Investors are advised to diversify their portfolios with various asset classes. Different financial assets offer different characteristics in terms of liquidity, risks, cash flows, tradability, and together make a portfolio well-balanced. However, investing across asset classes—conventional (stocks, bonds, gold) or alternative (hedge funds, collectables)—remains a challenge if the size of your transaction is very small. For example, a share in Apple Inc. today costs $157, which makes it impossible for an investor with just $50 to own it at this point. Not anymore!
Based on blockchain technology, LAToken platform allows investors to buy and sell assets like equities, debt, real estate, metal, and works of art in "fractions" by tokenizing them. (See also: How Ethereum Blockchain Can Solve Your Social Media Privacy Problem)
The project intends to unlock these global assets, which are valued at $517 trillion, by allowing investors to purchase them at LAT Exchange at minimal transaction costs and maximum transparency and security using Liquid Asset Token (LAT).
“The LAT Transactions Blockchain is based on EOS vision of DPOS technology with 10-second blocks, TaPoS-technology that allows to know the state of every user by transactions, and offers direct internal references with asset Blockchain objects” as per the White Paper.
By allowing buying, selling and management of an investor’s portfolio on its blockchain and Artificial Intelligence (AI) powered platform, the LAT exchange makes investing not just faster, but also safer.
The working of the LAT Exchange involves buying liquid asset-backed tokens (LABT), which are backed by publicly traded assets (such as shares, bonds), to sell later at a pre-determined settlement date. The buy and sell process thus involves LABT and LATokens. Investors would need to buy the LABT on the LAT exchange at the time of auction using LATokens, and on the settlement date, the reverse process (i.e. LAToken buys back LABT from investors) is done at the current market price of the underlying asset. (See also: Bitcoin's Price Crosses $4,000)
"We have just launched equity trades of Apple stocks at LAT Exchange, the first stock exchange on blockchain that allows its clients to sell and buy securities and real assets worth $600 trillion using cryptocurrency. Within weeks we'll list new asset classes, ranging from real estate to works of art at LAT Exchange, enabling maximum diversification for crypto investors," said Valentin Preobrazhensky, CEO at LAToken.
The token sale (LAT) is set to start on August 22, 2017. It will last for 2 months and will be completed in four rounds; Round 1 – Equity, Round 2 – Real Estate, Round 3 – Debt and Commodities, Round 4 – Illiquid assets (e.g. collectables, work of art).
Overall, in some ways, the working on the LAToken platform replicates the process of a forward contract on a stock exchange. However, the LAT exchange reduces transaction costs and lowers the barriers to entry on such contracts which traditional involve lot size and value limitation.
With estimates that the turnover of asset-backed tokens may exceed $1 trillion by 2025, LAT may be the next cryptocurrency to emerge in popularity driven by its usability on the platform.
The LAT Exchange will follow KYC and AML rules and apply for exchange license where needed.