SMARTeFunding is the first product of my newly founded startup. A SaaS that makes the creation of financial products used in Crowdinvesting a lot easier and cheaper.
Here I will outline where I envision the CrowdInvesting space is heading and why we created SMARTeFunding the way it is today.
My Vision
- All financial products will be tokenized.
- Investors own their tokens directly.
- All payments happen through smart contracts.
- One platform for trading.
1. All financial products will be tokenized
The perks of tokenization are obvious:
Fully transparent, decentralized, interoperable and uncensorable.
If you are using a “private blockchain” you are doing it wrong. It is simply another word for an expensive database, it does not make sense.
If your blockchain is made by JPMorgan or Microsoft you did not get the message. You are re-creating the bank depot! This is what we want to get away from…
I understand why people make these decisions. I simply think these are totally wrong long-term.
Scalability and Costs
Blockchains will scale. Layer 2 is already here. The road to thousands of TPS that cost a few cents exists and is being worked on.
2. Investors own their token directly
If you are using a “wallet api” you are doing it wrong.
Investors will own tokens directly, not through an intermediary. Having your own wallet will be like having your own bank account today. A bank account that you control completely.
UX
Installing Meta Mask is not easy. Switching to a layer 2 network is hard. Looking up your transaction in Etherscan is confusing.
But…
it is like saying in 1995 that you will not use the Internet because it is hard to use. Yes, it was hard to use than it wasn’t and the rest is history.
3. All payments happen through smart contracts
Today security tokens are only used as certificates, to proof that you own a specific share of the investment. All payments still happen outside, in the traditional banking world.
Crypto is the native currency of the internet. All payments will be in crypto. You will receive your interest payments automatically through the logic implemented in smart contracts.
Governments will have a wallet. Taxes will be collected automatically through the blockchain.
What is the Ethereum address of the government again? Pay taxes directly.
4. One platform for trading
All security tokens will be tradable openly on one platform. The opensea of security tokens.
Connect with your wallet, make an offer, get your tokens transferred into your wallet and get your interest payments.
The SMARTeFunding approach
With SMARTeFunding you can easily create tokenized securities and make them available to investors in under one hour.
We do not use “wallet-as-a-service”. You have to create and use your own wallet. This way, you really own your tokens.
Sadly, payments still have to happen in the traditional banking world. This is the next big thing that we are working on.
It will require two things:
- The smart contract logic (easy)
- adjustments in the regulatory framework (hard)
I still do not know of any security token that is regulated by the Bafin that pays out interest in crypto.
To summarize
If your tokens…
- are not tradable,
- are not on an open blockchain,
- are not stored in a private wallet,
no one will want to invest!
