A new trading solution for security tokens has started with backing from Singapore Exchange (SGX), the country’s open stock exchange, and tech support from ethereum start-up ConsenSys.
The 1X platform has gone live Wednesday with their first listing of an ethereum token, available on the market with Singapore dollars. The token signifies concerning 7 percentage of the equities of a Singapore fund manager called Aggregate Asset Management (AAM).
AAM lifted about $4 million in fiat currency in the 6 weeks since May 4, 2019. Dealers in the round acquired the corresponding ethereum tokens to manage their ownership, which is now tradable on 1X.
The objective of 1X is to offer an IPO-like platform except for private firms to raise funds and to enhance liquidity in the primary capital market by means of a public blockchain to authenticate transactions.
“We take on a section of private companies – usually 10 to 30 percentage – and put that into a special purpose vehicle(SPV) … to back each token we mint for detailing and trading,” 1X’s CEO, Haiping Choo, informed CoinDesk, adding:
“The entire concept is to bring liquidity to otherwise traditionally illiquid assets. We have been commencing with private companies. Later on, we plan to apply a similar workflow to further illiquid assets like bonds or real estate, etc .”
Haiping Choo, 1X CEO, revealed that the exchange will originally get a part of private companies, usually between 10% and 30%, and store it into a special purpose vehicle to support every token minted for listing and trading.
“The entire concept is always to bring liquidity to otherwise traditionally illiquid assets,” Choo clearly stated to CoinDesk.
Choo asserted that 1X will initially focus on private companies, with strategies to expand on other illiquid assets just like bonds and real estate. He also asserted that as of now, ordinary/common stocks are being offered, however, it might be widened to other different varieties of shares, such as preferred shares and convertible bonds.
SGX will find itself as a strategic dealer with equity stakes and engagement in business operations. On the other hand, New York-based ConsenSys will help design a solution to enable 1X to issue modified ERC-20 tokens.
In the meantime, ConsenSys has also recently protected $10 million opportunity fund investment from South Korea’s largest telecom and third top conglomerate SK Group. The proceeds will be used to buy a wide range of businesses across the blockchain environment.