Introducing STX.SWISS — Decentralized Security Token Exchange

The future of trading digital assets completely decentralized

Bastiaan Don



For months various companies have been trying to get their (in most cases yet to be built) centralized Exchange regulated so they can start trading security tokens (and offer them through so called STOs). The whole world is going to be tokenized if you have to believe the ill-informed media attention seekers around the blockchain ecosystem. They love to announce their “blockchain powered vision” (i.e. bring all the existing stocks onto a new centralized exchange) but completely forget to see if there is actually a need for this (value proposition). It’s raining press releases with partnership announcements of big corporate players, but they always lack the product focus and they just want to ride the “blockchain wave” without understanding what blockchain actually stands for.

Why do they need to become regulated?

Simple, their (very expensive) setup is based on old-world experiences and fear. They want to be in control of all the important elements of an exchange (i.e. the order book, the match-making, the price discovery, the liquidity providers and the custodian services). This automatically means that in most countries the financial regulator wants to have a tight grip on these players. On the one hand making sure they don’t do anything that is against the laws and regulations (i.e. to prevent a market maker from exploiting information asymmetries) but on the other hand, this leads to the fact that only a certain group of people have access to the products being offered.

Why using Blockchain properly is a total different ball-game

Yes, we have to emphasize “using Blockchain properly”, why? Well, you will find in all the announcements and plans that everybody is using blockchain technology for these exchanges or even using the word “private blockchains” which is a complete paradox. The core technology they plan or want to use might be called a private ledger — although it doesn’t make any sense and we have yet to discover a proper use-case for it — but it’s definitely not blockchain technology. As outlined above it’s so logical they want to use a private / permissioned ledger, because they want to be in control of their system.

Blockchain is being used to democratize markets (i.e. like blockimmo does for the Real Estate market) and applying it to the setup of an exchange is yet another use-case. Using blockchain technology for building an exchange automatically means that the core ledger (the foundation of the technical solution) is decentralized. Currently there is only one blockchain, which is the Ethereum blockchain, that offers both a high factor of decentralization (currently around 8'500 nodes) and yet you can build applications on it.

Consequential the key elements of the exchange (price discovery, order matching, liquidity providers, etc. —note: on-chain market making by a smart contract is fully transparent and predictable) are all decentralized (or none existent anymore i.e. the order book). This leads to the fact that the users of such a decentralized exchange are interacting (i.e. trading) amongst each other (peer-to-peer), without the interference of a centralized party /i.e. an operator. This is exactly how STX.SWISS is built — a completely decentralized financial infrastructure. — if you’re interested to learn more about our setup, please click here to read the blog post of the blockimmo’s lead software engineer Michael Dietz.

STX.SWISS — Outlook

STX.SWISS is a window into this decentralized world where security tokens, but also existing utility or payment tokens can be traded in an easy-to-use way. We’ve already listed 3 tokens (DAI, Maker and XCHF) and in the near future will list a first security token, namely the IMMO Token, which represents equity of blockimmo Ltd (learn more).

Important to mention is that, while the utility or payment tokens do not require any form of on-boarding (you can simply login with your wallet and start trading), the security token trading (i.e. IMMO) will only be allowed for identified investors (which have to go through the on-boarding process (AML and KYC checks) using blockID).

STX.SWISS is built on a global public ledger (Ethereum) enabling anyone to access and interact with it. In addition it interacts with several other decentralized solutions like Uniswap, Kyber, Maker, Compound, blockimmo and more. There are no exclusive protocols introduced (there is no value leaking), no new complicated token standards. There are no listing fees (to list a security token), no trading fees and no investor on-boarding fees. The platform is thus open for all.

Get involved!

Learn more why using existing standards is important: