The tokenization of real-world assets like real estate, private investment funds, private company equity, and fine art can help unlock liquidity and transform capital formation for trillions of dollars of traditionally illiquid assets.
Token relayer 0x and token compliance platform Harbor announced partnering up and will work together to optimize interoperability between the standards-based 0x platform and the Harbor compliance protocol — critical layers in the tokenized security stack — to help facilitate compliant trading through the 0x relayer ecosystem. 0x is enabling the exchange of tokenized securities by providing developers an open protocol to build on.
The 0x protocol lowers the cost of trading and enhances security as it is not a centralized third party that holds funds. It does this by lowering the barrier to entry for “relayers” to build on top of the protocol and allows trading for all generalized token standards. There are a growing number of relayers already on the platform and a large volume of liquidity has been amassed.
Many relayers in the 0x ecosystem — like The Ocean and Paradex — are planning to support the trading of tokenized securities. Some have already obtained the appropriate regulatory licenses and others are in the process of obtaining licensure. Soon, there will be a vibrant ecosystem of regulated exchanges providing compliant trading of security tokens, optimizing different services for different parts of the market and yet potentially sharing one worldwide order book, all enabled by the 0x protocol.
Harbor provides a compliance platform that ensures tokenized securities meet regulatory requirements on issuance and secondary trades, both peer-to-peer and across multiple exchanges simultaneously. The Harbor solution of centralizing compliance and decentralizing all other aspects of liquidity allows issuers to let their security tokens trade on multiple exchanges worldwide and be confident trading restrictions are enforced. Both 0x and Harbor are building on the Ethereum blockchain using open standards to enable interoperability with the growing ecosystem of wallets, custodians, trading platforms, and related services.
“We are excited by 0x’s vision of liquidity 24/7/365, around the globe across multiple exchanges, with near instantaneous settlement and no counterparty risk. The blockchain — and only the blockchain — can deliver that vision. Harbor is an integral compliance layer that enables this transformation of liquidity. Issuers can now allow their tokenized securities to trade to the limit of their liquidity across multiple exchanges, confident that Harbor is enforcing their compliance requirements on every trade.”
Harbor provides a security token issuance platform and a compliance protocol based on its ERC-20-compatible Regulated-Token (R-Token) standard, which automatically bakes compliance into a token issuance and subsequent secondary trading. The process of taking a traditional asset, such as real estate, securitizing it, tokenizing it, and trading those security tokens requires interactions between a few different layers of the blockchain technology stack. Harbor’s automated compliance and the free, trustless trade execution and settlement from the 0x protocol, means this process will be more efficient and accessible.
“It is fascinating to see the 0x protocol and the Harbor R-token standard combined to establish more liquid and efficient markets for alternative assets. We believe this emerging security token technology stack has the potential to unlock an incredible amount of value.”
0x is also announcing the addition of David Sacks to its advisory board. David was the COO and product leader of PayPal, the founder, and CEO of Yammer (acquired by Microsoft), co-founder of Harbor and co-founder and General Partner at Craft Ventures. Craft has invested in tangential projects in the blockchain space including Rare Bits and Set protocol, in addition to incubating Harbor.
Sacks commented, “0x is an important and critical component in what will ultimately be a global market for tokenized assets and many forms of value. Together, 0x and Harbor provide critical, complementary layers in the security token stack to facilitate this tremendous market opportunity.”
David’s operational expertise, business acumen and focus in the tokenized securities space will help guide 0x towards its mission of creating a tokenized world where all value can flow freely.