Starting from November 27thth In 2018, Harbor collaborated with Convexity Properties to strengthen the ownership of a luxury property located in South Carolina. The offer, available to accredited US-based investors, aims to raise $ 20 million through revolutionary benefits offered through tokenization.
The implementation of the real world of blockchain technology has once again hit the security token industry.
US investors can now own a piece of "The Hub", a luxury student residence located in South Carolina, through the form of a token.
The Hub, pictured above, is owned by Convexity Properties. They collaborated with Harbor to successfully launch the tokenization of property ownership. The agreement made history as the first tokenised REIT in the United States.
Details on The Hub's Tokenization are explained
The offer aims to raise a total of $ 20 million by selling 955 shares, with one share per chip, priced at $ 21k per token.
Don Wilson, CEO of Convexity Properties, said that tokens will be entitled to a 5% dividend. The tokens will eventually be available for exchange through compliant security token exchanges.
Harbor is the tokenisation team behind the first such offer. Harbor's R-Token is an ERC-20 compatible security token standard that is used for commercial real estate and investment funds.
Josh Stein is the CEO of Harbor. He says that tokenization offers a superior process compared to traditional methods of financial security. The blockchain eliminates brokers and has much lower transaction fees.
Revolutionary technology provides additional liquidity as trades operate 24 hours a day, seven days a week, 365 days a year. These operating conditions differ drastically from the conventional platforms in which the securities are traded: the stock exchanges. The New York Stock Exchange (NYSE), for example, operates from Monday to Friday, from 9:30 am to 4:00 pm, excluding nine holidays during the year.
Furthermore, fractional ownership, seen through the tokenisation of The Hub, increases the pool of available investors of the company, while allowing the company to maintain a private status.
For example, an offer like Convexity could generally be sold to 10 or 15 investors. But with the Harbor platform, the agreement is open to up to 2,000 investors who can participate in the offer. Anything bigger than 2000 investors would require the company to become public.
Overall, Stein states that the tokenisation of securities demonstrates an inevitable development of technology:
"Think of it as the transition from ordinary mail to email in offices over the years." The content was the same, but the digital format made it faster, cheaper, and easier to send. "
How security tokens are already witnessing the implementation of the real world
The luxury property in South Carolina is not the only example of the most recent blockchain revolution.
Tokenisation has achieved luxury properties in both Colorado and Manhattan, investment funds, stocks, even ownership of a Picasso painting. In fact, Josh Stein has previously stated that professional sports teams have expressed interest in the tokenisation of property.
The recent activity of the SEC seems to have gone beyond fraud, aiming at violations of the titles. The founder of EtherDelta was tasked with managing an unregistered stock exchange. The SEC has recently imposed its first ever sanctions for violations of the registration of ICO titles.
The business has pushed some companies to cancel ICOs and to turn to security token (STO) offers for regulatory reasons. The reasoning is simple: security tokens are not afraid when it comes to regulatory requirements.
As Stein explained, security tokens involve the tokenization of pre-existing financial security. This security was subject to securities laws and regulations long before blockchain technology arrived. If existing securities laws can be applied transparently and algorithmically through programmable smart contracts, security tokens have nothing to fear when it comes to legislation.
The situation has led some to foresee the security token industry to overcome the entire limit of the cryptocurrency market – with Bitcoin included.
If such a prediction becomes a reality or not, it must still be seen.
What do you think about the tokenization of "The Hub" in South Carolina? What does this say about the evolution of the security token industry? We want to know what you think in the comments below.
Image courtesy of Fortune.