Stokens – BitShares Cryptocurrency Exchange Security Tokens Blockchain?
Stokens are security tokens designed to work as an SEC-compliant way of buying and selling tokens on the blockchain. Read our review to learn more.
What Are Stokens?
Stokens are smart contract-backed, blockchain-based tokens that represent securities. The platform was developed as a legal way to buy and sell securities using tokens on the blockchain.
The Chinese government recently cracked down on ICOs and cryptocurrency exchanges. The SEC has signaled its intentions to do the same in the future. The SEC could consider ICOs and token sales to be the sales of unregulated, unregistered securities. When that time comes, we’ll need a platform like Stokens.
Stokens defines itself as “any form of digitized or tokenized security.” It’s a security token – or a stoken.
Benefits of Stokens
Stokens are smart contract-based tokens on the blockchain. Some of the specific benefits of Stokens include:
- Trading capacity of over 100,000 transactions per second
- Trading fees averaging “fractions of pennies”, according to the official website
- Fiat withdrawals with a flat fee of 3%
- No middleman, no clearing house, and no waiting
How Do Stokens Work?
Stokens are bought and sold on BitShares, a decentralized exchange. Stokens use the BitShares blockchain. That blockchain technology, in the words of Stokens.com, “allows Stokens to become the Angel List of Cryptocurrencies, having unrivaled investment granularity and liquidity for all parties.”
Overall, Stokens want to bring venture capital into the 21st century. Digital assets and ICOs already began to bring venture capital into the 21st century, but they still need to be regulated and registered. That’s where the developers of Stokens see an opportunity.
Regulation and registration aren’t just government conspiracies to control the world of digital assets. They’re designed to protect investors and reduce scams. We’ve seen hundreds of scams emerge in the bitcoin community over the past year – from pyramid schemes to low-quality ICOs with no MVP. Registration and regulation would help crackdown on this behavior – although it would come at the cost of extra red tape, which some see as a beginning of the end for digital asset exchanges.
Regardless of how you feel on the issue, Stokens plans to offer crucial benefits and features to investors.
Stokens offer all of the following features:
The Stokens platform will have a “world-class vetting” procedure for companies and investors, “combined with our tireless worldwide regulation compliance”. The end result is that investors and companies are protected to the greatest possible extent.
Free and rapid exchange of Stokens on the blockchain allows liquidity “never before seen in venture capital”. This is in stark contrast to conditions like a 10 year lock-in period, which is what we see with the old model.
Whether you’re investing in one company or 100, you can build a portfolio of global startups to diversify your portfolio. Decentralized Stokens exchanges will allow for increased granularity.
The Stokens website describes how “in the old model, companies are treated like cattle.” With Stokens, however, large companies no longer decide who gets funding and who does not. Stokens promises to treat every company fairly. Once a company has been vetted, it’s up to investors to decide if they receive funding. This will reduce the ability for large corporations to dominate the venture capital funding space.
Capitalization tables aren’t held hostage in a lawyer’s office or an accountant’s file cabinet, which means investors and companies can audit each other in minutes on the blockchain. Audit stakeholders and company financials to verify a company’s information on an immutable, secure blockchain.
Overall, Stokens sees itself as the future of investing. Stokens, Inc. claims that, “in the same way that email replaced the fax, Stokens will replace the venture capitalist.”
Stokens, Inc. was founded by John Gotts. In a letter posted on Stokens.com, Gotts writes how he realized the potential of smart contracts in 2014 as a way to trade equity. He also realized that these digital assets – whether they were called tokens or coins – would have to legally be considered securities.
Over the next 2.5 years, Gotts learned laws pertaining to brokers and dealers. He learned how to operate a website like Angel.co. In May 2017, Gotts called the top law firm in the space, the same law firm that represented Mastercoin and Bancor ICOs.
Gotts teamed up with the law firm to create a unique concept. Here’s how he explains his idea in a nutshell:
“If you can do something with paper documents, lawyers, notaries and banks then you can legally add efficiencies with smart contracts on the blockchain, eliminating paper documents, lawyers, notaries and banks, saving both time and money.”
Stokens are the end result of that work.
The Tokens and eXchange Self-Regulating Body (TXSRB)
Stokens, Inc. has created the Tokens and eXchange Self-Regulating Body (TXSRB), made up of member coins and exchanges.
This organization is a self-regulating body that will play a crucial role in the Stokens ecosystem. It will work as a self-regulating body similar to the Securities and Exchange Commission. The reason for the creation of this organization is so avoid the real SEC stepping in to regulate cryptocurrencies.
A self-regulating body (SRB) is a non-governmental organization with the power to create and enforce industry regulations and standards, with the main goal being to protect investors.
The goal of the TXSRB will be to educate investors and owners of altcoins on proper business practices expected from all members. The organization aims to create and make available information regarding fraud or other bad behavior within the industry.
Basically, the TXSRB will function in a similar way to self-regulating organizations around the world today, including the Financial Industry Regulatory Authority (FINRA), which governs from within while avoiding ties to any one country’s governance. It’s becoming a crucial part of the global financial system. Stokens seeks to have the TXSRB become a similar organization.
Stokens are regulated securities tokens built on the blockchain using smart contracts. They provide a way for accredited investors to interact with regulated companies through a digital ecosystem. The goal of Stokens, Inc. is to create a platform in anticipation of upcoming SEC regulations. The cryptocurrency industry has enormous potential – but it’s a bit of a mess in terms of regulation. Stokens, Inc. wants to solve that problem.
It’s an ambitious project, but it could change the future of ICOs. You can learn more about the platform today at Stokens.com.