USE CASE
Involved parties
An open-source and secure blockchain infrastructure that businesses use to tokenize financial instruments and automate costly processes.
The shares exist mostly in paper form and thus cannot be transferred digitally. The current situation limits and obstructs the transferability of ownership and trade. In order to facilitate trade, current paper based shares have to be digitalized and associated with the current holder.
Most steps in an incorporation process are executed on paper and involve multiple stakeholders. There are still recurring problems in keeping track of who owns company equity. For smaller companies that aren't publicly listed, paying out dividends and organizing shareholder votes can be next to impossible.
As many smaller companies aren't publicly listed on exchanges, trades that take place in the secondary market happen privately. Even when they are recorded, they usually use a different notary which makes it hard to create and maintain a single source of truth.
The shares in the shareholder register of FIRM24 will be tokenized. Tokenization is the digitalization of the shares, where each token represents ownership of a specific share. Hence, the tokenisation enables the storage and transfer of ownership of the shares in the shareholder register.
LTO Network deploys Live Contracts that interface between Dusk Network and Firm24 to coordinate on-chain logic and off-chain instructions and take care of all of the procedures that require notary approval.
Data that is shared by the parties involved using the systems connected to LTO Network. All the information regarding a specific share is displayed in the shareholder registry, For example, a new secondary market for investors to trade shares can be created, which displays all the information in one place and thus makes it easier for companies to monitor who owns their shares.
By digitising the shareholder registry, companies and shareholders are not dependent on paper anymore. Tasks such paper-based trade, or involving an additional notary to sign off the trade, belongs to the past. The transfer of any registered share can be directly performed digitally. LTO Network allows the trade to happen on the blockchain, which reduces costs and time to execute trade.
With LTO Network, you don't have to change your entire IT infrastructure. You can use your existing systems and applications to administer, record, and communicate with LTO Network. The implementation of LTO Network is as simple as connecting an API.
LTO Network is a fully decentralized and highly efficient blockchain infrastructure that is easy to integrate in existing systems, such as the FIRM24 system, that brings efficiency and is production-ready. Blockchain ensures data integrity of the digitalised shares and immutability following from the devices.
The data regarding the shareholder registry is shared through the LTO Network among multiple parties, which reduces time, costs, and improves efficiency.
Current shares exist mainly in paper form. Hence, the trades and any shareholder information might be unknown for the issuer. Thus, paying out dividends and organizing shareholder votes can be next to impossible.
Using blockchain to streamline the shareholder registry leads to higher productivity.
Currently, not every shareholder can be identified which hinders full automation.
Demonstrating compliance and transparency throughout the entire procedure by anchoring the tokenized shareholder registry and the corresponding steps.
Trades that take place in the secondary market happen privately. The trade is often not even recorded or a different notary is used.
The collaboration with Firm24 and LTO is a great example of how Dusk is being adopted nationally. I fully expect the benefits we realize here to function as a lighthouse project towards additional sectors and jurisdictions adopting Dusk Network.
