Tag: Sto

CITD and XBE Pioneer Innovation with Launch of World’s First DOT Standard 3+2 STO and NSTO

by Blockchain News

China Information Technology Development Limited (CITD) and Xtreme Business Enterprises (XBE) have announced the successful launch of the world’s first Digital Ownership Token (DOT) Standard 3+2 Security Token Offering (STO) and Non-Security Token Offering (NSTO). This marks a significant milestone in the evolution of blockchain assets and the development of Web 5.

CITD, a leading technology company specializing in AI and cloud technologies, and XBE, a pioneer in Web 3 and blockchain assets, have aligned their efforts with China’s 14th Five-Year Plan and Hong Kong’s vision of becoming an international innovation and technology hub. The government has introduced measures to foster the growth of Web 3, blockchain assets, and smart city initiatives, responding to the rising demand for digital ownership verification.

XBE’s DOT Standard 3+2 STO and NSTO leverage XBE’s proprietary DOT technology. Unlike conventional digital tokens, XBE’s DOT employs blockchain technology specifically designed to authenticate legal documents and smart contracts, providing legally enforceable ownership of tangible and intangible assets via tokenization. The versatility of DOTs allows their application across various sectors, including intellectual property, real estate, memberships, and more.

The DOT Standard 3+2 STO uses the DOT standard to record bond documents and corresponding smart contracts into the Bond Security Token. This allows token holders to directly hold and control their own assets, enhancing the certainty, security, efficiency, and transparency of security tokens. It also eliminates the need for a third-party custodian and complex trust structures, mitigating risks often found in the traditional securities market.

In collaboration with Petaverse, CITD and XBE have also launched the Non-Security Token Offering (NSTO). Petaverse is a virtual pet metaverse where individuals can own unique virtual pets and engage in interactive play. The NSTO aims to build a global community of pet enthusiasts, connecting pet lovers from around the world and fostering a supportive community.

Dr. Herbert Lee, Founder and Chairman of XBE, commented, “We are excited to utilize the DOT standard for STOs, demonstrating the versatility of our DOT technology across various assets and industries.” Mr. Daniel Wong, Chairman and CEO of CITD, added, “The utilization of blockchain technology in place of traditional documentation for bond issuance showcases our ability to fully adopt blockchain and smart contract technologies through the DOT standard STO and NSTO.”

In the past, CITD has shown its commitment to leveraging blockchain technology for innovative solutions. In a notable event, CITD announced its plan to issue HK$100 million worth of Bonds using distributed ledger technology (DLT). The Bonds, with a maturity date set for June 27, 2053, were documented using the Digital Ownership Token (DOT) standard and implemented through a binding Ricardian Contract. This approach allowed investors to directly hold and control their own securities, eliminating the need for a third-party custodian.

The use of the DOT standard in the Bond Security Token set a new precedent in the bond market, offering enhanced security and transparency compared to traditional paper-based bond offerings. The tokenization of debt instruments using DOTs enabled a clear record of ownership and simplified the transferability of securities. Additionally, the elimination of third-party custodians reduced risks associated with securities custody.

CITD’s decision to embrace DLT and the DOT standard aligned with its strategic vision for the development of Web3.0 and blockchain business. As the Hong Kong government actively supports the growth of Web3.0 and decentralized finance (DeFi) industries, CITD aimed to leverage its expertise in digital transformation to pioneer innovative solutions in various sectors, including finance, healthcare, and logistics.

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MELD’s $1B ISPO highlights emerging use cases for Cardano, crypto fundraising

by Cointelegraph

DeFi banking protocol MELD recently made headlines for attracting more than $1 billion worth of staked Cardano (ADA) to its protocol through a novel funding mechanism called an initial stake pool offering, or ISPO, marking an important innovation in how early adopters support blockchain startups. Cointelegraph had the opportunity to connect with MELD CEO Ken Olling to discuss the significance of the ISPO as well as Cardano’s role in facilitating widescale participation in the stake pools. 

ISPO: An overview

The ISPO is a novel way for investors and other early adopters to support a project by delegating cryptocurrency to public stake pools in exchange for the project’s tokens. MELD is currently the only known project to employ an ISPO even though the concept had been previously proposed elsewhere. 

The MELD ISPO, which was initiated on July 1, allowed Cardano holders to stake their ADA for any duration and quantity in exchange for MELD tokens. The first stake pool was filled within 24 hours after roughly $100 million worth of ADA was contributed. Within five days, four stake pools equivalent to nearly $200 million were filled.

MELD stopped accepting new delegations on Oct. 27. By that time, nearly 620 million ADA had been staked for a cumulative value of over $1 billion. All said, the ISPO had over 40,000 participants. MELD also raked in $10 million in revenue.

The ISPO was a significant departure from previous crypto funding initiatives, most notably the initial coin offering (ICO) and security token offering (STO), and was a nod to Cardano’s growing ecosystem. It also highlighted pent-up demand in the market for DeFi projects, which continue to pique investors’ interest.

Blockchain projects raised billions of dollars in funding in 2017 and 2018 before regulatory crackdowns and a brutal crypto bear market put an end to the mania. Source: 3TS Capital

Why Cardano?

Of all the proof-of-stake (PoS) chains in existence, MELD selected Cardano for its ISPO for its lower transaction costs, attractive staking mechanism and overall architecture, according to CEO Ken Olling. During MELD’s initial development phase in mid-2020, Cardano was perceived to be the best option considering the circumstances surrounding Ethereum (ETH) at the time.

“There aren’t any more established blockchains,” Olling told Cointelegraph, adding:

“One of our requirements was a modern PoS blockchain. The only real option at the time was Cardano. You have Solana, which has a two-tiered, much more complex staking mechanic in regards to the blockchain. It also operates legally in a different way. And then you have other PoS blockchains, but none of them really provided the full picture or the full package.”

Related: How Solana and Cardano are paving new avenues for NFT growth

Olling said his firm is still “very bullish” about Cardano’s future despite its recent struggles. ADA’s performance has lagged considerably in recent months after being one of the crypto market’s hottest performers through September.

Achieving financial efficiency

At its core, MELD offers non-custodial banking services, enabling users to lend and borrow with both crypto and fiat currencies as well as stake their MELD tokens for interest. Lenders can deposit both cryptocurrency and fiat currency on the platform. Borrowers have the ability to borrow in both types of assets after posting their crypto as collateral. 

The crypto collateral option is attractive for investors because it means they can borrow fiat to meet their expenses without having to sell their digital assets and thus incur a capital gains penalty. (Capital gains taxes are a source of consternation for cryptocurrency investors, with large bag holders always looking for ways to use their newfound wealth in the most efficient way possible.)

When asked about what differentiates MELD from other crypto lending and borrowing platforms, Olling identified two factors: first, “on the highest level, we offer transparency,” he said. “It’s on the blockchain, so what happens with funds on the protocol is completely open-sourced, unlike centralized crypto lending and borrowing services.”

Secondly, and on a more practical level, MELD offers “users fiat currencies for their crypto-backed loans, whereas other […] DeFi competitors can only offer other cryptocurrencies.”

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Related: DeFi can be 100 times larger than today in 5 years

Cryptocurrency lending has emerged as one of the biggest use cases within DeFi, with the likes of Aave and Compound achieving over $14 billion and $11 billion in total value locked (TVL), respectively. More than two-dozen other protocols have achieved a TVL of at least $100 million, according to industry data. 

Although the emergence of DeFi has presented a sort of threat to the traditional financial system, the industry’s growth has been largely driven by users who already have access to legacy banking systems. That appears to be slowly changing as crypto entrepreneurs target the globe’s vast unbanked and underbanked populations in pursuit of financial inclusion. According to Olling, financial inclusion is a by-product of a more efficient financial system that is made possible through DeFi.