Instant Access, through use of atomic swaps, allow for tokens issued on Securitize’s in-house DS Protocol, to be transferred in a peer-to-peer fashion.
Usage of the service is as simple as creating a web-link indicated a desire to buy/sell a private security. Interested parties can then connect through this link, and complete the transaction, safely, while remaining regulation compliant.
The technology being used to make ‘Instant Access’ viable utilizes a means of value transfer known as an ‘Atomic Swap’.
An Atomic Swap utilizes smart contracts known as ‘hash-time locked contracts’, or HTLC for short. Through the capabilities provided by such smart contracts, the need for centralized exchanges and middlemen, is eliminated.
HTLC contracts work by allowing multiple parties to submit proposed trades, with set requirements encoded. Only once all pre-set requirements are satisfied, will tokens and payment be released to the parties partaking in the transaction.
Typical parameters include things, such as:
- Transaction time limits
- Acknowledgment of receipt
Why the Fuss?
While achieving the capabilities provided through ‘Instant Access’ may be anything but simple, the rationality behind its development it just that – simple.
By providing the ability to buy/sell digital securities in a peer-to-peer fashion, new levels of efficiency will be made possible. This efficiency will result in a few key benefits,
- Cost savings
- One less party charging a fee
- ‘A’ sells directly to ‘C’, without needing to go through ‘B’.
- A new medium of exchange, providing increased access to buy/sell opportunities
- Cost savings
Picking Up the Slack
For those that follow developments in the world of digital securities, you may have already heard about the situation in which OpenFinance Network find themselves.
Simply put, the company is not generating enough revenue to cover operational costs. As a result, OFN is being forced to request listing fees from tokens supported on their secondary market trading platform. If unsuccessful, these assets will be delisted from their service.
If this situation does, indeed, progress to the point of de-listing, perhaps other solutions, such as ‘Instant Access,’ can pick up the slack. It would seem that it will, essentially, eliminate the need for a trading platform acting as a middle man between buyers and sellers.
In their release surrounding the development discussed here today, Securitize had the following to say when describing ‘Instant Access’.
“Securitize Instant Access is a very significant release for issuers and investors looking for liquidity. When allowed by the issuer, this feature enables investors in private securities to quickly and easily create compliant peer-to-peer transactions with no counterparty risk. What has typically been a very burdensome and time-consuming process (trading private securities) can now be completed compliantly in seconds with no fees other than the “gas costs” associated with the Ethereum blockchain.”
Based in the United States, Securitize was founded in 2017. Above all, Securitize operates as an issuance platform for digital securities. In the time since their launch, this promising company has managed to establish themselves as a leader within the sector.
CEO, Carlos Domingo, currently oversees company operations.