Harbor recently created security tokens for four real-estate funds worth a hundred million dollars ($100M). The startup created tokens on the Ethereum network to represent the shares of the funds.
What is Harbor?
Harbor has been involved in assisting companies with issuing their security tokens. Now the company has shifted sights towards tokenizing already existing securities. Previously the company only helped in selling these security tokens. Now, however, it has moved towards developing infrastructure layers for such projects.
The purpose behind tokenizing these securities is to increase their liquidity. This move would make them easier to trade for more than one thousand investors that hold these securities. These include more than two dozen broker-dealers and placement agents that work with the funds’ manager.
The Company’s vision
The company’s CEO, Josh Stein, stated that the startup has grown “from crowdfunding and tokens to being the Salesforce.com” of the security token industry. The company started by issuing tokens backed by physical assets. The company believed that if people like the idea of initial coin offerings (ICO) that only gave a promise, they would love these backed tokens.
Expectation vs Reality
However, once the company started, it soon found out that there was almost zero correlation between people who demanded these tokens and investors who were interested in security tokens. According to Josh, the people that bought these tokens were not using them to invest but rather just speculate.
In 2018 Harbor had collaborated with DRW Holdings’ real estate department. Through the collaboration, the company conducted a sale of around one thousand tokenized shares of an apartment building. The deal fell apart this year as there were issues between the mortgage leader and the security issuer.
Many other real estates have already indulged in cryptocurrencies and blockchain. However, this is the first time any real estate funds have been tokenized.
