First Digital Share Transaction executed by Tokenestate

Tokenestate SA, a company headquartered in Geneva, announced that it executed the first equity transaction using blockchain-based digital assets. The sale was executed on the Tokenestate platform, available as Software-as-a-Service (SaaS) enabling the compliant issuance and management of digital securities on the Ethereum blockchain.

The transaction consisted in a movement of blockchain-based digital assets representing Tokenestate SA shares from the seller’s to the buyer’s Ethereum address, in exchange for a payment in Swiss Francs. Tokenestate released on its website details on the transaction and a video of the platform (see below).

The Swiss startup is leveraging blockchain-based digital securities to make investing cheaper, faster and simpler. It allows private companies and real estate asset managers to efficiently manage digital securities, regulatory requirements and investor relationships.

In addition to digital security issuance services, the Tokenestate Platform provides a complete solution for managing investors. “Issuing a digital security  is only the start. The real value is enabling private issuers to manage large numbers of investors in a user-friendly way. We’re digitizing all key processes, for example compliance with prospectus exemptions, pre-emption rights or casting votes during general assemblies, which make it possible.”

More than a year of coordinated efforts

To achieve this, Vincent Trouche, Tokenestate CEO explains that the company worked on 3 factors: the legal, the technical and the user experience.

Due to their relative novelty, issuing digital shares requires an extensive and time consuming legal analysis. The company conducted this analysis with the help of Florian Ducommun, Partner at HDC Legal, who has extensive experience on the subject matter.

On the technical side, for the transaction to be valid, the startup developed a number of software components, such as an Ethereum smart contract, private databases hosted in Switzerland, and a front end component. The company has been conducting and refining such developments over the past year.

Lastly, Tokenestate enables investors to transact in a user friendly way as it is of the utmost importance to ensure that the solution can be used by non-specialists, and is easy to use. 

Market potential is significant

The potential of Tokenestate is significant as Vincent Trouche explains. Today, there are over 600’000 SMEs in Switzerland. Yet only about ~200 companies are listed on the SIX stock exchange, because it is very expensive to go public. Most companies are private companies. They don’t have the tools needed to efficiently raise capital, or organize the buying and selling of their shares on the secondary market. Such operations are time-consuming, costly and inefficient. As a result, private companies typically accept only a very limited number of investors, and have access to a limited pool of capital.  With Tokenestate, private companies in Switzerland have access to a simple, cost efficient, solution to manage their shares. Swiss private companies can now easily bring liquidity to their equity, which means that they are better valued and have access to a larger pool of capital.

A busy 2019 coming

Speaking of the future, Vincent Trouche expects a busy year in 2019. The startup will launch several digital securities in the coming months. Following the recent announcement made, the startup has been contacted by many different companies, in Switzerland and abroad. This being said, the startup led by Vincent Trouche is still open to discussions with strong Swiss companies, which have a track record and willing to raise capital by issuing their own digital security in Q1/2 2019.

(ES)