Tokenization To Make $1 Trillion of VC Investments Liquid
TechnologyBit News Today2 min read
Vladimir Khanumyan, chairman of the board of directors of VNX Exchange, stated that when venture and private funds back startups, their capital remains locked up for several years until they exit the asset.
A new class of investment products will tokenize VC fund assets on the VNX Exchange, allowing token holders to convert them back into shares in the fund or company at any point. The tokens can be traded on the platform, and part of the profits are shared with all token holders when venture capital funds sell their stakes in portfolio companies to receive profit. According to the partners, this new solution should help eliminate the problem of insufficient liquidity of assets.
VNX Exchange is rolling out a European marketplace for digital assets designed to supply liquidity to the $620 billion worldwide venture capital sector. The company appointed Dominique Valschaerts, previously the chief executive of the Brussels Stock Exchange, to its board of directors. By establishing a protected and legally compliant exchange, VNX intends to lower hurdles for everyday participants and make venture capital accessible to a far wider international audience.
According to Tkachenko, these venture capital tokens resemble tokenized instruments such as bonds or futures, offering owners a portion of the earnings generated by the underlying portfolios sold through the platform. The process begins with a listing application from the inventory provider (such as a VC fund manager), which is evaluated by VNX along with designated third-party service providers. Once the auction concludes and initial tokens are distributed, they are added to the VNX List, accessible to the general public for free trading based on market prices. Part of these profits are then shared with all token holders as VC firms sell their stakes in portfolio companies.
Additionally, utilizing blockchain systems and tokenized assets helps decrease reliance on traditional middlemen, including clearing houses, share depositories, custodians, and transfer agents.
A private beta of the platform's second version is planned for release by late 2018, followed by a complete rollout in 2019 once all required regulatory clearances are obtained.
