TokenSoft is using its tech to tokenize its equity, announcing Wednesday that it distributed tokens to investors that represent the proceeds from its July 2018 seed round, when it brought in $4 million.
Investors received a token representing their investment in another TokenSoft product – the recently launched self-managed investment account. The TSFT token was built using ERC-1404, an Ethereum token standard. But this doesn't change any of the investment agreements made at the time of the round; it's just digitized the representation of equity, according to CEO Mason Borda.
Tokenizing equity allows for real-time payment of dividends, and integration with Signature Bank's blockchain-based payments platform Signet means those dividends come in the form of U.S. dollars. It also means that investors can opt for a dividend payout through traditional banks if they're so inclined.
Outside of quicker payouts, tokenized equity opens up the possibility of buying and selling additional Tokensoft shares on the platform.
"This is a broker-style experience where investors can log in their investment account and they can interact with their equities on the blockchain, just like they would at Fidelity or E-Trade," said Borda.
The firm is putting their vision into practice with their own equity, with plans to test features like real-time dividends and the use of the platform for investor communications.
"You can think of this as sort of our way of doing a little bit of R&D ahead of the customer just to see what new innovations that we can create and bring to the market," said Borda.