Smart Security represents a financial instrument with rights to an underlying asset, equity, cash flow or profit. Unlike traditional securities, Smart Securities take advantage of automation, decentralization, liquidity and transparency offered by the distributed ledger.
Type of Smart Securities
Tokenized VC fund - claim to a share of a fund. Each token is a unit that represents a fixed amount of investor rights. Tokens are tradable, and liquid.
Share-like tokens - features such as ownership in an entity, voting rights, dividends, profit shares, or some interest in the success of a future entity. A subset of these are 'Revenue-Share' tokens.
Asset-bakced tokens - constitute an economic right to a real-world asset, such as art, real estate, power plants, etc.
Crypto-bonds - debt tokens, can act as bonds, constituting a fixed claim on future streams of income.
Benefits
Liquidity - 24/7 global trading market
Transparency - global pool of capital (as long as it's compliant) increases investment and reduces price arbitrage
Fair Pricing - efficient trading creates less opportunities for arbitrage and spread taken by banks
Lower Fees - smart contracts decrease fees paid to middlemen such as bankers, lawyers, accountants, etc.
Faster deal execution & settlement - automated issuance and trade settlement on secondary markets
Democratization of investment - global pool of capital
Decentralization - removing concentration of power from banks and credit rating agencies
