Analyst Jesus Rodriguez came out with another piece recently discussing what he calls “collateralized multi-asset security tokens.” The idea behind them is they would be dynamic crypto-securities similar to current collateralized debt obligations (CDOs) but much more transparent.
“The traditional model for security tokens typically generates a crypto-security correlated with assets owned by a specific entity,” Rodriguez writes. However, what if the underlying assets were moved and rearranged dynamically thereby influencing the price of the overarching security? This is the concept Rodriguez is posting with CMADS.
The difference between CMADS and regular single-asset tokenized securities respectively would be the following then:
Many issuing entities as opposed to one.
A dynamic number of assets over time as opposed to a static one.
Valuation is inferred and fluctuating as opposed to calculated during issuance.
The goal of CMADS would be lending, borrowing, and commerce whereas single-asset security tokens would be fundraising, digitizing assets.
Interestingly, Rodriguez also seems to be of the opinion that CMADS as a financial instrument would also be more liquid since the underlying assets would be ever-changing. Much of this dynamism would need to be “baked into” the token standard of the digital security.
Meet Tim. Tim is a co-founder of The Tokenist. Originally from Kalamazoo, Michigan, Tim is a mechanical engineer by training and has been investing his whole life. He started his career with GE in engineering and operations management where he held various leadership roles before leaving to pursue an MBA (he is a proud former co-chair of the Milton Friedman Group at Chicago Booth). After business school, Tim spent several years with Baird Capital where he made private equity investments in consumer and industrial companies. He left Baird to found Protective Technologies Capital in 2018, where he continues to make private equity investments in family businesses looking for help with succession planning. Tim lives in Chicago, where he enjoys watching Michigan football and basketball and traveling with his wife Kristen. Like Sia, he also likes telling jokes. However, his wife adamantly insists that he not share his “dad jokes” publicly so he reluctantly sticks to writing about finance and technology.