EMURGO: Cardano Founder to Help Devise World’s First Security Token Blockchain As Basis For World’s Capital Markets

Cardano ADA founder Charles Hoskinson has been announced as co-architect of the world’s first security token blockchain which will be used as the “underlying infrastructure for the world’s capital markets.” [1] It will be designed to be regulation compliant and as a brand new blockchain foundational layer to bring together equity market stakeholders in an efficient and secure manner.

A security token is a real world asset/security (equities, real estate, intellectual property, etc.) that is represented as a token on a blockchain enjoying the advantages of more efficient capital fund-raising, asset division & increased liquidity, security, and scalability, ultimately marrying the traditional ecosystem of capital markets with the new, modern blockchain ecosystem.

Over the past year and a half, overall total market capitalization of digital assets hovered between $100 billion to $200 billion. [2] The entire market capitalization of the world’s equity/stock markets stands at nearly $70 trillion, which means the current cryptocurrency market (approx. $230 billion as of writing) only accounts for a few tenths (0.33%) of a percent of the world’s equity markets. [3] Thus, there is a huge and untapped potential for growth especially as just the total world’s physical supply of money (coins, notes, checking, savings) alone is $36.8 trillion. [4]

“The market for security tokens is going to absolutely generational and a tremendous leap forward for the overall blockchain industry and the world’s capital markets. We currently have a $230 million market capitalization for mostly utility tokens built off of retail investors. Once smaller players phase out and larger protocols such as Cardano take the front scene, we are going to see trillions of dollars flow into the ecosystem via security tokens and regulated institutions,” said EMURGO CIO Manmeet Singh.

The overall blockchain industry still in its early, nascent stage in terms of technical development with growing mainstream recognition. Healthy competition is helping the maturation of this ecosystem as stronger projects that deliver real world utility will ultimately carve out a product market fit. This competition will benefit consumers and end users as projects are incentivized to deliver the best product possible with high assurance built in.

“In the end, the blockchain industry has to deliver real world use cases with more efficient onramps that advance upon existing verticals to incentivize mainstream adoption. This will be the base catalyst to spur the expansion of the cryptocurrency market capitalization to trillions of dollars. To that effect, Cardano is tackling the current issues of blockchain scalability, sustainability, and interoperability head-on & utilizing high assurance code used at the highest levels of engineering and formal methods to deliver a strong foundational base for data-intensive real-world applications to be built on top of Cardano,” said EMURGO CIO Manmeet Singh.

:arrow_right: :arrow_right: Continue reading on EMURGO’s blog

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I understand the EMURGO and or IOHK aspect of these development plans. I am NEVER comfortable as i see projects become something and part company with the primary project. How will Cardan (ada specifically) benefit? Unlike a few others I didn’t make a financial investment in dreams of changing the world. I made a financial investment to see ADA gain value. Most of the time when I speak of Cardano I’m actually speaking of how ADA will be affected. I’m beginning to believe the blockchain is the investment and the toke will be nothing but a functional part of the system.

Anyone else seeing this potential?

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How does it help Cardano specifically >>> ADA? Will Cardano even be part of the system other than being just another blockchain as a side chain to the new Security Token Blockchain??

Why is it that the Cardano (ADA) blockchain is not being discussed or considered by clients who speak with Hoskinson about all these different use models? It seems each time I listen to Sir Charles he is talking about IOHK and a different project. It leaves me very unsettled.

Somebody help this old man out. I’d appreciate some help understanding.

I have asked CH about Apollo blockchain and token, a very stiff competitor in Africa. It’s being talked about as the standard for all the African Nations.

Common community, give us a little help here.

I would say that there is and will be a lot going on in the financial world as we transition to a tokenized digital decentralized global economy. This is going to occur as a series of baby steps in some cases. There are still a ton of regulatory hurdels to overcome. In this world blockchains focused specifically on ICOs make a lot of sense. This is a great opportunity for Charles to get first-hand experience in dealing with these issues in the developed economies of the west to inform future implementation in a decentralized public ledger (Cardano) when the time is right. I would also say that I’m sure he would advise that there is some interoperability between different blockchains. Remember the old saying pigs get fat hogs get slaughtered.

I appreciate the comments as reply’s and I’m sure these thoughts would be comforting to some. At my time in life and I do have some significant professional business experience the things I see at this stage trouble me. Too much focus on other projects. One man one mind 24 hours in a day. There is only so much one can effectively do. I do not begrudge Charles his chance to make a killing in his own personal business life. I just don’t want to become the sacrifice as other interests become more consuming of his energy and abilities as time become’s diluted with too many interests. Charles has observed it may already be too late to be of significant difference in the blockchain community as so many block chains are already servicing so many opportunities. The big boys are announcing their own projects and so the world turns and opportunity fades with profit potential. I cannot see what Charles seems to see. But them he’s not caring about making profit. He’s got a dozen other projects in various stages. making money from one is of little importance to him.Maybe i’ll just wait till it hits .10 again and sell to buy BTC… He seems more positive about ETclassic than ADA. Again just another observation. Everybody be well and lets all keep our fingers crossed and hope for the best.

Your argument assumes that Charles’ primary motivation from involvement in one or all of these projects is making money. After watching probably 50+ hours of interviews and AMAs I don’t believe that making money is his primary motivation at this point. He has made millions already. He is interested in changing the world and Cardano is the primary vector of that desire.

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As I understand this project it will run as a sidechain or some sort of that on top of the Cardano blockchain.

https://emurgo.io/en/blog/cardano-first-security-token-blockchain-capital-markets/newsletter
("Cardano is set to become the protocol of choice for Y2X and its portfolio firms, especially in the field of regulated STOs, therefore providing an increased value add to ADA holders. " )

So the Cardano blockchain will i.m.o be used to settle/store the transactions in this sidechain thus they will need some ADA to power these transactions. I also imagine that it would be possible for stake pools to run this sidechain which won´t be for free of course. If this “big money” coming in needs to aquire ADA the value will rise. Also value will rise because ADA will have one more usecase even if this sidechain uses other tokens.

And even if this project would be completely separate from the Cardano blockchain and is built upon Atala or something, in the future these two systems will be i.m.o very easily compatible thus some fancy dapps running on top of cardano could use the tokens on this other blockchain for example a lottery with prices being security tokens (propably not usefull, but the imagination is the limit). Thus also providing value to ADA because the more transactions happen on Cardano the higher the demand for ADA --> price rise

I welcome any comments, critiques…just my honest opinion here I don´t suggest it will happen like that, just my best guess

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@Yeshuaschildren
Of course you are right about the limits one single person can do with his time effectively, but I am sure Charles knows that as well and he has a great team which he delegates these projects to. He also knows which projects have priority and adjusts the resources accordingly.

If you want a “safe” investment buy bonds or whatever as crypto is in its infancy and a lot will change in the future, but i.m.o Cardano has a good, solid vision for the future and the tools to make it possible in a way that it will still be here in 5 years. No one will care if Shelley was 1 year late because the quality of the technology will speak for itself and quality is more important in the long run than just publishing something and then providing bugfixes every quarter (in a decentralized system this proves to be very difficult)

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Actually I have watched as many if not more since I review them to locate info. Bad memory. LOL. I make not negative comments about or against Charles at all. I make observations. I’m actually rather detached from this investment for my Grandchildren. I have little emotions tied to it at all. Relative to charles and his activities, I hope he is making money and lots of it. He didn’t get his education to make us financially secure. He was going to be a doctor. That says something very special about his personality. (In my view)

I begrudge no man his goals and or objectives and wish only the very best.

My greatest concern is that i have made another bad decision with regard to a crypto. I was a very happy buyer of XLM until Jed McCaleb announced and stated two times in a public meetings that is videotaped “XLM is not and investment”. I didn’t realize Charles shared the same global humanitarian view as XLM s founder. both want to change the world and profits be damned. Let me make another point about something Charles has commented about. Charles said (this was several months back) there were a number of his own people who are concerned about the price of Cardano ADA.

Did you notice by chance the Florida shindig had almost nothing said about ADA, but ATALA was spotlighted? Did you notice the frustration expressed by the moderator who made efforts to stop questions about ADA and price appreciation? Who holds those tokens and who are the node operators? Will there be staking? Why is it in virtually every new business opportunity circumstance people want something of their own and do not wish to use ADA. If I’m missing something please do me a very big favor and explain it. Tell me what I’m missing. TO BE CLEAR >>> STAKING IS PROBABLY THE KEY TO ADA PROFITABILITY FOR US. IF the price does climb I’m happy. I will feel better for my grand-kids. Much much better. I continue to buy. I’ll be buying more Friday, and two weeks from then I’ll buy even more. I’ll continue accumulating till it stabilizes at or above $1.00. I just transfer it to the grand-kids cold wallets. Eventually i’ll stake for them so their positions continue to grow and they are at an age to assume control. That ranges from 2 years to 8 years. That is why I’m disconnected from these purchases. XLM was a disaster. The XLM crypto is used globally. Yet it’s price is stuck at 9.5 to 12.9 cents. It’s going no where and it does not offer staking returns as payment for participating in payment processing.

It’s important people realize, token’s with no apparent value have no value and are simply used as a utility token. XLM Lumens are today only functionig as fee’s at a rate of .000001 per transaction or bundle of transactions. While designed as a currency they are only used as a utility token. Cardano is even at this point far more valuable than XLM based on the FACT they are being used in retail purchases. If this grows the sky IS the limit.

I struggle with the slow adoption. Don’t confuse that with finalizing the functions of ADA. I’m an aerospace engineer. In my world i would have used Cardano as a modeling platform to build the first functioning model, (First Article) Learn from the mistakes and then build ATALA. OR some other better more refined 3rd tier blockchain. I would have incorporated all the features of ADA into and along with ATALA s features. ATALA probably has far fewer tokens available to be released. Anyone know? I would have also made darn sure me and the hard working team would have had some greater benefit for their hard work and labor. I learned long ago, one does not bring in their own competition. There is enough without helping water down your own opportunity. So, does ADA compete with ATALA? Or not?

For the record, I would encourage Charles take on as many projects as he has time to take on and the ability to manage. I wish him the very very best as well as all of us who hope to benefit from HIS WORK. I just ask questions and wonder as I pear through the process with the lens of my life experience. Eventually all will do well enough I suspect. Certainly well enough for Charles to be comfortable.

Wish you all the very best.

Some will care. You can read it in every AMA comment feed’s. I’m a long term buyer. I ask questions and pose points to chum for comments. Many herein are far more learned in this area then I will ever care to be at this point. I keep learning from constructive comments and appreciate them greatly. I was an equities trader for 40+ years. If I believed bonds and stocks were good investment’s I’d be busy there. Crypto is still a very immature market. Now I’m just lazy. I don’t trade and only buy for my grand-kids. I’m a relatively small buyer. I’d bet most folks who read this surpass the total of all my purchases in their own accounts.

Appreciate your comment.

Thanks for the elaboration.

Here are my opinions:

I believe Charles and the entire IOHK team (as well as Emurgo and the foundation) are properly incentivized to increase the value of the Ada token. This is by virtue of the fact that they hold so many coins. As Charles pointed out IOHK looses money every day that staking is not live. With that said he has the capital (through early Bitcoin investment) to be in the fortunate financial position to be able to take the time to make development decisions that maximize long term utility and value over short term but unsustainable price action. These decisions also align with his personal philosophy so it is a win win.

Regarding Atala it is a different category of blockchain product. Atala is a private enterprise blockchain solution, Cardano is a decentralized public blockchain solution. They are for different customers and purposes. The benefit of Atala for Cardano is that Atala captures clients that would not consider using Cardano (or any other public blockchain) and gets them into the IOHK ecosystem. I’m sure there will be interoperability between Atala and Cardano so that Atala users can interface with Cardano when the benefits of a public system are required.

I found this article on public vs private blockchains. I have not read it through entirely but it addresses some of the issues of Atala vs Cardano and the different customers they serve.

Awesome reply and very much appreciated. Thank you Fred.

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Read the entire article. You should take a longer look. Looks like ETH is jumping ahead in the game with IBM fabric. It will be a meaningful challenge to our hopes for ADA. I am not one who gets excited about the blockchain and it’s capability. I only bought ADA for a profit opportunity for my grandchildren. I’m not so sure Cardano will be done in time to be a real competitor as so many companies that need blockchain have and are making major contract commitments while we ((talk)) about gamer’s MOU’s (not contracts, definite maybe’s) and the ((potential and possibilities)) of STO’s.

I’ll use Charles appropriate example. VHS captured the market before Beta Max was fully ready and competitive. Beta Max was and is the superior product. They loved building it so much they couldn’t let go. It just wasn’t perfect enough and as a result it never gained enough acceptability. Where is it today. The Cardano story is much like VHS and Beta Max. Too much like it. That is my concern.

I’m too old to ignore the real possibilities but I’m also aware my lack of knowledge of this industry does cause me a great deal of concern and discomfort. There are some things that do not change. I noticed the guys at EMURGO are starting to say “they hope” Shelly with be fully implemented by years end. Each time Cardano developers hedged and started shifting to a definite maybe, it becomes the marker for a delay. AND every day the relatively small numbers of good opportunities gets smaller. Business’s will not wait. In 10 different African nations they are embracing a Crypto standard called Apollo. Tick tock.

Yes the clock does not stop. This technology is still in it’s infancy however. Lots of use cases by lots of people all over the world. Exciting times!

Time will tell. Eyes crossed. ;<))

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