TokenSoft, a U.S.-regulated and leading security token issuance and asset servicing platform, has announced it is launching a solution for investor self-managed wallets.
Platforms have long been vying for market share with increasingly sophisticated platforms for issuers and investors alike and better and better user experience (UX).
TokenSoft's service is promising a less technical and more secure way to hold and control security token investments, and competes with other digital wallets offered by Bakkt, AlphaPoint and others. The product offers automated dividend distributions and built-in reporting for token issuers with multi-signature security.
We’re excited to bring a multi-signature wallet security packaged in a self-controlled, easy to manage brokerage-style experience to the over 100,000 investors using our platform
TokenSoft's Investment Account promises seamless access to dividend distributions and automated reinvestment opportunities, addressing a pain point in the emerging the digital asset field.
TokenSoft are approaching dividends from an interesting perspective, as a token issuer with a thousand investors, for example, would usually need to convert dividend payments from fiat currency into a stablecoin, and transfer those stablecoins to investors’ wallets. This process could generates a significant multiplicity of smart contract transactions at once. As the Ethereum network is only capable of processing 15-20 transactions per second, a dividend issuance could cause a bottleneck, causing transaction fees to spike on the network or to slow the network speed.
TokenSoft's solution is to reverse the distribution model, had hold a bank of dividends which are secured and governed by a smart contract, which investors can draw from upon request (and presumably on risk of delay/fees for the draw).
While TokenSoft say this permits easier dividend reinvestment, that doesn't seem like it is something which needs a reverse distribution model. However, TokenSoft are supporting US compliant security token standards such as ethereum's ERC-1404 and Tezos' FA1.2.
Jordan Davis, Director of Business Development at the firm, said wallets in the like of TokenSoft Investment Accounts will "put pressure" on more traditional financial institutions to offer better services and management tools to investors. He expanded:
People will be able to add or remove service providers from accessing their assets the same way you can add or remove profiles from your Netflix subscription.
In December, TokenSoft's subsidiary, DTAC LLC, was registered as a transfer agent with the U.S. Securities and Exchange Commission. TokenSoft also owns an interest in a broker-dealer registered with the Financial Industry Regulatory Authority.