tZERO security token price surge continues
The native token for the leading security token exchange platform builder, tZERO, has risen significantly in the last quarter and continues its rise during August. The technology provider has been active in building new platforms and signing partnerships.
tZERO is a technology firm that builds and commercializes blockchain-based platforms that offer solutions for trading digital securities and digital assets. The whitepaper for the project, written in January, outlines the aim to develop a “scalable and stable securities token trading platform that, when operational, will be fully compliant with applicable legal and regulatory requirements.” The project is designed to be at the “forefront of the effort to bring greater efficiency and transparency to capital markets through the integration of blockchain technology.”
Digital securities, or security tokens, are traditional securities that are underpinned by blockchain technology. Digital securities can represent a holder’s ownership stake in tangible assets, such as real estate, or may represent shares of an operating company. Digital securities also allow investors to view ownership structure on a verifiable blockchain network and are designed to providing increased transparency.
The tZERO platform operates with a native security token called TZROP. This token is an ERC-20 compliant token that has been offered as a security to qualified investors in accordance with US and international laws. The token pays 10% of the adjusted gross revenue to token holders on a quarterly basis, subject to board approval, and the conditions outlined in the offering memorandum.
Between December 2017 and August 2018, tZERO raised an initial US$134m in funding. This remains the largest security token sale in the world to date. The token was sold in tranches where each token was between US$5 and US$10. The issuance was done via a Simple Agreement for Future Tokens (SAFT) agreement. The tokens have since become available for trading on the native tZERO exchange, accessible via tzero.com
Like many ICO projects, the STO was well received at the time but suffered during the prolonged industry-wide bear market from 2018 to 2020.
The price-performance of TZROP since issuance. Source: https://www.tzero.com/asset/TZROP
The value of the token followed the trend of the entire crypto asset class, dropping to a low of around US$1 for over a year.
tZERO token price surge
In the last couple of months, with progress updates and launches delivering milestones outlined in the original whitepaper, the token has risen in value and is now trading at US$7.94, as of the close of trading on 14th August. The trading volume profile of the past 7 days has also observed a sharp increase.
The price-performance of TZROP last 3 months. Source: https://www.tzero.com/asset/TZROP
A core product of tZERO is its alternative trading software (ATS) the tZERO ATS, a broker-dealer registered with the SEC, and a member of FINRA and SIPC. It is a system that facilitates the trading of security tokens and US equities alike. Digital securities that trade on tZERO ATS are conventional uncertificated securities. Ownership of such securities is reflected in the traditional books and records of regulated market participants.
It was announced that the tZERO ATS recorded its strongest month ever in May 2020, transacting over 423,000 digital securities, which is a 400% increase compared to May 2019.
In 2015 the tZERO Group acquired Wall street brokerage firm SpeedRoute, a company that connects broker-dealers with liquidity alongside “dark pools.” Dark pools are private exchanges for trading securities that are not accessible by the investing public.
SpeedRoute recently recorded its strongest trading month in its history. It was reported that the total monthly trading volume for March 2020 was nearly three times that of March 2019, and this resulted in a 218% increase in revenues when compared to the prior period. Despite this significant increase in volume, SpeedRoute’s system had 100% system uptime.
tZERO CEO Saum Noursalehi stated following the announcement, “SpeedRoute handled trading billions of shares in March, significantly exceeding every volume target to date. The company’s impressive performance showcases the scalability of its technology, which is also leveraged by the tZERO ATS for the trading of digital securities.”
In February 2019, tZERO announced that it had entered a partnership with the Dinosaur Financial Group, a New York-based institutional brokerage firm. Dinosaur is now the broker-dealer that provides brokerage accounts for investors seeking to trade tZERO’s digital security tokens.
Dinosaur Managing Director of Equity Trading Elliot Grossman commented on the deal stating. "Becoming the provider of brokerage accounts for tZERO security token holders is a significant milestone for Dinosaur. Blockchain is changing how securities are traded and settled, and I am particularly proud that Dinosaur has joined with tZERO, tZERO’s broker-dealer subsidiary, PRO Securities (and the PRO ATS), PRO’s other partners and Electronic Transaction Clearing to pioneer disruptive changes for issuance, trading, and settlement in the capital markets."
In July, the group announced that it had entered a partnership with Aspen Digital Inc. to enable its digital security, ASPEN, to trade on the tZERO ATS. The ASPEN shares will represent US$18 million of indirect ownership in the St. Regis Aspen Resort, a five-star, 179-room luxury hotel located in Aspen, Colorado.
Aspen Digital, Inc is managed by a subsidiary of New York-based real estate asset management and advisory firm Elevated Returns. The Aspen digital security will be the first digital security within Elevated Returns’ portfolio and the group has said it intends to tokenize roughly $1 billion of real estate projects in the future.
In a statement made on July, 30th tZERO CEO Saum Noursalehi announced that the company had "significantly reduced" its cash burn rate by 45% year on year. He explained that savings came from cutting legal costs and staff; the remaining senior staff also took salary cuts in return for company equity.
With core business acquisitions, technology building, and key partnerships now setup, tZero’s appears to be hitting an inflection point with Noursalehi explaining that the bulk of the development phase is complete and regulatory approvals are soon to be behind the company. Noursalehi states that the team can now focus on commercializing the business.
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