2021/03/14

2021/03/07

Is securitization the same as tokenization ?

The section below is a quote from https://drfazal.medium.com/from-securitization-to-tokenization-817d4b6ef759 . I have slightly changed the wording due to SEO duplicate content issues 

What is Securitization

"Assets with relatively stable cash flows and related characteristics are bundled into interest-bearing securities with marketable investment characteristics, which is known as securitization. ABS refers to the conversion of an illiquid asset into a tradable security, such as bonds or securities, which is more liquid than the underlying debt or receivables. Asset securitization will reduce risk, increase liquidity, and boost economic performance.

The securitization mechanism divides a bank's conventional position into many specialized roles, such as issuer, underwriter, rating agency, servicer, and, trustee. The issuer, also known as the sponsor or originator holds the collateral assets for the asset-backed security together. Since structured financing provides a convenient platform for financial institutions including banks, finance, and mortgage companies to sell their securities, issuers are often the debt originators of the pool of securitized properties.

Asset-backed security market tends to expand into new securitization deals ranging from gems to agricultural crops to venture capital that have arisen over the last few years, as this mechanism will cover any form of financial commodity and foster liquidity in the marketplace. In the future, investors anticipate even more groundbreaking offers."


Blockchains and Tokens 

"Any blockchain is inextricably tied to tokens or cryptocurrencies. A blockchain cannot be built without giving people incentives to create it, just as a decentralized type of token cannot survive without the protection provided by a blockchain. The reward is a decentralized token or cryptocurrency.

Token is a peer-to-peer digital wrapper that allows us to build, customize, and exchange any conceivable commodity without friction. To summarize, tokenization has the potential to streamline our current capital markets and allow us to build an environment where value can be transferred seamlessly. This may have far-reaching consequences for our economies in the future.

Tokenization not only allows us to build a digital envelope around any physical, digital, or intangible asset, but it also allows us to automate the trustless movement of digital assets by digitally enabling the performance of important contractual deliverables without the need for human intervention.

This means that conventional centralized securitization's trustworthy intermediaries, such as rating agencies, servicers, and trustees, are no longer needed, saving time, manpower, and costs."



2021/03/01

Where are we in the crypto cycle?

....Somewhere over the inflection point t(b1) 

Why? When big changes happen it always takes longer than you think ( t(A1)vs(B1)). 

But when it happens it happens much faster than you could ever imagine (t(AB2)



How ETH 2.0 pool staking works with Stakewise

This public post from a Discord moderator sums it up quite nicely: 

"it's very simple in the pool - you deposit ETH, which gets bundled with ETH we collect with other users and is sent to staking. You get the deposit token, sETH2, to represent your stake - you can move it around like you would move ETH, subject to integrations with other protocols (coming soon). As long as you hold sETH2, you will accrue rETH2, which represents your staking rewards. Both tokens are exchangeable back into ETH upon Phase 2, which is when you can withdraw from the pool. So it's simple: deposit ETH -> sit on your tokens -> withdraw in Phase 2. More about the tokens: they represent your staking deposit and accrued rewards, so if you transfer them somewhere else (via a swap transaction or simply send it), it means that you transfer your stake. The advantage of having tokens is being able to swap them for ETH via liquidity pools (coming very soon) before phase 2. Also, in the future, use your tokens as you would use ETH in various protocols, be it for borrowing more crypto, farming etc. Our tokens are uniquely positioned to help you extract the most yield from your capital, so you're in the right place." 

The APY formula works as follows: 

"the APY is based on the following formula: ETH in the Pool * % of activated ETH * network reward rate * (1-StakeWise commission) / ETH in the Pool. What this means is that rewards from existing (activated) validators are being shared with everyone who deposited (regardless of whether their ETH has been activated or not) - the implication is that when deposits grow strongly, APY goes down. We are working to avoid this by removing such socialization, meaning that APYs of our early stakers will be protected in the period of growth in ETH deposits that will follow."