After conducting my analysis, I made a few observations of what occurred in January and how we can improve upon our industry. The security token industry had a total of ˜$194K in gross trading volume between the three live marketplaces: tZERO, Uniswap, and OpenFinance Network, but it did not come as one would expect; there was a significant dollar volume discrepancy between the liquidity providers. OpenFinance and Uniswap had a total of 8 traded tokens in January. The obvious assumption would be that these marketplaces would have the vast majority of the volume due to housing more of the tokens. That couldn’t have been further from the truth.

tZERO had only one actively traded token, yet represented˜88% of the trading volume in dollars… wow.

This is a clear indication that the number of security tokens an ATS or exchange may have is not indicative of more trading volume. “If you build it they will come.” In other words, if these assets are in high demand, then investors will trade. I believe a huge proponent tZERO incurred the majority of the volume is tied to the future potential that tZERO represents. Being a subsidiary of Overstock.com — a well-known, reputable brand with a market capitalization exceeding $350M — they have successfully positioned themselves to be an outspoken public leader in the industry. The investor letter from their CEO, Saum Noursalehi, mentions that they have over 200 companies in their pipeline with plans to add as many as possible to their platform. Additionally, he mentions that Overstock.com/Medici Ventures (the company’s venture arm) is committed to supporting them financially if need be. Currently, tZERO only has TZROP with active trading, but they will look to use their strong brand and reputation to maintain their trading volume dominance.

On the other hand, OpenFinance has 5 live trading assets on their ATS but has very little consistent volume. The low volume could be associated with a multitude of factors, but it is clear that the current assets are not in high investor demand. Despite recently announcing the addition of Current Media ($CRNC) to be listed in Q4, there is not much information or transparency regarding the token’s underlying asset on the company’s site or through OFN directly. This is a common problem for each of the live assets on the platform. We definitely need to see some more transparency — isn’t that what blockchain is all about anyway? We at Security Token Market are aiming to provide high-quality, quantitative-based content to counter the current information asymmetric environment that investors, innovators, and enthusiasts currently reside in.

To see our full breakdown of all nine live security tokens, and their FULL 2019 performance, click here!