The global capital markets and blockchain infrastructure provider Ambisafe made some bold statements this month. The firm claims to be the first security token issuance platform to directly issue on-chain shares. While these statements may seem farfetched, a closer examination reveals that most issuance platforms actually only issue indirect fractional economic interests.
To put it bluntly, most STOs issue tokens which represent a percentage in a holding company, and not the actual firm. What most investors purchase is a percentage of ownership in a holding company which, in turn, is the actual owner of the company that the investor wanted to own shares in. In this way, many security tokens are not shares in a fund, but rather representations of shares.
Ambisafe Goes Direct
Ambisafe changed the game this month after becoming the first issuance platform to issue actual on-chain shares via the Ethereum blockchain. Now, whether or not Ambisafe is the first in the world to accomplish this task is up for debate, but they are one of only a handful of regulatory compliant platforms to use this strategy.
Ambisafe's first on-chain share issuance project involves the space exploration firm – SpaceX. Ambisafe intends to issue SpaceX shares utilizing an ERC-20 variation which incorporates securities regulations directly in its smart contract protocol.
The SpaceX token is called USPX and it gives investors the same rights as traditional securities. This includes voting and revenue sharing. As tokenized securities, these tokens can only transfer after all compliance requirements are met.
An Interesting Opportunity
The SpaceX concept is the brainchild of Elon Musk. This outspoken and inventive individual started SpaceX in 2002 as a private space exploration firm. To date, the company has seen amazing success. Currently, the firm has over a hundred contracted launches. Additionally, SpaceX now employs over six thousand highly trained staff members.
If the concept sounds exciting, it should. SpaceX already secured funding from some of the largest companies in the world. These include Google, Bank of America, Founder Fund, and DFJ, to name a few.
Ambisafe entered the market in 2015. Notably, the company is located in San Francisco. The firm's founders are Andrey Zamovskiy and Anton Tovstonozhenko. Today, the company focuses on Ethereum-based enterprise blockchain solutions. These products include a number of financial instruments including token issuance.
The Ambisafe project hasn't been without its share of speedbumps. An April 2019 article highlighted how the crypto bear market affected the firm in major ways. The company had to shrink its workforce from 125 employees, down to just 50. Speaking on the decision, Ambisafe CEO Zamovskiy explained that the firm hired to quickly during the 2017 crypto craze. Consequently, the cutbacks became necessary given the current crypto climate.
Pioneers in Space and Finance
Ambisafe appears to be the perfect fit for SpaceX as the firm continues to expand its technical capabilities ahead of the competition. As a leader in innovation, it’s not surprising to see these firms pioneer the financial markets as well. It will be interesting to watch these companies expand over the coming months as both platforms are unique in their own rights.