Blog Post

Goodbye to liquidity problems with security tokens

Miguel Caballero
Miguel Caballero
February 19, 2024
Securities Reental

I have been in the crypto market -full- since ICOs were born, so I have seen their rise, firecracker, decline and subsequent evolution. I have experienced not only the migration to STOs but also the experiments -failed for the majority- such as IEOs (Initial Exchange Offering), iAOS (Initial Airdrop Offering) or other variants.

Perhaps the element that best defines the evolution of a token issuance operation - obviously apart from tokenomics and the product/service to be tokenized - is the option of real liquidity for the token.

In this Cryptoblog post (January 2019) was talking about My experience trading a security token: very regrettable, mainly because there was no liquidity. The exchanges that were already licensed (and operational) for this purpose were minimal and did not have (nor do they have) market depth. This means that if you need to make your investment liquid, even though it's tokenized, it won't be easy for you. You'll have to find an accredited investor who wants to buy your token, “Wallapop style” but at a pro level.

However, something happened in 2020, and a phenomenon called DeFi has imploded on a global scale. We have passed in 4 months of being 4 geeks and to manage a few million dollars in TVL (Total Value Locked) to undoubtedly exceed 10b USD in September 2020;

Evolución del TVL en DeFi en los principales protocolos (fuente: defipulse.com)
Evolution of TVL in DeFi in the main protocols (source: defipulse.com)

DeFi protocols such as Uniswap (in all their versions, the most recent Sushiswap), Balancer or Kyber appear, capable of allowing the creation of Liquidity Pools for your own token.

In this way and since Reental we accompany each property with a pool of liquidity from the token itself, so that if you are a token holder and you want to sell your assets you can do so from the platform itself, without depending on third parties. Therefore, every time we close the sale of a property we will open its pool and the investor will never have problems making it liquid. Undoubtedly, a new range of investment options opens up for us in a very interesting market, where traditional restrictions disappear but we maintain (and strengthen, by reducing costs) the base of the business.

See you in the next post!

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