One of the most common questions we hear from potential investors is “What do I actually get if I invest in digital securities?”
Is it an actual token or coin you can hold in your hand? Are you sent a piece of paper in the mail? A file of some kind sent to your email? A number in a crypto wallet?
In fact, we suspect a lot of people actually don’t ask these questions because they’re afraid they’ll seem stupid. But it’s actually not a stupid question at all. (If you’ve joined us for any of our webinars lately or taken our course for real estate professionals, you’ll know there are no stupid questions when it comes to tokenization!)
SolidBlock CMO Yael Tamar recently chatted with host Manny Alicandro on his show Manny’s POV and he asked her about this question as well. Yael quickly put him at ease, explaining that it’s far easier to invest in tokens than most potential investors think.
SolidBlock’s new marketplace actually creates a steamlined end-to-end platform so that investors don’t have to visit multiple sites or use different apps to juggle their digital investments. Most importantly, investors don’t have to already own crypto or have a wallet already set up. SolidBlock makes the onboarding process easy, even if you’ve never used the technology before.
“Investors go in [to the marketplace] and make decisions about what to invest in,” said Yael. “They can pay with fiat currency: U.S. dollars, Euros, or whatever they want to use; they can use Bitcoin if they want to. And what they get back is a ‘digital security,’ but they don’t have to have any special infrastructure of their own to hold it.”
The digital security itself is a file which is held by a regulated, authorized custodian so users don’t have to get involved in the technical aspects of the deal.
As Yael explained, that’s because everything happens within the SolidBlock marketplace, which takes care of all the technical aspects of the transaction. So token holders don’t have to do anything special or have any technical knowledge to keep track of their investments – any more than you need to know how to hand-crank a gas motor to drive a car. It’s all displayed clearly in a clear and understandable visual dashboard.
“They see their holdings through the interface. They can check on how their assets are doing, what kind of trade volume they’re experiencing.” And most importantly, Yael added, “They can do over the counter trading (OTC) on the platform.”
This OTC trading capability lets individuals buy tokens not only from asset owners during the STO phase, but also secondhand tokens from other marketplace users. “The project never goes off the market,” Yael said. “Even if they’re finished raising funds, the tokens are still there because sooner or later, somebody will want to sell. And if I really want to get into a project that’s already been funded, I can send a request and maybe some investors will choose to liquidate their holdings. It all depends on supply and demand. And that’s the beauty of it.”
This natural marketplace dynamic could potentially increase tokens’ value through supply and demand, and may actually increase the value of the underlying property asset as well.
In fact, stability and growth potential are two more benefits of tokens versus some traditional securities. One reason for this, Yael explained, is that during an IPO, it’s common to inflate the value of a company offering. “There are different benchmarks and comparables… it’s very, very subjective.” With an STO, on the other hand, the value of the initial offering is based on an objective appraisal done on the underlying asset according to well-defined industry standards. Therefore, the potential for instability based on inaccurate valuation is much less.
We know you’re going to be fascinated to watch the entire conversation, touching on valuation, secondary trading, and much more. Click through to watch the entire interview.
And to receive exclusive advance notice as soon as SolidBlock’s industry-leading marketplace goes live, be sure to follow us on social media and stay tuned!