As each day passes, more digital tokens enter the crypto space, attracting capital to the ecosystem with the prospect and promise of a gratuitous decentralized future. Nowadays, all it takes is a whitepaper and website to raise money through a token or coin offering (i.e. ITO or ICO), and naturally, this has attracted the attention of venture capitalists and early-stage companies alike. This paradigm shift has been so dramatic that ICO fundraising surpassed that of Angel and Seed-stage funding in June of this year, and continues to grow at superlinear rates.

While the volume and flow of capital into the space is news to revel about, one of the underlying challenges from an investor’s perspective is valuation. There is no doubt; asset valuation is both an art and science, and crypto assets are not an exception to the rule. Science is needed to analyze the fundamental and technical factors affecting the assets’ worth, whereas artistic talent and imagination are needed to formulate a story that ties the science together. Without a rigorous approach to valuation, we end up in a scenario where much of the craze, hype, and sensationalism surrounding ITO/ICOs influences token/coin market valuations to vastly exceed their ‘intrinsic’ value (however you define this).

As an investor, one challenge is how to value a token that has digital utility. Network size? Token float? Trade volume? Transaction latency? Daily active users? Some specific token use case metric? If a token does not have a legally-enforceable claim to any physical asset or expectation of monetary profit, this question becomes difficult to answer, thus perpetuating the volatile, boom-bust, and unstable lifecycle of most tokens and fueling research, advocation, and the desire for stablecoins, of which securities tokens can represent. [1,2]

Luckily, the crypto ecosystem is evolving. While 90+% of tokens in circulation are by definition, utility tokens (e.g. not asset-backed), securities tokens (e.g. asset-backed) are being conceptualized and in development around the world due to their desirable properties. Although the U.S. and other major global regulatory jurisdictions have yet to embrace our digitally tokenized future, Canada is one of the few major jurisdictions pioneering the adoption of crypto with the regulatory approval of three ICOs earlier this year -all of which are utility tokens. [3, 4, 5]

This is only the beginning. Securities tokens are the future of finance. One day soon we will live in a world where the transfer of value between multiple parties is decentralized, fast, low-cost, frictionless, and in particular, doesn’t require conversion into different asset classes (e.g. if you want Google stock, I should be able to send you tokenized Google stock directly, without having to convert to currency on an exchange, transfer the currency, and then have you purchase the stock on an exchange).

Still, there has yet to be a regulatory-compliant token in Canada whereby the value of the token represents ownership in a real asset. Corl will change this. Investor appetite and regulatory agency interest are eroding the barriers of creating securities token, and Corl is at the forefront of this movement. While the frenzy of ICOs and insurgence of utility tokens continue to flood the ecosystem, Corl is tirelessly working on combining the concept of revenue-sharing with blockchain technology to bring the much-desired value that investors and companies are looking for. (The Corl token is backed by equity ownership in the company, which receives royalty payments on a monthly basis from its portfolio companies. Thus, the intrinsic value of the fund and the price of the token are directly linked.)

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