Spotlight on INX: Distributing Tokens for the World's First Blockchain IPO
On September 15, 2020, we distributed the INX tokens to the first batch of investors in the INX IPO. The INX tokens were developed using ERC-1404 and designed to be held in any wallet or custody solution. The Tokensoft platform sent out a total of 1,594,883.6375 tokens to 207 investors over the course of ten hours. In this post, we’ll run through the elements that helped us make this distribution a success.
When INX investors register and invest through the Tokensoft platform, they have the option of selecting their preferred method of holding their tokens. Investors currently have the following options available to them:
Tokensoft Investment Accounts — A brokerage-style experience underpinned by a self-managed, multi-signature wallet
ERC-20 Wallets — Any ERC-20 wallet has the capability of holding tokens issued on ERC-1404 including but not limited to Metamask, Coinbase Wallet, or MyCrypto.
Third-Party, Regulated Custody
BitGo — A US based custodian that provides both managed and self-managed custodial solutions
Anchorage — A US based custodian that provides a high-end managed custody solution
Hex Trust — A Hong Kong based trust that provides a managed custody solution
Tokensoft is committed to enabling a variety of self-custody options and regulated custody options as the market demands.
Tokensoft customers may have anywhere from one hundred to tens of thousands of investors. As a result, we’ve built tools to distribute a high-volume of tokens to a high quantity of investors. Tokensoft is also structured as a technology company, as a result, we’ve had to build distribution tools that operate without taking custody of tokens. This tooling is fully on-chain, automated, and requires approval by the issuer and transfer agent. Additionally as the distribution list awaits approval from various parties, it is locked so that it cannot be tampered with.
We’ve been using this for INX with the goal of reducing manual entry error and ensuring investors receive their purchased tokens.
Since inception, we’ve always had a cybersecurity focus. In February of 2018, we developed and launched the world’s first custody solution for security tokens. It was designed as a cold-storage, multi-signature wallet and featured a double air gapped solution to enable the highest level of security on the cryptocurrency market or otherwise. When it came to day-to-day administration, we set off to evaluate solutions that were implemented with a high level of security. In our vendor interviews we came across Hub Security. What we liked was their in-depth understanding of cryptography and encryption, many of the vendors we spoke with could not answer elementary questions about cryptography.
Hub Security VaultThe Hub Security solution is comprised of simple and elegant techniques to enable a high level of security and scalability. This gave us confidence in selecting Hub Security as the solution. With cryptography, complexity is the enemy of security and this gave us a high level of confidence in the solution.
Hub Security HSM’s are used to manage any smart contracts associated with the Tokensoft Transfer Agent.
We’re proud to have designed a system that can securely and confidently distribute tokens to INX investors through such turbulent times (on the blockchain). If you are seeking to launch a private or public market security and would like to learn more, please contact us at firstname.lastname@example.org.
About Tokensoft Tokensoft is a leading technology platform for blockchain-enabled securities based in San Francisco, CA. The Tokensoft platform enables forward-thinking enterprises, asset managers, and financial institutions to fundraise, manage investors, and access secondary market liquidity using the blockchain. The Tokensoft platform has processed investors in over 50 countries and Tokensoft customers have raised or managed over a billion USD.
About INX Limited INX Limited, a Gibraltar-based private company formed in 2017, is developing INX Trading Solutions, a single entry-point for our customers for the trading of cryptocurrencies, security tokens, and their derivatives.
About Tokensoft Transfer Agent Tokensoft Transfer Agent (TTA) is an SEC-registered transfer agent based in San Francisco, CA. TTA serves both privately and publicly trading companies based in the US. TTA uses Tokensoft technology to provide issuers of SEC registered offerings with a fully managed solution on public blockchains.
About ERC-1404 ERC-1404 is an Ethereum smart contract standard developed by the Tokensoft development team. ERC-1404 is the most commonly cited standard for security tokens in SEC filings and was used in the launch of the first SEC-registered mutual fund on the blockchain, the Arca U.S. Treasury Fund and the first blockchain IPO, INX Ltd.