As we enter the new year, it's time to look at the digital securities that were the top movers and losers of 2022. With the increasing popularity of digital assets, it's no surprise that many securities are now being traded in digital form. However, not all digital securities are created equal, and some even outperform others.
Before we get into the security tokens that are making the moves, let's first take a look at what they are exactly and the benefits they offer to investors.
A Peak into Digital Securities
Digital securities or security tokens are digital assets issued on a blockchain that bears similarities to securities traded in the stock market.
Security tokens are a new type of investment that combines the best features of traditional investments, such as stocks and bonds, with the advantages of digital assets, such as cryptocurrencies.
They are created through a process called tokenization, which involves converting security into a digital asset. Security tokens can be used to trade securities on a blockchain platform, providing a more efficient and secure way of trading.
With crypto assets experiencing a downtrend, investors are flocking toward investments that pay a higher dividend in order to protect their portfolios against the fluctuations of the markets.
These tokens can be traded on digital marketplaces that allow investors to buy and sell security tokens. These platforms are revolutionizing how investors can access new and innovative investment opportunities and helping drive the adoption of security tokens by providing users with a convenient, secure, reliable, and efficient way to trade these new assets.
Platforms like the Security Token Market (STM) platform, which is hosting its very own token offering, provide the largest security token marketplace worldwide and a variety of tools and resources to help projects launch their security tokens and investors make informed decisions.
Top Winners & Losers
Now, let's take a look at the top movers and losers of 2022:
The $80 million market cap token TZROP is currently trading at $3.80, down a bit from its 2023 opening price. This downward trend of TZROP price has been in line with the rest of the markets.
TZROP started 2022 at around $2.40 and recorded an increase of 220% in its value over the next two months to hit $7.69 in early March. But since then, the asset price has only decreased until early November 2022. During this month, TZROP's price first went down to $3, only to rally to almost $6 in a week. This helped the token finish 2022 positively, up 66.6%.
The tZERO token gives its holders 10% of adjusted gross revenue on a quarterly basis, as approved by the board and outlined in the offering memorandum. This encourages token holders to temporarily lock up their tokens to receive dividends, which in turn promotes price stability.
The project managed to raise $134 million through its offering. It allocated 12.5% of the funds for different categories, each including future development of the token, development of products and services, strategic acquisitions, development of functional utility for token holders, augmenting technology & infrastructure, legal expenses, repayable of amounts payable to overstock, and lobbying lawmakers and regulatory authorities related to security tokens.
The tZERO team has already built a token trading system for users to trade crypto securities. It allows firms worldwide to break free from traditional finance constraints to access a global pool of capital for crypto securities. With the tZERO trading system, the project aims to disrupt existing capital markets by potentially allowing any public or private company to trade their own tokenized security.
Enegra Group (EGX)
Trading at $176 at the time of writing, the EGX token's price is actually flat after ending 2022 on a positive note, up more than 7.5%. But this doesn't mean the token didn't see any action. EGX's price started last year at about $163 and rallied by 75% in March.
During the down phase of the first half of 2022, the $14.4 billion market cap token EGX's price went down 69% in June from the $286 high three months prior to that. But the price recovered the very next month and has been keeping around $170 since then, for the most part.
The company Enegra Group enables commodity miners in emerging markets to compete globally by providing world-class trading expertise, risk management, logistics, and governance. Enegra's success has made them one of the world's largest owners of physical commodity offtakes, with an audited net asset value of over $33 billion.
Enegra has tokenized 100% of the equity in Enegra Group Ltd, with equity represented by the ERC-3643 compliant EGX security token issued on the Ethereum scaling solution Polygon blockchain. The Enegra Group team raised $12.75 billion.
The company's shares are managed by a licensed Trust Company on behalf of EGX token holders. This means that all rights and distributions are passed on to the token holders, including profits, dividends, and voting rights. As EGX tokens are classified as securities, investors are required to pass KYC/AML checks and agree to the EGX Terms & Conditions before being able to hold EGX tokens in a self-custody wallet.
INX Limited (INX)
INX token started 2022 at around $2, and throughout the year, it has only been on a downtrend, except during the Q3 of 2022. During this period, INX prices did see some volatility but not much.
The $49.4 million market cap token ended 2022 with a negative performance of 77%. This downtrend is continuing in 2023 as the token trades at $0.40 at the time of writing.
The project that raised $80 million through its token INX features security and utility characteristics. As a security, token holders receive an annual 40% distribution of any positive net operating cash flow. And as utility tokens, they will be used to pay for trading fees on the crypto trading platform. As such, INX token holders can benefit from the platform's success through annual cash flow distributions and by having their tokens appreciate in value as the platform grows.
INX is the native token of the INX ONE, which claims to be the world's first fully regulated platform that merges investing and trading in security tokens, cryptocurrencies, and capital raises offerings all in one place. By enabling access to multiple asset classes in a single platform, INX ONE aims to shape a new investor community.
Click here to learn all about investing in INX Limited.
Millennium Sapphire (MSTO)
MSTO started trading in 2022 at around $2.6 but dropped under $0.290 just two months later. This downside, however, was led by an upside of as much as 2,935%. This rally didn't last long, though.
In tandem with the crypto and stock markets, MSTO's price dropped 80% just over the course of one month from its April peak. From here, the asset price tried to recover gradually and managed to go past $1 in October 2022, only to end the year down by 84%.
As of writing this, the MSTO token with the fully diluted market cap of $38 million was trading at $0.250.
The MS Token (“MSTO Token”) is a Securitized Token Offering that gives investors an alternative investment in fine art. It provides the opportunity to own a piece of art that could potentially appreciate in value, join the ranks of the global elite who own such treasures, and capitalize on the growing popularity of NFTs. The project managed to raise more than $370k in its fundraising campaign.
MSTO Tokens actually offer fractionalized ownership in the Millennium Sapphire and give its investors a pro-rata share in the potential profits from its NFTs. To help generate ongoing revenue streams, Millennium Sapphire rolls out a series of NFTs featuring some of the world's most celebrated digital artists.
With a market cap of almost $7 million, the EXIT token is currently trading at $2.56, up 25% in 2023.
While the first week of this new year is positive for the token, the same was not the case for EXIT last year when it recorded an 89% drawdown. The token started 2022 at around $19, but it wasn't a straight downtrend for EXIT as other tokens did in this list. This one saw a lot of volatility, providing traders with many opportunities to trade the market.
The project raised $75 million through the Securitize platform. It offered shares of its Class A common stock in Regulation A, giving token holders ownership, voting, and dividend rights in Exodus Movement, Inc.
Exodus is a popular non-custodial crypto wallet founded in 2015 as a multi-asset software wallet that makes it easy for everyone to use digital assets. The wallet is available for desktop and mobile, allowing users to secure, manage, and exchange tons of crypto assets. Exodus aims to empower half of the world to exit the traditional finance system by the end of this decade.
Realio Network (RST)
The $1 million market cap RST token is trading at $0.29, as of writing, after ending 2022 in deep negative performance at $0.22.
The token was actually down 92% last year after starting the year at $3. However, RST did record bouts of volatility as it jumped in value by 269% during the period of Feb and April, and then in the month of July, the token rallied 900%
The Realio Security Token (RST) is a hybrid security token representing the Realio Ecosystem's ownership. The RST token offers investors a revenue stream in the form of profit sharing, and holders of RST can also run a node on the Realio Network to validate transactions while earning block rewards and additional revenues from issuance fees paid out in RIO. The RST token fund owns 100% of the Realio technology platform and has a maximum supply of 50,000,000 RST tokens.
This hybrid equity/utility token is designed specifically for DeFi applications and provides three sources of the yield — from DeFi-based protocols, network revenue, and business operations.
So, there you have it — the top movers and losers of 2022 in the digital securities space.
The digital securities market is still in its early stages. But with the increasing adoption of blockchain technology by traditional financial institutions, the continued rise of cryptocurrencies, and more investors turning to this innovative asset class, the digital securities space is expected to grow significantly in the next few years.
This makes sense, given that security tokens represent a promising new way of trading securities. They also offer several advantages over traditional methods in the form of greater liquidity, a more transparent and secure way of trading, and fractionalized ownership of security, making it more accessible to a wider range of investors. However, they also come with some risks, such as an uncertain and evolving regulatory landscape, that should be considered before investing.