Digital Securities: Secondary Venues & Decentralized Exchanges
Author: Vlad Estoup
For digital securities research and market data, visit research.atlasone.ca
By digitizing private securities, issuers can offer investors a clear path to liquidity.
While some of the largest secondary trading venues are run by private enterprises, digital securities trading also takes place on decentralized exchanges.
The lack of liquidity in private markets makes digital securities highly appealing to investors.
The current leader in trading volume for digital securities is tZERO’s ATS, with an average daily volume of $366,277 across its three listed securities: tZERO, Overstock and Aspencoin. Below is a breakdown of the trading volume on tZERO’s ATS over the course of 2021:
A close second is Uniswap, where RealT’s real estate digital securities trade. The average daily volume of RealT securities traded on Uniswap is $7,731.
AirSwap has also seen some trading activity when it comes to Blockchain Capital’s token BCAP. 9 trades took place on AirSwap, with an average volume of $19,550 per trade.
An important aspect of decentralized trading is the exchange’s ability to recognize which wallets are allowed to hold the security. In other words, whitelisting capabilities are an important feature that is not yet embedded into token exchanges such as Uniswap and PancakeSwap. These decentralized exchanges are built for trading of utility tokens, rather than regulated securities. As a result, they are not yet robust enough to handle the regulatory must haves of securities trading — particularly AML/KYC requirements.
Here are the top 3 digital securities exchanges:
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