Introducing The Two Token Waterfall

A liquidity-optimized framework for tokenizing private placement real estate securities

As a programmer who wrote code on Wall Street for many years, I can attest to the complicated nature of financial instruments and that there are a wide range of investment services that have not evolved in a long time.

The inefficiencies are solvable.

Private placements require a tremendous amount of work for issuers and investors, thus these placements tend to be bought but not sold. Underwriting methodologies, legal structure, financial savvy and experience vary widely by platform — and it is up to the individual investor to analyze these factors. Aided by the JOBS Act, private placements have become more accessible in recent years, but there are still many fundamental issues in the private securities market. By contrast, investments in the form of public securities are standardized, and evaluation by the investor is largely truncated to solely collateral and spread.

The world of blockchain capital formation needs to create a standard, if it truly seeks to concurrently provide liquidity and a normalized structure to reduce the range of factors an investor must evaluate. This will yield a higher rate of adoption, and allow private placements to evolve. Our proposed structure strives to set the basis of this paradigm. We are pleased to introduce our whitepaper:

We see a bright future for the securities token world. Propellr — a digital end-to-end creation, management and servicing platform, is well positioned in partnership with Fluidity to bring tokenized security offerings to the investment community. We welcome you to provide feedback on what we believe is the correct structure for tokenizing private placement securities.

Learn more about Propellr and Fluidity.


Special thanks to Mel Higgins, Don Mosites, Khurram Dara, Sam Tabar, Rob Paone, Annelise Osborne, Patrick Berrarducci, Deepa Sathaye, Richard Slenker, Maggie Hsu, and Kyle Lussier for helping write and give feedback on the whitepaper.