The Fluidity Stack: Bringing Added Liquidity to Digital Assets
Technology

The Fluidity Stack: Bringing Added Liquidity to Digital Assets

In a recent publication, the team behind Fluidity explained the thought behind their latest development: The Fluidity Stack. Through several core components, Fluidity aims to bring added liquidity to every asset class possible.


How the Fluidity Stack Brings Added Liquidity to Security Tokens

The Fluidity Stack is comprised of three core elements: compliance, token structure, and servicing and reporting. With these three priorities in mind, Fluidity aims to bring added liquidity to the digital asset marketplace.

The three main elements of ‘The Fluidity Stack’

Within Fluidity’s structure, all participants have access to the same information. The transparency seen here is designed to produce liquidity. With a properly constructed token structure, the end result aims at the emergence of liquid secondary markets.

Liquidity has become a major focus for Fluidity. In October 2018, Fluidity announced a partnership with Propellr, an end-to-end securities platform with a focus on security tokens. Fluidity and Propellr teamed-up to introduce The Two Token Waterfall framework, which aims to replicate the financial stack of traditional private securities transactions, with optimized liquidity.

Eventually, Fluidity wants to bring forth a tokenization structure that will improve the trading, settling, reconciling, servicing, and reporting for every asset class. They feel as though Distributed Ledger Technology (DLT) will reduce middlemen and costs that currently weigh down the traditional financial securities realm.

In fact, Fluidity is behind one of the major applications in the young security token industry.

The Real-World Implementation of Security Tokens Explained

In early October 2018, Fluidity announced the tokenization of a luxury condo development in Manhattan, valued at $30 million. The offering— which Propellr was also a part of— was conducted via Regulation D Rule 506(c). It was the first tokenized offering in Manhattan— a city which had $1.74 trillion worth of developable land in 2014.

Other areas of finance have also experienced tokenization: REITs, investment funds, and equity have all experienced the benefits of security tokens. Harbor’s CEO Josh Stein has even noted that professional sports teams have expressed interest in tokenizing ownership.

Developments such as The Fluidity Stack can only add to the increased implementation of tokenizing real-world assets.

What do you think of The Fluidity Stack? Will such developments provide the added liquidity that the security token industry needs? Let us know what you think in the comments section below.


Image courtesy of Fluidity.

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December 9, 2018

About Author

GaryStevens Gary Stevens is a full time developer based in Canada. He's an early bitcoin investor and loves everything open source. Gary believes in a decentralized future and has worked with a number of corporate clients helping them understand blockchain technology and innovation.