Crypto Market Needs More Institutional Investors, DESICO CEO Tells Cryptovest
Cryptovest caught up with Laimonas Noreika, co-founder and CEO of DESICO, for a short interview. DESICO operates a platform for security token operations, including STOs.
Security tokens are becoming a megatrend thanks to the unique benefits and features they offer compared to blockchain, the most popular type of distributed ledger technology. Security tokens enable companies to digitize real-world assets, such as company stocks, commodities or real estate, in order to speed up trading processes and ensure a higher level of liquidity. DESICO, a Lithuania-based company, is currently working on a platform and ecosystem focused on security tokens and security token offerings (STOs) – a fundraising method similar to initial coin offerings (ICOs). The company hopes to lead the new industry once it goes mainstream.
DESICO claims that it is endorsed by Lithuania’s government agencies, such as the Ministry of Finance and the Ministry of the Economy. As we reported earlier, Lithuania is open to supporting this emerging industry by following in the footsteps on Malta.
We had the pleasure to get in touch with DESICO co-founder and CEO Laimonas Noreika, who shared his views on the security token space. Here is our short interview:
CV: Hi Mr. Noreika! What is the current situation with the security token market from your perspective?
Laimonas: The tokenization of assets is still in its early stages. Major tokenized securities players are not creating vital infrastructure - primary and secondary markets, custody services, etc. However, most of the market participants are focusing on tokenizing real estate, investment funds. At the current stage, not many players are choosing to raise funds through security token offerings, but I believe that soon we’ll see more and more companies and startups stepping into this ecosystem. Inevitably, these entities will have to find business models where retail main street investors can access these investments.
CV: What about the cryptocurrency market? Will there still be strong demand for ICOs?
Laimonas: As I see, the cryptocurrency market is maturing. Currently, there are being created tools and infrastructures aimed at institutional investors. It still might take some time until we see big traditional investors showing interest in cryptos. However, without it, I’m not projecting new heights. We need to stabilize the market, let institutions step in, and then we can expect another significant bull run.
CV: What are the events that should happen over the next years to bring back the excitement to blockchain and crypto?
Laimonas: As I already mentioned, institutional investors have to enter the crypto space, and I expect them to bet especially on Bitcoin. I anticipate retail investors to come back as well, even if the market doesn’t show the same volatility as in 2017, for example. But I guess the stabilization will be converted into an advantage, as Bitcoin will be seen as a safe harbor from fluctuating financial markets.
CV: Which companies and startups are the best candidates for an STO vs. ICO vs. IPO?
Laimonas: When speaking about which ICO project might become a good candidate to conduct an STO, I would point out those that have the potential to scale by leveraging blockchain but have no need for utility token tokenomics. These should be first candidates.
Currently, most projects are using utility tokens to avoid regulations, not that they need a utility token. Also, companies which are too small to do an IPO should go for an STO.
Thanks, Laimonas for your time!
We found Mr. Noreika very busy with DESICO’s own public offering event, which was scheduled for November 7. According to the CEO, the STO platform provider wants to demonstrate to potential clients that it is following the same business model that is offered to users. Thus, DESICO chose to tokenize its revenue, giving token holders quarterly payouts that total 12.5% of the entire revenue generated by companies under DESICO Group.
DESICO’s motto says that utility tokens failed their mission, and the future of crypto belongs to security tokens.