It’s tZERO's World and We Are Just Living in It — May 2020 Review
Every month, the research team and I compile the security token trading and data analysis report. If you haven't read the May 2020 report already, compare all asset prices, volumes, and more in detail here.
Security Token Market Cap Surpasses $100 Million
For the first-time-ever, the security token market cap has surpassed $100 Million USD! 😲
This was largely as a result of Overstock.com's security token dividend (OSTKO) going live on tZERO. The milestone is great for the industry as it shows the tremendous growth that we have experienced thus far. I can't wait for more security tokens and liquidity providers to go live to bring this security token market cap to the billions and even to the trillions one day!
There is a Huge Volume Discrepancy Among the Marketplaces
The aggregate trading volume in dollars for May was $998,545.20. The break-down per marketplace is as follows:
tZERO: $949,463.00 (95.08%) — 2 traded tokens
Uniswap: $40,150.00 (4.02%) — 7 traded tokens
OpenFinance: $6,357.00 (.64%) — 5 traded tokens
Nxchange: $2,575.20 (.26%) — 1 traded token
As you can see, tZERO incurred the vast majority of $ trading volume in May. It's interesting to see that the quantity of security tokens a marketplace has is in no way indicative of the amount of trading volume. In my January 2020 observations post, tZERO only had one trading token and amassed 88% of the trading volume. In May, tZERO had two tokens trading out of 15 total and incurred more than 95% of total trading volume.
The main contributor to this dominance, was the addition of Overstock.com's digital dividend to the tZERO trading marketplace. In case you missed it, Overstock successfully distributed its security token dividend (OSTKO) to common stockholders on a 10:1 ratio. This is incredible for adoption because all 4.37 million distributed tokens are exclusively traded on tZERO, therefore forcing all token holders to create an account on tZERO to access it. I anticipate tZERO showing a similar dominance, due to the large influx of users.
tZERO vs OFN is No More (For Now)
For the past couple of years, there really hasn't been a lot of competition for secondary marketplaces of security tokens. OpenFinance was first out the gate with the listing of SPiCE VC and has since listed four more assets: 22X Fund, Blockchain Capital, Protos, and Lottery.com. tZERO came into the picture not long after and initially listed one token, TZROP, which is a security token with revenue-sharing rights to the tZERO platform. For the majority of its lifespan, tZERO has been the outright leader for market cap, until recently, in May, OpenFinance passed tZERO for market cap leader for the first time since January!
Just as OFN was beginning to gain ground, tZERO officially listed another token (OSTKO) with live-trading — blowing OFN out of the water. It was only a matter of time until tZERO listed more assets. Hopefully OFN lists more assets, but for now, tZERO has a defining lead.
What Happened to RealT in May?
Interestingly enough, all 6 of the RealT properties posted a positive return in April; whereas, this month, they all posted negative returns. There is no definitive evidence as to why they were all negative, but on a more positive note, the US markets were up a pretty penny — indicating more evidence that these properties are weakly correlated and some even negatively correlated to US equities.
RealT aggregate returns:
April: +4.27%
May: -2.66%
As a reminder, RealT token holders have rights to daily dividends automatically distributed via Smart Contracts — ensuring a consistent stream of cash for the token holder. Even when they are trading down, dividends can help hedge their negative return.
Thank you for reading my May 2020 Market Report Review!
Want to get in touch with me? Questions? Comments? You can drop me a line at jonah@stomarket.com, Twitter @jschul24, or LinkedIn @jonahschulman. Talk to you next month!
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