What does your company do? What is its place in the Security Token Offerings ecosystem?
SelfKey is a blockchain-powered identity management solution that provides a more secure and convenient way of verifying your identity online. Since 2017, we’ve been building an end-to-end ecosystem comprising the Identity Wallet, the Marketplace and Login with SelfKey (LWS) designed precisely for this reason.
The Identity Wallet is a desktop application; and allows you to manage your ERC20 tokens as well as create your SelfKey ID. It’s the home of the Marketplace and is your entry point to the SelfKey ecosystem. Next there is the SelfKey ID, which is a collection of data points that can ultimately be used to access Security Token Offerings much faster and more securely.
To illustrate this point, think back to all the times you registered with an STO, ICO or cryptocurrency exchange. Each time, you have to enter your personal details manually, confirm the email address and upload the required KYC documentation. It’s a really tedious process.
The SelfKey ID allows you to register with any integrated STO in just one click. This is a win-win, because users save time while platforms significantly increase the number of investors they successfully onboard to their STO. As I’m sure you’re aware, a large percentage of users who show significant intent, drop off before investing. A one-click registration process has a measurable, positive impact on a number of key metric.
Why did you turn your attention to STO? Can you make any predictions about the development of this industry?
Security Token Offerings are very attractive to us for a number of reasons. Most importantly, STOs value a secure and frictionless customer onboarding experience. When every website visitor is a potential investor, it is absolutely crucial that as many people as possible make it through the sign-up process.
SelfKey allows website visitors to sign up for an STO and provide the required KYC information with just one click. For STOs, this can make the difference between a successful and a failed token offering.
Predictions are notoriously hard to get right. That being said, the trajectory of the industry is positive. We’ve been working closely with the first licensed STOs in Germany and Bermuda, and recently we’ve seen the investment bank Societe Generale issue $112 million in bonds using the Ethereum blockchain. Clearly, regulators and institutions are exploring Security Token Offerings as a legitimate way of raising and issuing funds.
My prediction is that we will see a significant shift in the type of businesses that launch an STO. Whereas previously, cryptocurrency platforms dominated the space, I think non-crypto platforms will issue tokens as a preferred alternative to tedious and costly funding rounds.
What are the key features of your technology solution?
Two key features of the SelfKey Identity ecosystem are convenience and security. Using your SelfKey ID, you can access integrated service providers with the click of a button. In the SelfKey Marketplace, you can find a list of excellent service providers. Here you can not only register with lightning speed, but you can also see the service providers KYC requirements and applicable fees before joining.
SelfKey is also more secure than alternative solutions, because your data is stored only on your local device. In order to fall into the wrong hands, a malicious actor would have to gain access to your computer. Compare this to centralized systems which are constantly breached and hacked, with devastating consequences. At no point does SelfKey control or manage your information
Perhaps the most important feature however, is control. At SelfKey we are building an identity management solution that will give you control over your personal data. In the current system, you forfeit ownership every time you register for an online account. We believe that this way of operating is no longer tenable.
How universal is your solution in terms of legislation? Are there any limits?
Compliance is absolutely vital for us and imposes our only real limitation. We make sure that the STOs we work with are in close communication with regulators and take their compliance requirements seriously. Bitbond and tribeOS are two examples but there are many others.
Interestingly, regulators all over the world are exploring Security Token Offerings as a viable approach to raising capital. Therefore, I think the international compliance landscape will shift and become even more amenable in the years to come.
If you had the opportunity to tokenize any asset in the world, what would it be and why?
I think the two strongest use-cases for tokenization are bonds and real estate. In the case of bonds, the ability to instantly create a liquid secondary market while reducing fees through the use of blockchain technology is a very attractive proposition.
In the case of real estate, tokenization can remove the need for large capital investments, subsequently lowering the barrier to entry and allowing retail investors to participate for the first time in history. This can be achieved by issuing non-fungible tokens representing partial ownership of a given property.
Finally, it’s worth mentioning the tokenization of identity as well. I think we’ve still got some work ahead of us, but this is a space with a huge amount of potential.
Chris Grundy is a Director of Marketing at SelfKey. Chris is an avid tech enthusiast and the Director of Marketing at SelfKey. He’s been writing about the Blockchain space since 2015 and has enjoyed every minute of it.