Learn the basics

The security tokens value chain

Mar 11, 2021

A security token is the digital and unforgeable representation of a financial asset. As long as the asset is represented on a blockchain, it will remain unforgeable despite being in the digital environment. That is why you can use that representation to trade with it.

To support the commercial function of security tokens, different services are emerging that together make up the value chain of security tokens.

Issuance and Tokenization Platforms

The issuance of security tokens consists of generating new financial rights in the digital environment. It can be said that a company in a financing round "issues" new rights in favor of its investors. If we register those new rights on a blockchain, we say that we are issuing security tokens. If, on the other hand, we register an existing financial asset on a blockchain, we say that we are tokenizing an asset.

The distinction between issuance of security tokens and tokenization of assets is important, since in the eyes of the law they are very different activities.

Some of the best known providers are Tokeny SolutionsBlack MantaSecuritize or Polymath.

Markets

The biggest advantage of bringing assets to the digital world is that it infuses liquidity into assets that previously did not have it. Two people in different parts of the globe will be able to exchange assets (or anything else) with each other much faster in the digital environment than in any other way. However, it is necessary to create meeting points between buyers and sellers. They are the marketplaces and exchanges.

Some of the best known marketplaces are tZEROOpenFinanceSharesPost or Archax.

Wallets and custodians

The so-called cryptocurrency wallets are, in reality, interfaces that allow interaction with information registered on a blockchain. Although these services do their best to prevent theft and hacking, companies tend to entrust the security of digital assets to companies dedicated to safely guarding crypto assets, called crypto custodians.

Some of the best known wallets are TrustWalletCoinomi o Bitpay. Among the custodians, BitGoCoinbase Custody and Anchorage stand out.

Infrastructure Platforms

These are those companies that offer services in different areas of the tokenization field. This is the case of Token City, which offers comprehensive services for the management and tokenization of digital assets, issuance of security tokens, marketplace and white-label marketplace. As an infrastructure platform, Token City encompasses almost the entire value chain in the tokenized financial assets sector, with the exception of custody.

Other infrastructure platforms are the American Harbor, recently acquired by the custodian BitGo, or the Singaporean Istox.

Distribution companies

These are companies dedicated to publicizing opportunities in the security token markets. Some examples are the security token aggregators Security Token Market or STOAnalytics.

Together, all these companies are dedicated to the modernization of private financial assets. They are the spearhead of a new technological wave to provide liquidity to financial assets that until now did not have it.

Entra en la nueva economía tokenizada

Enter the new tokenized economy

Token City is the ultimate bridge to the tokenized economy (tEconomy), in which tokenized companies (tEnterprises) create their cryptoasset markets (tMarkets), open to global investors (tCitizens).

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