Recently, I wrote about the emergence of security tokens in permissioned blockchains as a “local maximum” phenomenon or an approach with strong short term perspectives but with questionable viability long term. The last part of that article explores the idea of a security token network that enables public availability with privacy constraints to link together the different participants in the security token ecosystem. Coincidentally, shortly after my article came out, we saw the news of Provenance raising $20 million on a security token offering(STO) to build a very similar model. Today, I would like to explore some ideas about the thesis of security token networks, its value proposition and risks.
As a market dynamic, the emergence of security token networks might be influenced by two conflicting phenomenon’s: