Alethena’s Share Dispenser — How We Unlock the True Potential of Tokenisation
Explore a truly digital way to become a shareholder
From Tokenised Equity to Market Liquidity
On the 6th of December 2019 it was official: what we announced in our Medium post as an industry game-changer on the 26th of September, has finally been approved by the Commercial Register of the Canton of Zug and published in the Central Business Name Index. We have become the first company to successfully tokenise its entire share capital on the Ethereum blockchain! Our shareholders will thus be holding tokenised shares, endowed with claimable rights, i.e. dividend- and voting rights.
We were and still are very proud to have achieved such a pivotal milestone. However, tokenising shares is just a first step towards the final goal of unlocking the true potential of tokenisation. If you tokenise equity it is like buying an option on liquidity — there is an inevitable opportunity to trade peer-to-peer without intermediaries; nonetheless there exists no obvious market with a market making mechanism that naturally enables such trading. In the second step we therefore need to realise this liquidity option. And that’s why we have built the first version of our so-called Share Dispenser.
Share Dispenser = Your Own Private Exchange
The Share Dispenser essentially represents an automatic market making mechanism that enables anyone to buy or sell any number of shares instantaneously (in technical terms, the Share Dispenser represents a smart contract deployed on the Ethereum blockchain). The sole constraint we face is the amount of shares a company supplies to the dispenser (e.g. 5% float) and the amount of XCHF (e.g. CHF 100'000). Anyone can then buy and sell shares directly at a price dynamically computed depending on the current demand and supply. For our first version we employ a simple linear pricing function:
The company sets the minimum and maximum price. This feature will however be part of our future research and is planned to be enriched with a new type of matchmaking mechanism.
But why is such a solution actually useful? In theory you could deploy your tokenised equity smart contract on a decentralised exchange. However, as an alert crypto observer, you should have realised that the low volumes on these exchanges do not provide the necessary liquidity and market depth that is expected by an issuer. So what if you could build your own private exchange without being a security dealer, providing the appropriate market liquidity without actively managing this mechanism? That’s exactly what we resolve with the Share Dispenser — we open a new liquid asset segment for everyone!
Why do we see such a potential in this solution? It is a well-known fact that the access to primary and secondary markets is an important factor, not only for start-ups but also for small- and medium-sized enterprises (SMEs). Employing the Share Dispenser concept to this market could unlock a complete new asset segment to a wide range of investors. Especially during times of low interest rates and in one of the longest bull-runs in the history of stock markets, investors are looking for alternative investments and diversification. Furthermore, over-the-counter (OTC)- and non-traded shares offer higher dividend yields but the setup of a portfolio is costly in terms of time and money due to liquidity constraints.
How Does It Work?
You can find here a concise manual on how you can buy or sell ALEQ tokens through Alethena’s Share Dispenser. If you have any questions, feel free to contact us at firstname.lastname@example.org.
The current Share Dispenser represents just a synopsis of what will come in the future. Stay tuned for more!
The sophisticated reader can find the technical appendix of the Share Dispenser here.
Visit www.alethena.com for more information.