The AirSwap team posted the latest updates to YouTube, discussing stablecoins, Security Tokens, tokenized real estate and decentralized trading with partners QCP Capital, Securitize and Propellr.
More than a year has passed since the launch of AirSwap Token Launch, and many important events have been marked since then: the launch of Token Trader, Token Marketplace and an affiliate network. Most recently, the team introduced Conversational OTC Trading and AirSwap Spaces.
AirSwap’s Rob “Crypto Bobby” Paone hosted a quarterly #AirSwapNext event on his YouTube channel this week inviting community members to check on the status of AirSwap.
Rob and his guests touched upon a number of topics, including the rise of stablecoins, digital securities, and the role of Fluidity in Manhattan’s first tokenization of real estate worth $ 30 million. The intersection of these three technologies – stable currency, digital securities, and tokenization – has incredible potential.
OTC Marketplaces on AirSwap
#AirSwapNext was opened by Maxim Bukay, AirSwap Analyst, and Darius Sith, CIO at QCP Capital in Singapore. QCP is the first OTC marketplace with its own space on AirSwap. Maxim and Darius discussed the prevalence of OTC trading in the crypto space and the rise of stablecoins.
According to Darius, “80 to 90 percent of cryptocurrency liquidity is in the OTC market, not on exchanges.”… OTC transactions are attractive because they allow for more efficient counterparties identification and smooth negotiation and settlement. Rather than going to multiple exchanges and paying a commission, OTC traders take advantage of wider networks and economies of scale.
According to Maxim, who previously worked as a currency trader at BNP Paribas, OTC counters are essential to ensure liquidity in the market.
If you look at the cryptocurrency market right now, it is very fragmented. If you want to move $ 50 million bitcoin, you will probably have to move to 10-20 exchanges to get the best price. The OTC department has the proper infrastructure to be able to connect you and provide you with the best price for each of your orders.
Decentralized exchanges are especially attractive to trading desks as they offer greater security, control, and access to the global marketplace.
Due to its location in Asia, QCP is adapted to the impact of capital controls in the region (government policies restricting money flows that move to and from a country) on the cryptocurrency market.
According to Darius, capital controls create inefficient monetary mobility, “cryptocurrency plays a huge role in overcoming this inefficiency.”
Restrictive capital controls appear to have led to the popularity in the region of stablecoins, digital assets backed by fiat currencies. Darius noted that stablecoin Tether (USDT) currently accounts for almost 70% of QCP’s trading volume, adding that “The volume of USDT that travels through China, Hong Kong and the rest of Southeast Asia is enormous. This is the crypto layer that is emerging in the traditional economy and this is something that cannot be ignored. “
Security Tokens and secondary trading
Another topic that is widely discussed today in the crypto space is the role of a security token or digital security. To provide context on the impact of digital securities, Rob welcomed AirSwap’s in-house lawyer Hurram Dar and Jorge Serna, VP of Products for Securitize, a compliance platform for digitalizing securities on the blockchain.
Securitize is a white label platform that provides all lifecycle support for asset securitization compliance – from supporting issuers in raising money to carrying out all investor due diligence, including KYC / AML compliance – using Ethereum as the basis for its technology.
Thus, compliance checking is based on smart contracts and is programmable. “The digital securities model is not devoid of trust,” explains Jorge, “it requires trust in the issuer.”… After Securitize verifies the parties through its protocol, it adds them to the whitelist that it shares with Ethereum.
AirSwap recently completed a trial of the first peer-to-peer security token transfer on a public blockchain with Securitize DS protocol.
“Many people expected security tokens to be similar to cryptocurrency, but they are very different,” Hurram said.
While cryptocurrencies exist exclusively in the digital world, security tokens reflect ownership of a real asset using blockchain technology (and it may not be a physical asset; it could be, for example, cash flow or equity).
Thus, there are different compliance requirements for digital securities. “Basically, digital securities are just securities,” Hurram said, adding that most of the digital securities he saw were Reg D private placements.
Thus, while there is a concept of increasing the liquidity of digital securities, “these are not securities that will be traded very often, and they are unlikely to be traded on exchanges or in order books. They will be sold freely or on a peer-to-peer network. ”
In a recent article, Khurram explained how digital bulletin boards are a practical way to trade digital securities:
While some aspects of securities transactions cannot be automated, such as investor due diligence and eligibility checks, token contracts and whitelisting can programmatically impose restrictions and are easier to verify with compliance protocols such as the Securitize DS protocol and the R standard. -Token from Harbor. With our latest Spaces product, projects and platforms can create their own space on AirSwap, setting their own connectivity requirements and trading parameters. The combination of these tools allows the issuer, for example, to create a digital bulletin board for their digital securities, where parties can post tokens and use the exchange protocol, all in a walled garden environment.
Jorge predicts that the rise of digital securities will catalyze an even “bigger revolution than the first crypto wave.”
Real estate tokenization
Following this discussion, Rob brought in Fluidity co-founder Michael Oved and Todd Lippiatt, CEO of Propellr, to discuss the exciting uses of tokenization.
Last month (October 2020) Fluidity and Propellr, an end-to-end digital placement company, announced a $ 30 million real estate token in Manhattan.
Forbes reported that the high-end condominium, located on East 13th Street in the East Village, is the first major asset in Manhattan to be tokenized on Ethereum.
As with the introduction of any new technology, there are a number of misconceptions about tokenization that Oved and Todd brought up in their conversation with Rob.
Traditional investors often mistakenly believe that tokenization means turning everything into cryptocurrency. Investors have the option to purchase traditional or digital securities.
“Everyone has read the tabloid versions of the worst-case scenarios for the cryptocurrency market,” Todd said. “I can tell them, ‘With Security Tokens, this doesn’t exist.” … Even if your wallet is compromised, we can control it to some extent as we comply with regulatory requirements. We view the function of tokens as purely additive without any real drawbacks. “
Oved and Todd recently published The Two Token Waterfall whitepaper on a groundbreaking capital structure that applied blockchain technology to a real estate transaction.
Fluidity and Propellr’s Two Token Waterfall framework introduces debt and equity classes and is designed to increase transparency, reduce transaction costs, and provide increased liquidity and secondary trading opportunities. In short, the Two Token Waterfall structure solves the liquidity paradox in private securities.
AirSwap’s Maggie Hsu uncovered this innovative capital stack on her blog, highlighting the significant opportunities for retail investors.
What plans does AirSwap have
The live broadcast ended with a message from AirSwap co-founder Don Mosites, who is leading product development.
Don took viewers on a tour of the AirSwap spaces, explaining how groups of traders create their own “space” on AirSwap, which allows approved parties to effectively monitor, communicate and execute decentralized transactions.
The intuitive user interface includes a whiteboard from AirSwap Indexer and “threads” for users to receive messages and updates. Users can become “verified” by completing the KYC / AML verification process with AirSwap partner AxiomLevel.
Don shared that “efforts are now being made to streamline the trading workflow to the tables,” such as QCP via Spaces.
Unlike other services like Changelly and ShapeShift, AirSwap does not execute transactions and does not require any fees.
Don also talked about the concept of “liquidity cascade” and how “table participation in such a network allows you to make the trades you want to take.”
Stepping back, Don thought about the merging of new technologies that were discussed in our #AirSwapNext updates.
“Given that decentralized trading can rely on this worldwide blockchain provided by Ethereum,” Don concluded, “we think the combination of tokenized securities, stable currencies and decentralized trading is becoming very relevant.”
About AirSwap project
AirSwap allows peer-to-peer trading on the Ethereum blockchain. Based on a decentralized protocol, traders can add or remove liquidity with a suite of reliable products that are easy to use and free.
The mission of the project is to provide the world with the opportunity to freely trade assets.