currently hold their private keys. Rather their crypto is deposited with an exchange, a DeFi provider, or a custodian. Many leading exchanges and DeFi providers deposit their customers’ crypto with custodians. Custodians provide insured wallets and accounts such that you are protected against any loss or failure on the service provider or custodian’s side. However, increasingly custodians also give you highly flexible and user-friendly wallets such that a custodied wallet has almost the same flexibility and functionality as a self-managed wallet.
Investors in the security token ecosystem with large holdings and institutional investors will not accept self-managed wallets but will always demand custodied wallets. We believe this requirement will gradually extend to accredited and retail investors as well.
Our white-label partners will be able to offer their users custodied wallets that are transparently created and managed by the DigiShares platform, as well as self-managed wallets, that the users create and manage on their own.
Atomic Transfers An atomic transfer is defined as a purchase or trade where all transactions either succeed or fail. It is the essential component of decentralized exchanges where users have to be 100% sure that if they purchase some crypto and provide payment, that they also receive the desired crypto. Technically an atomic transfer is implemented as a smart contract that acts as a safe or an escrow. The buyer transfers their payment to this smart contract, and the seller transfers the tokens to be sold. Once both parties have transferred, the smart contract will release the payment to the seller and the purchased tokens to the buyer. If the contract fails for some reason, the payment will revert to the buyer and the tokens to be sold will revert to the seller.
The atomic transfer removes any counter-party risk and is unique for blockchain applications in that it can happen in a peer-to-peer fashion. Without blockchain, a trusted central party would be required to facilitate the transactions, such as a lawyer providing an escrow account at a high price.
DigiShares is now implementing atomic transfers to support both the purchasing and trading functions on the platform, such that for instance when a number of tokenized shares in a real estate project are purchased, and the payment is made in crypto or stablecoins.
Next week we will be back with a newsletter describing a new white-label client in the real estate industry.
We are proud to announce that DigiShares has received a prestigious grant from the Danish Innovation Fund, the “Innofounder” grant. This grant is only awarded to the most innovative companies in Denmark and only to projects that are innovative, scalable and with a high likelihood of actually penetrating significant markets.
The size of the grant is around EUR 62,000 and it is paid out to the top 5-10% of applicants in each application round.
The focus of DigiShares’ grant will be to further develop its capabilities within the real estate tokenization space with a focus on issuance, corporate management, and trading. DigiShares’ long term vision is to help facilitate the democratization of the real estate investment market and make it 10x more common for retail investors to include real estate in their investment portfolio.
Claus Skaaning, CEO of DigiShares, says, “The awarding of the grant is a stamp of recognition on DigiShares’ strategy and technology and will longer term make it easier for us to collaborate with large real estate developers and institutional investors. With the Innofounder and other grant programs, the Danish Innovation Fund has made it significantly easier for companies with experimental break-through innovations to get to market. We are very grateful for the recognition and support.”.
We are proud to announce that DigiShares has been chosen for Holt Selection Day. Holt Selection Day is the final competition to select the 10 teams to enter the Holt Accelerator’s 2020 cohort.
The Holt Accelerator is among the world’s leading fintech accelerators. It is based in Canada and is a recognized route into the North American market as well as the institutional markets.
For its 2020 cohort, Holt received 724 applications, and the top 3% were selected for the Holt Selection Day. We are proud to be among the 24 teams selected.
The Selection Day is an intense competition where participants pitch to 130 advisors in 16 rounds. The Selection Day for 2020 is today, June 16th.
DigiShares views the Holt Accelerator as an important and efficient element of our go-to-market strategy. If selected for the 2020 cohort, it will help us accelerate our global business strategy, to be on the forefront of tokenization, and to be increasingly working closely with established financial services and capital markets companies.
