Alphaseed changes the essential challenge represented by high value, illiquid assets, by making art, real estate and tangible assets tradable, transparent and easily accessible.
Certain illiquid assets may be very valuable, limiting potential investors to a small pool. The majority of investors are excluded from investing such large amounts of money or may not want to focus on one particular asset class. Alphaseed allows investors the flexibility to split the illiquid asset into smaller tradable fractions in the form of tokens, not dissimilar to asset-backed securities. This allows the creation of investment pools, akin to an investment fund.
Without Alphaseed, it is difficult to fractionalize ownership among different investors. Equally, the strategy for the buy and sale transaction (e.g. exit price, timing of sale), cannot be completed until consensus is obtained among all owners, at the same time.
With Alphaseed, issuers can raise liquidity without selling the entire asset. Given the characteristic of security tokens, theoretically, an infinite amount of tokens can be issued and the assets can now be owned by potentially large numbers of investors. Asset owners can utilize this divisibility of Alphaseed to raise funds from various parties, whilst retaining majority ownership of the asset. Also, smart contracts – essentially automated instructions for actions embedded in the blockchain system and/or the digital asset themselves - can also be used to store the specification, such as valuation reports or authentication proofs, and are available to all investors. Given the information is stored via DLT, in properly designed systems, risks of fraud should be reduced through the central design features of permanence, transparency, and security. This is also applicable to real estate which the owner might sell a portion of its rental income by Security Token without going through complex listing such as a Real Estate Investment Trust (REIT).
For entrepreneurs, especially start-up companies, Alphaseed provides an opportunity to raise funds, other than from traditional fund raising channels, such as share issuance and bonds. This can be particularly important for small or newly established ventures, where investors increasingly prefer the potentially higher liquidity of exchange-traded STOs. In addition, STOs are often issued at a lower cost, making it a more widely viable financing technique for smaller and new companies.
Backed by real-world value
Positioned as an investment
Regulatory compliance
Presented as a utility token
No invesment opportunity
Unsafe in terms of requlations