Andreessen Horowitz-backed Harbor Launches Tokenized Securities Platform With $20M Sale

Recently, Harbor, a blockchain startup focused on tokenizing securities, such as real estate, fine art or private equity, launched its initial offering – the sale of a $20 million students dorm near the University of South Carolina. According to the company, the property will be split into 955 tokens valued at $21,000 each, for a total of $20 million.

New Age for Private Securities Investments

It is undeniable that it is profitable to invest in real estate, as well as others illiquid assets, such as company equity, investment funds, or fine art. Unfortunately, there are no easy ways to make money, and this isn’t an exception. Investing in real-estate might sound easy at first, but that quickly changes. Some even say that investing in real-estate is harder than in stocks and they would be right — the mountains of paperwork required are just mindboggling.

The other downside is that even if you do manage to get through the tedious process successfully, you will most likely end up selling it for less than its actual value. According to some researchers, illiquid assets are estimated to get about a 20–25% reduction to their value. But what exactly are illiquid assets?

To put it simply, “illiquid refers to the state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value.” This is usually due to the lack of willing buyers for the given asset.

Tokenizing Securities

The issue with tokenizing securities is that it takes a lot of work to comply with their regulations. To help with the tedious processes and solve the illiquidity issues of those assets, Harbor is building a protocol that ensures each token transaction complies with the securities laws all over the world.

Joshua Stein, the chief executive officer of Harbor, said that “At any given moment we can tell the issuer the exact person or entity who owns what and when.” Since this is required by law, the company demands new customers to go through a “know your customer,” or KYC process. Besides that, setting up an account on their platform is as easy as opening up a brokerage account.

Stein believes that the “Tokenization of private securities can bring liquidity to trillions of dollars of traditionally illiquid assets.”

The Mega-Dorm You’ve Probably Never Dreamt Of

The building, owned by Convexity Properties, is a 14-story complex that has “world-class amenities,” or at least that how it is described on the website. The rooftop of the build is complemented with a pool, a hot tub, and a 2,200 square foot fitness center.

With the initial sale of Harbor, the property owner intends to raise a minimum of $15 million. On the company’s platform, investors will be able to exchange USD, Bitcoin, and Ethereum for the tokenized securities.

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Interested in other cool crypto content? Check out OTC volume included in VanEck ETF and ICO teams paying for “fake” volume!

Blockchain is Outpacing The Internet

Crypto bear markets always hurt. For cryptocurrency traders and investors, the market can seem very unforgiving. While public opinion and trending news stories tend to dictate crypto price action in the short term, major leaps forward in the fundamental technology are happening daily. One important milestone we think should be common knowledge is that blockchain tech is actually outpacing the internet in terms of the speed of its development – here’s why that’s important.

Blockchain Development

Blockchain tech allows developers to create immutable, highly secure databases of information that need public consensus to be changed. While inventing an information database that can only be changed by group vote may sound simple, the application of this tech actually enables users to engage in very complex processes indeed.

Allowing citizens to cast votes through blockchain ballots while abroad is one use case, although the issue of digital voting of any kind is always controversial. Storing healthcare and academic records on the blockchain is also an excellent use case, democtatizing access to services usually reserves for civil servants or private sector professionals.

Blockchain is Inherently Valuable

Blockchain is a valuable system that is currently enabling researchers to innovate and break new ground. The technology is the underlying protocol for thousands of cryptocurrencie, making it a vital partof the digital assets space – but how widely is blockchain being adopted?

Security Token Offerings

STOs are one of the areas of crypto guaranteed to show constant activity over the coming years, with economists predicting billions of dollars in revenue generated from the legally compliant system of tokenized fundraising.

STOs allow project teams to tokenize everything from art to luxury cars and real estate in the hopes that it will be resold at a higher price after accumulating value as a rare asset. Apartments in Manhattan have been sold for millions of dollars worth of cryptocurrency, and now citizens of all wage brackets can invest as opposed to millionaire accredited investors getting in early on all the investment opportunities.

While the SEC and other international financial regulators have made it clear that many cryptocurrency projects are non-compliant with securities law, STO teams have no need too worry about that. ICO fundraising has tapered off to near-extinction in recent times, but STOs are prepped to rise as the phoenix from the ashes.

While the SEC can seek prosecution from anyone who has invested in a crypto project even if they only decide it’s not compliant with securities law after the fact, security token offer an extra layer of certainty in bringing a degree of regulation to the hitherto unregulated crypto market.

The SEC’s acknowledgment that some tokens represent a share in a company is a game changer for the blockchain industry which is developing