Every asset sold through a smart contract issues goes through a Proof-of-Asset protocol in order to be able to issue security tokens. These tokens are sold during the funding period of an asset that represents the economic benefit of owning a fractional share of the asset. This means token holders are entitled to asset appreciation and that of the digital security token. For example, a building is sold for 15,000 ETH. The smart contract issues a "Proof of Asset” passed token to investors to purchase which can then be traded.
The "Proof of Asset” Protocol is based on an Ethereum Blockchain smart contract. The Blockchain Service Architecture can be structured with a sequential chain of smart contracts and supplemented with oracles. Which financial asset needs to be tokenized depends upon the number of steps and the type of project requiring financing. The "Proof of Asset' Protocol can be used by traditional financial institutions for issuing asset backed security tokens. The protocol tends to maximize the liquidity of real-world assets while delivering constant updates to investors and owners at the same time.
Red Matter’s Proof of Asset Protocol
The Proof of Asset protocol lets a business issue asset-backed security tokens. Investors shield crypto or fiat against real-world assets to get better capital appreciation. Red Matter issues digital securities, publicly listed equities, ETFs, and commodities for Pre-IPO companies. Each asset is given a token symbol on the blockchain and underlying smart contract. Investors purchase securities without prefunding a brokerage account. When the order is completed, shares are held with brokers, banks, and companies looking to raise private capital. In return for the assets you purchased, you receive digital security token in your wallet. These securities can be transferred and traded easily with other investors of Red Matter as a BSC synthetic token.
How can you list securities on RedMatter?
Buy stocks and commodities- You can purchase as many financial assets you want here (unless the account holder is domiciled in an OFAC country). However, you need to add extra information about your personal details, including ID, proof of residency, and address on orders greater than USD 5,000.
Place an order- After buying the commodity or stock, you will receive a booking confirmation on your purchase and the status of your order. When the field is replaced with "Filled," the order gets processed and accepted on our end.
Trade digital security tokens- After the order is "Filled," digital securities are issued on a Blockchain smart contract. This is strongly backed by the stock that was purchased. The securities are pegged against purchased assets that allow investors in the crypto community to trade on decentralized exchanges easily.
Pay for financial securities- Red Matter accepts only LTC coin as instant booking unless the investor funds their account in advance with fiat.
LTC support- Crypto transactions on smart contracts can be done in seconds. Alternatively, it can take a few days before it is received, rendering a limit order price invalid that the buyer set. So when we receive an LTC transfer, it directly converts to fiat. The funds are transferred to our broker account and executed within 1-2 hours.
Fiat Funding- Investors can fund their trading accounts with fiat. Send the amount you wish to fund your account based on expected trades in USD or Euro. When the amount is received, the user can see their dashboard and book an order to receive trade confirmation.
Cashing out of your security tokens- At the end, you'll find your financial securities represented as tokens on the Red Matter Primary Market Exchange. Place the cash-out request as a Sell Order (terms and conditions apply).
To sum up
Blockchain and DeFi has changed the way people invest in securities and companies. People are free from barriers that currently prevent them from investing into a portfolio of assets that provides opportunities for stable growth in a regulated environment.