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Why do Security Tokens (STs) provide such a massive opportunity for us to improve our global asset markets? I’ll try to break this down into its component parts. 
( @Security_Token)
( @Security_Token)
1/ There are a number of benefits that STs may bring to our markets. Some benefits stem from having a new digital / programmable format for assets (digitization). Other benefits stem from having a new model for how these digital assets can be tracked/owned (trustless ledgers).
2/ It’s really the combination of these two ideas (digitization + trustless ledgers) that creates the basis for disruption. This killer combo enables new forms of transparency, efficiency, sovereignty, automation, information peer-through, and speed. More on this in a second.
3/ First, how big (roughly) is the pool of global assets that can benefit from digitization + trustless ledgers?
Private Equity - $70 Trillion
Stock Markets - $73 Trillion
Debt - $215 Trillion
Real Estate - $217 Trillion
(Source: Visual Capitalist)
Private Equity - $70 Trillion Stock Markets - $73 Trillion Debt - $215 Trillion Real Estate - $217 Trillion(Source: Visual Capitalist)
4/ Second, where are these assets offered/traded as securities today? In two major places -- Public Markets (think NYSE) and Private Markets (think VC/PE/CRE). Each market has different problems/limitations.
5/ Public Markets—Today, publicly traded asset markets are fairly strong, but intermediaries play a significant role at each stage. As a result, transparency, efficiency, and asset self-sovereignty are far removed.
6/ Private Markets—Today, privately traded assets are often paper/pdf based, info-asymmetric, transfer-difficult, with poor asset peer-through / market depth. As a result, these assets suffer significant illiquidity, which negatively impacts price.
7/ So -- how does this concept of digitization + trustless ledgers start helping us solve the public/private market problems for this pool of global assets?
8/ Digitization—A standardized digital format will empower our pool of global assets to interact with the world in new programmable ways. In other words, digitization facilitates standards and programmability. I call this #TheDigitalWrapper https://bit.ly/2Ndr8xb
9/ Trustless Ledgers—In addition, trustless ledgers will allow us to track/own these digital assets with more transparency, less friction, and more self-sovereignty than any of our current markets enable.
10/ In collaboration together, digitization + trustless ledgers empower the creation of new rails that facilitate improvements in transparency, efficiency, and asset sovereignty (Public Markets) as well as asset peer-through, automation, and speed (Private Markets).
11/ Simply -- this killer combo allows us to create new infrastructure for owning/trading assets that is faster, cheaper, transparent, and more self-sovereign than ever before.
12/ Over time, the digitization + trustless ledgers combo will begin to absorb all major categories of value and create new (+ currently unimaginable) ways for us to digitally program our global assets (and the ecosystem around these assets).
13/ “On the internet, if it’s programmable, and theoretically possible -- it will happen.” @naval
14/ Shout-out to my colleague @sbmckeon for helping shape these ideas over many happy-hour conversations.
15/ Would love feedback on this rough mental model from those thinking about how/why tokenization impacts our markets:
@CaitlinLong_
@lex_node
@brucefenton
@boironattorney
@lwsnbaker
@henryelderCRE
@jorllaw
@apompliano
@Masonic_Tweets
@ovedm606
@toddlippiatt
@CaitlinLong_
@lex_node
@brucefenton
@boironattorney
@lwsnbaker
@henryelderCRE
@jorllaw
@apompliano
@Masonic_Tweets
@ovedm606
@toddlippiatt
