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Gooood morning, Rainmakers! ☀️

As always, we have two captivating topics for you to dive into:

1️⃣ 🇲🇽 Tulum is Trending: Tokenized Luxury Villas in Mexico

2️⃣ 🛥 Tokenized Yachts: Special Guest Peter Gaffney

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 150 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 many others!

Founding Member status and pricing is only available through May 2023, sign up today!

🇲🇽 Tulum is Trending: Tokenized Luxury Villas in Mexico

Just about 80 miles south of Cancun, Tulum has become an increasingly popular vacation spot in Mexico. Cancun International Airport receives tourists flying in and a 2-hour drive later they reach one of the last Mayan cities to be built, Tulum.

And now YOU could own a piece of luxury real estate there! Candela Token is issued on Stobox and the STO went live earlier this month at Tulum Crypto Fest during an after party on May 5th (Cinco de Mayo). Guess where the after party was…

Yup, at Candela, a boutique community of 12 luxury 4- and 5-bedroom villas!

Ok so what are the details?

Interested investors can participate for the low minimum of $5,000 USDC. The first villa will only have 20,000 tokens available and will be issued at $100/token. Tokens come with access to special events at Candela, rental returns based on the villa's outstanding performance, and nightly discounts like the Aspen Coin token holders.

Candela currently has 10 communities and expects to expand to 200 by 2032. Token price increases as more communities are added to the portfolio, incentivizing investors to get involved earlier. If new tokens are offered to the public in the future, existing token holders will have the right to purchase more first.

According to their whitepaper, after administrative and property & rental management, they expect a net profit of 60%!

This token seems like a fun opportunity but of course none of this is financial advice, do your own research! Congratulations Borys Pikalov and Stobox team 👏🏼

🛥 Tokenized Yachts: Special Guest Peter Gaffney

While we’re on the topic of luxury and in honor of the SoFlo Boat Show this past weekend, I thought we’d feature one of Peter Gaffney’s “Tokenize This” articles that fits in perfectly… tokenized yachts!

With meetings and meetups happening poolside, oceanside, bayside, and Wharf-side, the energy that fills the city is off the charts. Boat rentals are likely doing well as founders, VCs, and city officials (shout out Mayor Suarez for paving the way🔥) vie for some time on the water to blend business and pleasure.

This collective pool of vision, talent, and capital leads us to our next tokenization topic. One that blends not only business and pleasure, but also blockchain technology. Let’s take a look at Tokenized Yachts and harness the #MiamiTechWeek power to bring the concept to fruition.

Value Adds

Primary Yacht Owner & Manager (Token Issuer)

• Ability to sell yachts closer to the true value, and avoid a liquidity premium

• Can close sales at a quicker pace than usual, as it’s typically easier to find many small buyers rather than 1 able buyer for an asset of that magnitude

Fractional Owners (Tokenholders)

• Direct ownership into an elite, luxurious asset with a breadth of uses (personal, professional, & investment)

• Perks and usage time can be built into the security token structure, similar to a timeshare

• Freely tradable ownership which accommodates individual needs and desires

• Cash-flow producing potential if the yacht is listed for rental options

The easy rebuttal is, “Why not just rent a yacht for 6 hours when you need it?”

And the easy reply is, “Ownership.”

Since security tokens can be so fluid and flexible in their services, it’s possible to program usage directions right into the digitized cap table. What I mean by this is that an owner with X amount of tokens can get the rights to use the yacht for Y days throughout the year. There can even be a voting system applicable to all tokenholders in order to determine which days of the year (or specific events) are most desirable. The rights to these days can begin with the largest tokenholders and descend from there.

Even more useful is the interactivity capabilities that these tokens may provide. It’s your day with the yacht and you’re only using half the max capacity? Feel free to make this known to your fellow tokenholders and offer open slots to the next largest holder, and so on and so forth. This allows for some “consumer surplus” (using my poetic license with this phrase, cut me some slack 😉) as other owners would get access to more days with the yacht than originally expected.

From an investment standpoint, an influx of demand usually equates to a higher price of assets in general. An influx of demand for yacht access and ownership in Miami specifically may be enough to drive token prices upwards. Why buy a condo when you can rent one on Airbnb for a month? Same premise — why rent when you can expect a higher valuation in the future.

Drawing on the Airbnb tidbit, it is still possible for the yacht to be rented out to third-parties looking to spend a day on the water. In this scenario, tokenholders would be entitled to their proportional share of earnings. The earning potential is largely based on the size of the cap table and the frequency of usage (i.e. earnings will be minimal if the yacht is being used by tokenholders 350 days out of the year, but higher if only being used 180 days out of the year).

Now, comparing housing to a luxury vehicle is apples to oranges, but tides are shifting, and so is the future of finance. If there is a significant value of tokens held by one person, it’s possible that tokenholder may be able to use the tokens as collateral in future transactions. The collateralization of security tokens is indeed on the horizon and is already being made use of by companies like Realio and Reinno. Suddenly, just like that, equity in a mega yacht can be used the same way as equity in a home. Breaking down barriers token by token 🤝.

Continuing with the comparison, paying down a mortgage for a home/condo increases one’s equity in the property over time. Similarly, someone looking to add equity into their “yacht position” can simply buy more tokens on the secondary markets. On the flip side, lessening one’s magnitude of ownership can be done via selling on the same exchange. The precise control that owners have over their value of assets truly is incredible with security tokens.

Alright. Theoretically, can we actually do this?

Don’t ask me. Ask the teams at Miami Yacht Charters and CharterLux. I’m sure they’d be interested in hearing about how security tokens can bring their sales closer to the full Fair Market Price and diminish that liquidity premium they’ve been losing. (We touched upon this on a previous Tokenize This article. Big ticket assets are usually less liquid, and sometimes have to sell at a discount out of necessity, which is one externality for the seller).

…

But yes, you can ask me after. And the answer is YES. We can tokenize yachts, manage the usage agreements and perks, and you can let your Twitter following know that you’re now a proud Yacht Owner, even fractionally 😎.

Disclaimer: This is not financial or investment advice and should not be interpreted as such. Please do your own research on investments and financial decisions before partaking in any ideas or ventures depicted in this publication.

💦 What else is Drippin’

Real World Asset Tokenization 2023

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.