Exclusive: World’s First STO in Supply Chain to Launch

We have recently reported on the world’s first STO in supply chain, by edeXa. This news piece attracted so many readers, that we decided to follow up. Today our Chief Editor talks to Tim Stockschläger, Head of Communication for edeXa.

Q) I have recently come back from Mongolia where I gave a training course on the application of blockchain in supply chain management, therefore your field of work is of particular interest to me. Which part of the supply chain are you going to disrupt/streamline?

A) We have been working in the Supply Chain for almost 20 years with our parent company io-market. We will use this knowledge and extend our services to the blockchain. Our goal is to digitize the processes along the supply chain. Fact is that most business still rely heavily on paper documents (for example, invoices). We will take all these outdated processes and offer a comprehensive business solution on the blockchain for all stakeholder.

edeXa Management Team: Beat Oehri, Daniel Kohler, Tim Stockschläger

Q) Documentation, especially in shipping and in international logistics, is especially hard to streamline, due to differences in national standards. How are you going to tackle this issue?

A) Io-market has been aware of these challenges for several years. The technical aspects are almost solved and is not the big issue anymore. The challenge is to consider country-specific laws and standards which increase as a result of a global digitalisation.

Whenever international documentation and paperwork is required, it will get more difficult. The government in all countries have certain requirements and they are often still on paper – especially regarding the custom document. But change is in sight – even there. For example the European Union just made e-invoices mandatory – in some fields – and will extend that even further until 2021. We believe cross-border related paperwork will also see a shift in regulation and we will use this with our edeXa business blockchain.

Q) We reported on your plans to do an STO. You said it is a way to raise funding. What do you offer to potential investors? What kind of dividends may they expect?

A) That’s correct. A STO is a Security Token offering, which is comparable with a IPO however in a smaller and more efficient way. We accept investors from the European Economic Area to become a part of edeXa.io by investing as little as 500 Token (equivalent to 140 EUR in Pre-Sale I). All Investors will be officially listed in the stock register and become a legal owner of the shares. Yet, it’s too early to say anything about how much those dividends will be. However, it is a huge advantage over basically any ICO that we actually will pay out dividends in the future. We are planning to share the success with all our investors.

Also, an STO is regulated by certain authorities in the country. The edeXa STO has been reviewed by the Financial Market Authority of Liechtenstein. Furthermore, we have one of the oldest banks in Liechtenstein accompanying our fundraising efforts in order to make everything compliant and safe for the investors. That’s for sure one of our core messages; safety for our investors.

Q) Which platform and standard did you choose to tokenize your shares?

A) We’ve built our blockchain on top of the Ethereum technology. Our token is a ERC20 Token. What that basically means is that the ERC20 is a protocol standard that defines certain rules and standards for issuing those tokens on the Ethereum network and there are few established alternatives right now.

Q) Do you envisage internal tokens as a unit inside your blockchain?

A) Our public Token Sale is solely a Security Token for Investors. We do experiment with utility Token as a means of payment for services on the Blockchain. So there could very well be a utility Token inside our blockchain for trading / paying for services, but that would not be meant for external investor.

Q) If you were to convert your strategy into a script to a video / infographics, what would this script be?

A) If you’re asking for a very simple explanation of what we would do, it would probably look like this. We take all the transactions, trades and documents and register them on the blockchain and automate the processes with smart contractsThis speeds up all processes, avoids errors and increases security. The companies will have more resources available and gain more transparency over their business with accurate results.

Q) Which areas/sectors do you target?

A) Our target market is the Supply Chain industry. As mentioned before our parent company io-market has been developing applications for the industry for thousands of our clients for almost 20 years now. We focus on all process & transactions within a company or between companies and external stakeholders (tax advisors, government, customers) to make these processes safer and more reliable. That’s our core expertise and where we have the most experience in.

Furthermore, it’s safe to say that the blockchain is a very good match with the supply chain as those processes can be very complex and are in need of many stakeholders to make it “right”. Hence, with the blockchain, we can not only decrease costs but also make it faster, safer and more reliable. No human errors, no multiple third parties to confirm or double check processes. With that said, we can help especially those companies, who are looking to convert their traditional supply chain efforts into a safer, more reliable and future proof process.

Furthermore, we aim to cooperate with companies using our blockchain technology, for example, to provide their own services to their customers. These are primarily software manufacturers such as ERP and ECM manufacturers, as well as providers of IoT solution.

For this reason, we are very interested in partnerships that, together with edeXa, bring innovative blockchain solutions and applications to the market

Q) What is your vision on tokenization of assets in 2019, then in 3, then in 5 years?

A) We have great experience with the Security Token so far. Tokenization always requires corresponing regulation for example, so that goods or ownership can (legally) linked to the blockchain. Otherwise, Investors have no right to the underlying ownership. We are glad that Liechtenstein is at the forefront of the development and will likely soon sign the new blockchain act into law. Soon we plan to list our Token on one of the upcoming exchanges for Security Token.

The blockchain technology has proven to cut down on intermediaries, reduce costs and increase reliability. Therefore we see strong growth in blockchain use-cases and the adoption of tokenization of assets. The interest in these topics will grow further over the next years and could become mainstream within the next five years.