- What's Drippin'
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- 💵 Franklin Templeton's BENJI
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Gooood morning, Rainmakers! ☀️
Hope those of you that went to Consensus 2023 had a great time! As always, we have two captivating topics for you to dive into:
1️⃣ 💵 Franklin Templeton's BENJI: Milestone and Multi-Chain Issuance
2️⃣ 📈 Open-Ended Subscriptions from Tokeny: A New Solution for Tokenized Funds
Without further ado, it's time to…
Get Liquid💧
A MESSAGE FROM THE STA SUCCESS NETWORK
Are you an issuer, asset manager, tech provider, law firm, or any other stakeholder in tokenization? Then the STA Success Network is for you!
The Success Network is meant to bring you all together to collaborate, stay up to date via STA’s research and weekly insights, publish on STM, and more.
With over 100 members, the STA Success Network already features members ranging from financial professionals to technology experts and active tokenization pioneers. Come join Dalmore Group, Coinbase Institutional, Winston & Strawn, Freeport, and over 100 other members!
Founding Member status and pricing is only available through May 2023, sign up today!
💵 Franklin Templeton’s BENJI
This past week Franklin Templeton announced their OnChain U.S. Government Money Fund (FOBXX) has surpassed $270 million in assets under management (AUM) as of March 31, 2023. This was originally issued on the Stellar blockchain back in April 2021 as the first mutual fund to record ownership on a public chain.
Only a couple days after announcing their $270M milestone, the firm announced they’re launching the $BENJI token on Polygon and can be found within their Benji investment app which also represents interest in the FOBXX fund. We love multi-chain issuances!
Before going further, let’s dive deep on what a money market fund is:
Let’s Get Liquid 💦
A money market fund is essentially a mutual fund that invests in short-term, highly liquid investments such as cash, cash equivalent securities, and U.S. Treasuries to name a few examples.
Although they aren’t as safe as cash, they’re pretty close in terms of risk, making them a great way to temporarily park some cash.
In the case of Franklin Templeton, their FOBXX is specifically a government money fund, meaning they must invest at least 99.5% in cash, government securities, and repurchase agreements that are fully collateralized by cash or government securities.
Back to the topic, this is relevant because it represents a great way to mix blockchain with traditional financial institutions at lower operational costs and increased transparency.
When people ask what chain is best to issue on…
As their head of digital assets, Roger Bayston, puts it: issuing on Polygon also brings the element of interoperability and of course greater distribution. If investors prefer one blockchain over another, why should they have to be limited as to what they can invest in?
Not only that but now the investment can interact with the rest of the ecosystem! Whether it’s collateralized loans, other DeFi apps, or even portfolio management, having assets on chain opens lots of doors for both the issuer and investors.
Congratulations Jennifer Johnson, Roger Bayston, and the Franklin Templeton team as well as the Stellar and Polygon blockchains 👏🏼 What an exciting development that shines a bright light on the future of tokenized assets!
You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial professional, call us at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
📈 Open-Ended Subscriptions from Tokeny
Introducing Tokeny’s Open-Ended Subscription solution! This new feature allows issuers to keep the NAV of a token updated directly on their offering page for investors to continually be able to participate.
Wait what’s a NAV? What does open-ended mean?
This NAV?
No not that NAV! 🤦🏽♂️
I gotcha 👇
Let’s Get Liquid 💦
Starting with Net Asset Value or NAV, this is the value of an asset after expenses. If a token represents interest in a fund, then the token’s NAV is calculated by
(Fund’s Asset Value - Fund’s Liabilities) / Number of Tokens Outstanding
Open-ended refers to the fact that unlimited shares of a fund can be issued. These shares don’t trade on an exchange, instead they can be redeemed with the issuer (the fund) at the NAV price.
Their counterpart, Closed-ended funds, have a limited number of shares that they can issue and then they trade on an exchange.
For example: and Exchange-Traded Fund (ETF). Because these shares DO trade, their market price is susceptible to supply/demand thus it may not always equal the NAV.
Back to the topic, Tokeny is making it easier for issuers to use the open-ended model in a tokenized format. Typically NAV has to be calculated at the end of each trading day to accurately show the value of the underlying securities.
Now Tokeny’s issuers can dynamically update their offering pages, allowing them to provide a “digital, transparent, and real-time experience provided to investors throughout the subscription process” 24/7 for investors.
Tokeny’s Open-Ended Subscription Solution
This reduces distribution fees by avoiding intermediaries between the issuer and the end distributor. The subscription process is fully digital, including signing subscription agreements, payments, and distributions.
Once the new valuation is set, investors receive their tokenized securities directly minted into their wallets. As I mentioned in the Franklin Templeton section, having investments on-chain allows for interactions with the rest of the ecosystem.
Need liquidity but don’t want to redeem your tokens? Collateralize them for a loan!
In it for the long-haul but want to earn more? Stake them in a liquidity pool!
Congratulations Luc Falempin and Tokeny Team! 👏🏼
💦 What else is Drippin’
With Real-World Assets (RWA) shaping up to be the theme of 2023 within digital assets, Security Token Market just published a primer that looks at 13 public blockchains and sample cases, as well as shows some love to initiatives on the private blockchain side.
RWAs can take the form of real estate, private funds, mortgages, asset-backed securities, even receivables. Essentially, onboarding traditional or existing assets to the blockchain in order to make use of them in the DeFi ecosystem. The idea is that 1) real-world assets serve as superior collateral than an unbacked stablecoin or digital asset and 2) investors and asset owners yearn to make use of the DeFi ecosystem (lending, swapping, real-time settlement) in a controlled and compliant manner. Ideally, the DeFi ecosystem will provide asset owners with added benefits and precision NOT found in the traditional capital markets landscape.
Keep in mind this is geared towards:
-prospective security token issuers with models from active issuers
-asset managers
-tokenization service providers like digital broker-dealers & issuance platforms
-Layer 1 and Layer 2 blockchains, and private networks
This is not financial or investment advice.
Everything in this report is for informational and entertainment purposes only. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.