Rock Token (RKT) Fundamental Analysis — The bridge between crypto and institutional money

Published in

The Sandor Report

5 min readApr 20, 2018

Big institutional money is actively seeking ways to enter into crypto, but it’s not a trivial exercise. There is no Vanguard or BlackRock fund composed of promising ICOs because the regulations are chaotic, compliance is loose, and risks are sky-high. The project around Rock Token wants to address all these issues and marry the crypto markets with the world of traditional finance. Their execution is flawless so far.

TLDR; Why RKT?

To understand why RKT is amazing we need to take a look at the wider cryptocurrency landscape.

Blockchain projects raised $3.5–4 billion US Dollars to date through initial coin offerings (ICOs). But it’s a mostly unregulated way of raising funds, and scams are rampant. More than half of last year’s ICOs already failed, and the tokens went to zero. Some of the ICOs by legitimate projects are doing incredibly well, though. It’s not unlike the startup scene: most of the new companies disappear, a few become the Facebooks and Amazons of tomorrow.
Institutional money is serious about entering crypto, but there are not many vehicles at their disposal, and for ICOs there are none.
It is hard to provide an avenue for institutional investors to join ICOs, because of the chaos around regulation. Laws are very different in China and Japan, in Hong Kong and the US; and they are changing fast.
The project behind Rock Token, the Gibraltar Blockchain Exchange (GBX) and the Gibraltar Stock Exchange (GSX), is solving exactly this problem. Once operational, institutional money can invest into highly vetted ICOs possibly on a traditional stock market (more on this later), with complete regulatory compliance. It is an absolute game changer.
The Rock Token (RKT) itself is a utility token to be used on GBX. Think of it as the Binance Coin (BNB) or QASH but on a market where the biggest traditional players can trade.

Qryptos is the best place to buy RKT (sign up here if you don’t have an account — it’s an affiliate link). You can also buy RKT on the IDEX decentralized exchange, although the spreads are pretty bad there.

Project background

GSX is a traditional stock exchange. Although it’s relatively small, what matters from our perspective is that it’s an EU-regulated market with full regulatory compliance (they also operate globally as a self-regulated market). While the initial growth of the cryptocurrency markets was akin to the Wild West, often displaying outright anti-regulation sentiments, GSX realized that mainstream adoption requires compliance. GSX launched a new project, the Gibraltar Blockchain Exchange (GBX) to bridge the worlds of cryptocurrencies and traditional finance.

GBX, at first sight, is not all that different from a “normal” cryptocurrency exchange, although certainly much more transparent than Bitfinex and others, with a clear ownership and banking relations. Once fully operational, traders can buy and sell several cryptocurrencies, as well as convert fiat into crypto and vice versa. What makes it unique is GBX Grid, the ICO platform.

Projects wishing to raise money through GBX need to go through a strict vetting process. They need to have a viable proof of concept, validated by a GBX-appointed sponsor firm (which is playing a similar role an investment bank plays in a “normal” IPO). They need to adhere to the regulatory framework GBX is operating in (the Gibraltar DLT regulations, one of the most forward-looking in the world). Once an ICO gets the green light, it becomes available on GBX for all sorts of investors, including institutional money. They get access to highly vetted projects listed on a regulated market. Existing tokens can get listed on GBX as well, but they need to go through the same vetting process.

The real magic happens when some (the best) of these digital tokens are issued as asset-backed securities on the main Gibraltar Stock Exchange. This opens up another huge market, as at this point the more conservative investors can buy shares in security token-based blockchain projects just like they buy a “normal” stock on any “normal” market. GSX-listed projects can be double-listed on any EU stock exchange and/or the London Stock Exchange. Imagine a Vanguard or BlackRock fund with blockchain projects. If you know anything about investing, you know this is a real game-changer.

GBX is closely allied with the Japanese exchange, Quoine. In fact, QASH (the Quoine Token) and RKT have overlapping use cases. Together they aim to cover two-thirds of the world, Asia and Europe.

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Token economics

RKT is the utility powering GBX, and it runs on the Ethereum blockchain as an ERC-20 token. All the listing-related fees need to be settled in RKT, and projects need to raise at least 10% of the funds in RKT (if they don’t reach this threshold they need to buy RKT up to 10% of the total funds raised). A portion of this is held in escrow by GBX to make sure the issuer complies with its obligations (which builds trust). GBX offers a discount on trading fees settled in RKT.

Every investor holding at least $1,000’s worth of RKT gets early access to ICOs, 24 hours before the public sale starts.

It’s important to note that there are 318.5M RKT tokens in circulation, but the total supply is 900M. The remaining tokens will be released later.

Company & team

RKT is backed by the Gibraltar Blockchain Exchange, an arm of the EU-regulated Gibraltar Stock Exchange. The team, as you might expect from a traditional stock exchange, is extremely seasoned.

Managing Director

Nick Kovan has 25 years of experience in finance under his belt. Before founding GSX, he worked at Bear Sterns and later as the Global Head of Equities at ING Barings. He’s a particularly good speaker as you can see from the embedded videos.