Digital Assets AG (DAAG) Launches Tokenized Stocks on the Solana Network

News / 25.06.2021

Switzerland’s Digital Assets AG (DAAG), a company focusing on tokenized financial resources, announced the first free-flowing security tokens on the network through FTX exchanges. The transfer included tokenized financial instruments like Facebook, Google, PayPal, and Tesla to the Solana network, where they will be available for trading immediately.

Shifting to Solana For Stock Token Trading

In April, in conjunction with DAAG, Binance became the first significant exchange to provide stock tokens. Binance launched its stock offering with Tesla but then added to its portfolio MicroStrategy, Microsoft and Apple. 

These stock tokens were limited to trading exclusively with Binance, and users can only open or close positions. The ability to withdraw or transfer cross-chain or to an outside party is therefore limited.

DAAG, however, has come up with free-floating tokenized stocks on Solana. Brandon Williams, DAAG Corporate Development Manager, has reported that more than 60 token stocks and collateral have been issued for almost $100 million.

Solana offers fewer fees for transactions and transacts at high speeds, allowing up to 50,000 transactions per second. In contrast, the average cost of a single transaction on its network is around $6, although Ethereum is a famous DeFi blockchain.

The free-floating tokenized stocks on Solana will make it possible to add tokenized stock trading to their platforms using centralized and decentralized exchanges.

So, DAAG’s new decentralized token will be able to be self-custodied so that FTX users can withdraw their tokenized stocks or deposit them into their digital wallet and trade them 24/7, he said.

Williams explained that DAAG integrates liquidity and capital from traditional banking with the crypto sector to improve all capital markets’ efficiency, transparency, and reliability.

Since DAAG has the capacity to employ standard financial goods in the DeFi area, it allows the crypto industry to produce new products that genuinely use the crypto and DeFi sector’s full potential.

Regulation Menace

However, one concern is that the tokenized stock is presently not allowed to be held in the United States, Iran, North Korea, and Syria for regulatory reasons. Still, no limits on access to the tokenized stock are applied in all other jurisdictions. 

DAAG’s tokenized stocks are valid for the European Economic Area (EEA). William confirmed this with a securities prospectus certified by the Financial Market Authority (FMA) of Liechtenstein.

As the digital assets sector is still in its infancy, an increased number of countries and institutions acknowledge that it is here to stay. As a result, they are giving digital assets a chance to evolve.

By a reduced reliance on financial intermediaries and at the same time getting rid of as much counterparty risk as possible, DAAG will promote efficient capital markets, William concluded.

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.