Overstock finally issued digital dividends, STO + Staking wants to break the deadlock in liquidity?
A few years ago, even before the establishment of the digital currency regulatory framework in the United States, some leading overseas institutions took the lead in planting seeds in the field of digital assets through STO.
Overstock, a well-known American e-commerce platform, is one of them.
tZERO, a subsidiary of Overstock, was established at the end of 2017. At that time, its vision was "the first token issuance exchange that complies with the SEC and FINRA standards and regulations of the US Securities Regulatory Commission and facilitates digital securities transactions."
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STO+Staking, Overstock finally issued "digital dividends"
Last week, Overstock announced its dividend plan. Whether it is Overstock or tZERO, they are taking the road of compliant digital securities (STO) listing under the supervision of the SEC. Therefore, Overstock has registered the distribution of this dividend with the SEC before, and ensured that the distributed OSTKO can be freely transferred without being attached to the company.
Overstock will pay its long-delayed dividend on May 19 in the form of "digital preferred shares." Shareholders will receive A-1 Digital Preferred Stock (Digital Voting Series A-1 Preferred Stock, OSTKO) with voting rights at a ratio of 10:1 based on the number of shares they hold. The share registration date is April 27, and the payment date is May 19. A total of 4.37 million OSTKO will be distributed this time.
However, the digital security can only be traded on the digital stock exchange tZERO.
According to Overstock CEO Jonathan Johnson, "I hope that the distribution of this dividend will increase the liquidity of the tZERO platform and incentivize partners to connect with the tZERO platform."
A financial blogger in the industry creatively referred to this new method as "an attempt of STO + Staking".
In fact, the two methods do have similarities. The term Staking is no stranger to the industry. The operation mode of Staking is mainly: that is, token holders obtain transaction fees, block rewards, and dividends through actions such as pledge, voting, entrustment, and locking of tokens. According to the different certificates held, the annualized rate of return is also different.
For investors, Staking has a simpler understanding: "Deposit coins to generate coins". From the currency standard, this is called "guaranteed income". But judging from the income of legal currency, the income may not fall as fast as the currency price.
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Overstock
Overstock subsidiary tZERO is the first digital securities trading platform to be established.
As early as 2014, Overstock announced that it would build an equity trading platform based on blockchain technology, and officially announced its entry into the blockchain industry. Overstock gradually transformed into a "blockchain e-commerce".
During this period of time, the U.S. regulatory framework for digital currency has not yet been established. However, Overstock’s efforts in the blockchain field can get positive feedback in its stock market price. Although the increase is not large in the short term, since 2014, Overstock’s market price has been on a slow rise.
According to public information, in September 2017, Overstock officially launched the alternative asset trading platform (ATS) tZERO. In the fourth quarter of 2017, Overstock also received a substantial increase in Soros' funds. In February 2018, the tZero Alternative Asset Trading Platform (ATS) issued tokens and began to accept scrutiny from the US SEC. Became an early "compliance" advocate.
tZERO’s true digital securities offering was completed in October 2018, with $134 million worth of digital securities eventually issued. And at one time became one of the first STOs issued based on the decentralized network (Ethereum mainnet).
So far, Overstock has become a "pioneer in the STO field" and has begun to release related news frequently.
In January 2019, tZERO's digital securities were issued to investors. After the three-month lock-up period, tZERO investors can obtain the tokens invested at that time.
On January 25, 2019, the tZERO digital stock exchange announced the official opening of trading.
However, tZERO is still a little slower. In the second half of 2018, Openfinance, another alternative asset trading platform in the United States, took the lead in opening the trading of digital securities, and different types of digital securities were listed and traded on the platform one after another. On the tZERO platform, there are currently only two securities that can be traded, that is, the digital securities TZEROP issued by tZERO itself and the digital preferred stock OSTKO issued by Overstock this time.
However, Overstock, which has long been labeled as a "blockchain concept stock", has always formed a linkage with the information released by tZERO about the stock price. Once a piece of news about tZERO's large-scale financing was able to make the Overstock stock price soar.
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The Liquidity Conundrum of STOs
Since the digital dividends issued this time can only be traded on the tZERO platform, this may inject more possibilities into STO, which currently lacks liquidity.
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(Data source: stomarket.com)
Overstock CEO Saum Noursalehi has stated publicly more than once that he hopes to distribute dividends by issuing digital securities to shareholders. This is a good incentive for all shareholders and is expected to increase everyone’s acceptance of tZERO .
He has repeatedly said to the outside world: "The platform is very concerned about liquidity."
Bruce Fenton, a member of the board of directors of tZERO, told Blocklike that he also told the media before that tZERO is working hard to involve more institutions so that tZERO can have more contacts with other brokers and exchanges.
He also said: “tZERO has many ways to connect with Wall Street. The whole industry is still in a very early stage, so patience is the key.”
With the release of "digital dividends", will Overstock's attempt to reinvigorate STO? Or show the platform's decline again? We look forward to market feedback.
