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The Impact of Security Tokens On Commodities Trading

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Marketing / Blog

The Impact of Security Tokens On Commodities Trading


By Eli_Weir

Created a month ago, last updated a month ago
3 mins read
The Impact of Security Tokens On Commodities Trading

Table of Contents

Enegra is proud to be one of the world’s first companies to offer equity-backed, regulatory-compliant, security tokens to investors. Enegra is an international coal, nickel, and commodities trading company based in Malaysia, with subsidiaries in Singapore and Indonesia. The company was founded in 2011, to deliver operational expertise to the mining industry in Southeast Asia.
In 2019 Enegra tokenized 100% of the equity in Enegra Group Ltd, with beneficial ownership now represented by the ERC-3643 compliant EGX security token. Originally issued on Ethereum, EGX was migrated to the Polygon blockchain in 2021, and is currently listed and trading the XT, BigOne, and Biconomy centralised exchanges (CEX). Enegra plans to also list EGX on an additional two CEX and six decentralised exchanges (DEX), as well as several over-the-counter (OTC) markets, in Q3 of 2022.

Enegra is now preparing to release its innovative Enegra Offtake Agreement (EOTA) debt-backed security tokens onto the market, allowing for anyone to participate in the trade-finance of commodities and earn a fixed income from their EOTA tokens. There will also be a convertible option that allows for the exchange of EOTA for EGX.

Tokenization provides various advantages for the company and its stakeholders:

Improved Compliance

EGX and EOTA use the ERC-3643 standard for permissioned tokens (formerly T-REX), which allows for the issuance and transfer of tokens in a compliant manner. The compliance contract attached to the tokens ensures that any transfer is compliant prior to execution, rather than after. For example, all holders need to pass KYC/AML verification and have an ONCHAINID issued that links their profile data with their wallet address - which enables Enegra to report as needed to the regulator.

Increased Exposure

EGX and EOTA are available to anybody that passes the KYC/AML verification. This provides Enegra, as the issuers, with a global pool of capital and potential investors. Investors also benefit from the fractionalization of these larger assets and opportunities, formerly only available to institutional and accredited parties.

Increased Liquidity

Investors are able to trade 24x7 in multiple centralized and decentralized markets, OTC, and peer-to-peer. The fractionality of security tokens is also a major enabler of this near-term liquidity. In the near future, token-holders will also be able to stake their tokens for increased yield and even borrow against their tokens. This in turn leads to a greater pool of capital available for Enegra to use in financing commodity trades.

Transparency of transactions from miners to consumer

One of the major ways of scaling the commodities industry is maintaining high transparency of transactions. Blockchain provides a uniform method of verifying and tracking data which makes reporting and auditing much easier. Transactions of security tokens are easy, traced, verified, and tracked on the blockchain thereby reducing the occurrence of frauds, errors, and losses.

Other impacts of security tokens on commodity trading include scalability, efficiency, accuracy, simplified auditing processes, reduced paperwork, reduced reliance on third parties, lowered issuance fees, and many more.

Investors are able to create an account on the Enegra Investor Portal and qualify to hold EGX and EOTA in their self-custody wallet, at EGX is also available to buy today without qualification, on XT, BigOne, and Biconomy CEX.

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