Articles on: Blockchain & Security Tokens

What are the benefits of security tokens?

We believe the future of capital markets is the tokenisation of real-world assets (RWA) using blockchain technology, and have a vision of a world in which equity issuance and security trading on the blockchain replaces out-dated traditional finance norms. This is why we have tokenised the equity of Enegra into the EGX security token on the Polygon network.

Benefits of security tokens

Increased liquidity. Security tokens can be traded 24/7 on multiple global exchanges, which allows for greater liquidity compared to traditional securities that are only traded during market hours.
Fractional ownership. Security tokens can be divided into smaller units, allowing for fractional ownership of assets that were previously inaccessible to individual investors. For example, EGX is divisible to 6 decimal places.
Lower transaction costs. The use of blockchain technology reduces transaction costs by eliminating the need for intermediaries such as brokers, custodians, and other financial institutions. Transaction "gas" fees on Polygon are cents or fraction of a cent.
Greater transparency. Blockchain technology provides a permanent and tamper-proof record of transactions, which increases transparency and reduces the potential for fraud. The public Polygon blockchain explorer PolygonScan allows anyone to view transactions and other information, whilst still not revealing confidential data.
Global accessibility. Security tokens can be traded globally, which opens up investment opportunities for investors who were previously unable to access certain assets.

Reasons to buy or hold security tokens

Diversification. Security tokens provide investors with a way to diversify their portfolio by investing in a variety of assets, such as real estate, fine art, and private equity.
Higher potential returns. Security tokens can offer higher potential returns compared to traditional securities, as they provide access to assets that may have previously been unavailable to individual investors.
Security. Security tokens are regulated by securities laws, which provides investors with a level of legal protection that may not be available with other forms of investment.
Lower minimum investment. Security tokens can be divided into smaller units, which allows investors to participate in asset ownership with lower minimum investments.
Future potential. As blockchain technology and security token markets continue to develop, there is potential for significant growth and increased adoption of security tokens.

EGX is available to buy today, allowing you to take advantage of this new paradigm!

Updated on: 23/08/2023

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