Tokens as shares?
How digital tokens can represent real actual shares
Welcome to tokenized shares
Introducing tokenized shares or security tokens
A tokenized company share is the digital representation of the underlying physical share of a company in the form of a cryptographic token. Upon qualifying a token as a security, specific laws apply. A security token needs to be negotiable. Though tokens do not directly represent company shares, they possess the same characteristics such as the right to receive dividends (a part of the company’s profit) and voting power (regarding the company’s decisions).
Transfer of shares always require a notarial deed, right?
Shares in a company that is not listed on a regulated market such as a stock exchange, can only be transferred via a notarial deed. This would take about 30 days costing approximately 1000 Euro on notary and lawyer fees upon every transfer. Not only is this slow and expensive, but it also excludes small and medium-sized enterprises, start-ups, and scale-ups from this method of financing growth as registering on a traditional stock exchange comes at a great cost.
Liqwith has solved this issue as it is our ambition to facilitate a better capital market by digitalizing assets for the mass consumer market.
Security tokens can be transferred freely peer-to-peer between white-listed participants without a notarial deed. This provides for fast, efficient, and cost-effective transactions. Also, it enables the participation of many more shareholders that each invest smaller amounts. This in turn creates opportunities that would otherwise have not been possible.
Our STO solution for digital company sharesAs shares cannot be transferred like tokens on a blockchain, we have designed so-called depositary receipts or share certificates that are created by a trust office foundation. These share certifications are governed by the public Blockchain (ethereum) which makes it secure and transparent. A company issues all or a part of its shares to this trust office foundation (STAK), which then becomes a shareholder. In turn, the STAK issues depositary receipts for the shares it holds. These receipts hold all rights related to the company shares, such as dividend and voting rights, just the same. Plus, once tokenized, the time to complete a transaction will be less than 3 minutes and will cost less than 50 cents.
Is an STO the way forward for your organization?
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