Digital Assets AG Launching Stock Tokens on Solana

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In Brief
  • Digital Assets AG is launching tokenized stocks on the Solana Blockchain, which will be exclusively available though crypto exchange FTX.

  • Binance had previously launched DAAD stock tokens, but now they will be tradeable across the Solana ecosystem.

  • The Financial Market Authority (FMA) of Liechtenstein endorsed a securities' prospectus, making the DAAG tokens valid for trading in the EEA.

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Digital Assets AG is launching tokenized stocks on the Solana Blockchain, which will be exclusively available through crypto exchange FTX.

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Digital Assets AG (DAAG) is based in Switzerland and specializes in designing and issuing tokenized financial instruments. It is now bringing its tokenized stock infrastructure to the Solana blockchain. During this initial debut, DAAG will also launch the free-floating security tokens exclusively on crypto exchange FTX. This will allow for the risk-free, compliant transfer of tokenized stocks.

According to Brandon Williams, Corporate Development Lead at DAAG, “operating on Solana will offer a much more efficient, and cost-effective environment for the trading and utilization of tokenized stocks.”

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Secondary-market stock token trading

In April, Binance became the first major exchange to offer stock tokens, in partnership with DAAG. Binance inaugurated its stock token offerings with Tesla, but later added MicroStrategy, Microsoft and Apple to its portfolio. However, these stock tokens are limited to being traded on Binance exclusively, with users only able to open or close positions. This restricts their ability to make withdrawals, or transfer cross-chain or to an external party. 

But now, DAAG has also launched free-floating tokenized stocks on Solana. This means that users can now trade these tokens between different centralized and decentralized exchanges built on the Solana blockchain. Sam Bankman-Fried, founder and CEO of FTX said that this could set a new standard and “help facilitate a paradigm shift in the underlying market structure.” 

Regulatory approval

Initially, these stock tokens will be exclusively available on crypto exchange FTX to KYC’d buyers and sellers in permitted jurisdictions. Users will be able to buy, sell and withdraw the 55 free-floating stocks in a 24/7/365 trading cycle. These will include stock tokens for Facebook, Google, Netflix, Nvidia, PayPal, Square and Tesla. Users will also be able to make transfers to secondary markets without restriction, with near-instantaneous settlement and no counterparty risk.

These free-floating tokens are regulatory-approved security tokens that can be used for tokenized stock trading. Each stock token is worth one share of stock, backed by a corresponding share in a portfolio of underlying securities. Previously, there had been some issue with Binance’s stock tokens, about whether they required a securities’ prospectus. However, in this instance the Financial Market Authority (FMA) of Liechtenstein endorsed a securities’ prospectus, making DAAG Tokenized Stocks valid in the European Economic Area (EEA).

Disclaimer

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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