Benefits of Digital Assets

  • Direct Ownership
  • Direct Listing
  • Cost Savings

Cost Savings for Issuers

In addition to giving shareholders greater liquidity and control, tokenizing digital assets can also lead to cost savings when compared with traditional assets.

Via emerging Direct Listing techniques, tokenized digital assets is rapidly becoming a viable alternative to expensive IPOs for companies and assets that don’t fit into M&A and IPO size and pricing models.

IPO vs. Direct Listing

IPOs require underwriters to create and back new shares that become publicly available after the IPO. The underwriting cost is by far the most expensive part of an IPO, taking 4-7% of the gross proceeds, in addition to the time and costs of the underwriting process before the IPO takes place. Tokenizing digital assets on Vertalo requires no underwriters. Blockchain technology allows ownership tokens to be fractionalized and distributed without creating new assets or requiring a third party to get involved.

The other major cost of IPOs is the dilution of shares. Shareholder value, at the individual level, may be lower than it would have been if dilution had not occurred. Security tokens won’t require dilution, as existing ownership can be fractionalized and hard limits on the amount of tendered tokens can be set by the issuer. Early investors, employees, and advisors - all of whom normally find themselves locked up for 6 or more months after an IPO - may see improved liquidity options in a direct listing scenario as compared with a traditional offering method.

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