Tokens.com: Streamlining Cryptocurrency Investing with Proof of Stake
The Cryptocurrency market can be intimidating to navigate for some investors who are used to buying and selling shares in more traditional publicly traded industries. There’s a whole new language to learn, a new technology to understand, and figuring out how to buy and store cryptocurrency can be daunting for the uninitiated. Combined with the short-term volatility of the crypto market over the last few years, and some investors are inclined to stay away from the space entirely, despite its massive potential for growth.
One company is attempting to remedy that situation, by taking the challenge and mystery out of investing in crypto. They’re offering a streamlined and accessible entry point to the market, openly inviting anxious investors to dip their toe into crypto by making investing in it as simple as buying traditional stocks.
Tokens.com (www.tokens.com, NEO Stock Exchange Canada: COIN), a blockchain technology company, is making the process of investing in crypto surprisingly easy, and potentially lucrative. Buy shares in the company, and you are essentially buying revenue-generating tokens that are used to ‘stake’ or validate Decentralized Financing (DeFi) applications on Blockchains like Ethereum 2.0. The process of staking powers and secures the blockchain, allowing DeFi, and the cryptocurrency industry as a whole to operate effectively and efficiently.
This business model requires Tokens.com to purchase the crypto tokens, and they have built a formidable inventory of them (Eth, Polkadot, BNB, and Rose) since the company’s inception in 2020. The tokens held by Tokens.com have appreciated considerably, over 75% in Q3 of 2021 alone. The company stakes its inventory to earn even more tokens, and in Q1 of 2021, the staking rewards were the equivalent to 58% annualized on their staked assets. The combination of a balance sheet full of tokens and crypto staking rewards provides investors with super charged exposure to crypto all within a public company.
Tokens.com co-founder and CEO Andrew Kiguel spent two decades in traditional investment banking before turning to cryptocurrency with his first successful crypto company Hut 8 Mining, where he was the initial CEO who built the business with Mike Novogratz from Galaxy Digital. Today, Hut 8 has a market capitalization of over $1 billion. Kiguel believes that by giving investors easy-to-understand access to a crypto game-changer like DeFi, the company is filling a gaping void in the cryptocurrency investment space, “Tokens.com solves this problem for the investor who wants to invest in crypto and do it through a publicly listed company. Every blockchain has to have a third party that validates the transactions. We are fulfilling that need in the marketplace”, says Kiguel.
So what exactly is DeFi, and how is it helping to mainstream the cryptocurrency industry? DeFi refers to the crypto-based automation of financial services like borrowing, lending and trading, that bypasses traditional financial institutions. Most importantly for investors, DeFi provides new tools to provide revenue and yield.
DeFi is the fastest growing subsection of cryptocurrency that – according to Kiguel – will likely do to the financial industry what Netflix did to television and Amazon did to retail shopping. “Wall Street and Silicon Valley are really excited about this. They’re saying [DeFi] is like how the Internet disrupted mail service, food delivery and retail shopping. This is going to be a similar disruption in financial services, which is a huge marketplace. As DeFi grows, and more transactions need to get processed, the need for people like us is growing.”
Staking, or Proof of Staking, is the process used by Tokens.com to validate cryptocurrency transactions on the Ethereum 2.0 blockchain, and ensure it maintains its integrity. It’s a next generation technology; and it’s taking the crypto world by storm. Staking involves purchasing tokens and using them as collateral to validate transactions. It’s a massive upgrade from the previous system of blockchain transaction validation, known as ‘Proof of Work’, which is done by crypto-miners, and has become outdated due to its massive energy consumption.
The Proof of Stake process improves processing speeds while decreasing the carbon footprint to something more sustainable. It requires 99% less energy than Proof of Work, while completing over 6000 times as many transactions per second, making it ideal for large DeFi transaction volumes.
The industry’s transition to Proof of Stake has caused JP Morgan – formerly staunchly anti-crypto – to do an about face. A recent report put out by the investment giant (www.cointelegraph.com/news/jpmorgan-report-eth2-could-kick-start-40b-staking-industry-by-2025) indicated that the Staking industry will balloon from $9 billion to $40 billion by 2025. Tokens.com is tapping into this burgeoning market by making money for its investors in two different ways: first by the revenue that’s generated by putting the tokens to work on the blockchain, and second, by the appreciation in the token inventory that the company holds.
According to Kiguel, Tokens.com has no direct publicly traded competition in the Proof-of-Stake DeFi space. The most comparable companies are Bitcoin Processors like Bitfarms (www.bitfarms.com, TSX-V: BITF), that do similar work, but use a different technique; and Payment Processors like The Nuvei Corporation (www.nuvei.com, TSE: NVEI), whose end result is similar.
None of these companies are using the same technique as Tokens.com – validating transactions through staking, to generate revenue from crypto and DeFi activities – which Kiguel feels makes his company totally unique. “If you want to have exposure to Bitcoin, there are funds, and there are miners. But if you want high-torque exposure to things like DeFi, there’s really no other publicly traded alternatives out there. There’s nobody like us who uses crypto as a way of generating revenue.”
Tokens.com was recently approved for OTC listing in the US, and will begin trading in mid-September under the ticker SMURF.
For more information on Tokens.com Corp. (OTCQB: SMURF, NEO: COIN) please click the request investor info button.
FULL DISCLOSURE: Tokens.com is a client of BTV-Business Television. This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. Any action taken as a result of reading information here is the reader’s sole responsibility.