Ladies and gentlemen,
It is an honor and satisfaction for me to address you again and tell you about what our company — Stobox —has achieved in the past 6 months. I will share with you the actions and initiatives we have embarked upon so far, and will ask you to consider the company’s prospects and future plans. Past 2 quarters have been a time of constant changes, development, and difficult yet necessary decisions aimed at the transformation of the company. We have laid the foundations for a future of orderly, sustainable, and profitable growth.
We have accordingly undertaken an ambitious range of actions and decisions that are shaping the industry of digital assets, especially digital securities. As CEO, my role was to describe those challenges and difficulties to you and to the investment community with the utmost clarity and transparency. However, I also wanted to convey, with that same clarity and conviction, that we were entirely confident and certain about the path we had to follow for the company to successfully overcome those many challenges. With that goal in mind, we continue our business development and growth.
Stobox has identified several opportunities and focus on their realization:
Digital Securities
Being one of the pioneers in the newly born market of Security Tokens or Digital Securities, Stobox continues to develop. Stobox Digital Securities Dashboard is an Ethereum-based infrastructure that allows you to issue and offer for sale financial instruments, manage investor relations, and facilitate the secondary exchange of securities. The Dashboard supports all types of securities, including shares, bonds, revenue share certificates, fund units, etc.
DS Dashboard is a White Label SaaS Solution for businesses that seek to tokenize corporate securities in a legally compliant manner.
It provides comprehensive functionality to support operations with digital securities, including Identity Verification, Securities Offerings (STO), Dividend Payout, and Transaction Verification. Much more functionality will be available in future versions of the product.
DS Dashboard utilizes both decentralized and centralized technology stacks to take the best of both worlds. The decentralized blockchain-based infrastructure serves as a securities ownership and transaction registry, whereas the centralized one contains sensitive personal data and provides user-friendly access to the functionality.
We develop the dashboard in a way that any company that is seeking to tokenize its securities like shares, revenue shares, bonds, and others, can be tokenized using Stobox technologies.
In the meantime, we are preparing a demo structure to demonstrate the full future functionality to our business customers with which we already engage and who are waiting for the dashboard to be implemented. We are finalizing the legal and technical steps to deliver the SaaS product for our existing customers.
Stobox Security Token Offering
The first implementation of the dashboard will be the STO of Stobox Technologies Inc., our US-based company. It will issue securities for the international investors, both accredited and non-accredited, to enable them to participate in Stobox future financial growth and development of Stobox vision and the product. To accomplish the STO, we utilize our wide regulatory and legal knowledge and the dashboard itself. We plan to deliver our STO in December this year. Since it is a strictly regulated process, anyone who would like to participate in it is obliged to undergo the KYC and AML process to be whitelisted. Further information will be published on our official website.
Challenges
The dashboard itself and the vision of STO has certain challenges.
- First of all, many clients have a different vision, or sometimes even no vision, of what a security token offering is, and therefore, the education and standardization processes of the digital securities offerings are some of the main challenges.
- We do not work in a market that is fully aware of the STO peculiarities, so to deal with such market incompetence, we share information to let people know about the processes of STOs and how they are compliant.
- Another challenge for the Dashboard is a technical challenge because we are combining both traditional Web and Web3 technologies. Basically, those are centralized and decentralized technologies in one unique product with the aim to deliver the benefits and key features of both. Thus, we have to comply with the existing privacy requirements such as GDPR to be able to store users’ information since most countries have limitations on how and where the data can be stored. So on the one hand, we use advanced decentralized technologies to comply with the financial regulation standards, and on the other hand, we utilize Ethereum blockchain and make sure that our registry is easily accessible and the dashboard is a unique mixture and the melting point of those two technologies.
Stobox Crypto Exchange
Stobox Crypto Exchange is a very promising and unique product in our product pipeline. The reason why we focus on it is that we see an emerging demand for compliant crypto activities. Due to the fact that most of our corporate clients are from the regulated/compliant space, they are seeking cooperation with exchanges that would provide them with the same level of compliance as their own business.
In today’s world, it is difficult to differentiate between crypto exchanges and we foresee our four key strong points that help us stand out:
- AML Compliant from Day 1
The exchange will not be regulated at this point as a venue but we will enforce all the AML, compliance, and other rules to ensure that all operations on the exchange are transparent and that we do not deal with any shady customers. Therefore, once a user exceeds the limit of one thousand USD in their transfers on the exchange, we oblige them to undergo the KYC process to make sure that our clients are not associated with any prohibited and illegal activities. The key priority for us is to ensure that the exchange is transparent, compliant with international AML regulations, and that it cooperates exclusively with the whitelisted clients. - User rankings, referrals, and personalized scores
The exchange is utilizing different business models based on commissions and referrals. Most of our competitors offer just a simple referral program, however, we would like to go beyond that and allow our users with certain ranks to generate passive income by inviting other people to crypto trading. - NFTs
The NFTs market is a very niche and special market that is actively growing now. We believe that NFTs are a good method of engaging and promoting clients and it will let Stobox Crypto Exchange be distinguished. - Technology and implementation
Our innovative technology is being built from scratch by the internal tech team and external advisors. We are aware of cases of users’ money being stolen on other exchanges and in order to eliminate the chance of this happening on our exchange, we do everything possible to ensure the security and reliability of our product, however hard and time-consuming it may be.
Challenges
There are certain challenges we face during the development of the Stobox Crypto Exchange such as engaging clients, promoting our crypto services at the market, maintaining the top level of security, providing high-level support in multiple languages, listing only tokens and projects that are whitelisted and long-term based to offer them to global token holders.
Conclusion
All in all, regardless of what the product is, at Stobox we try to deliver the highest quality and professional services to our users so that we understand that Stobox Crypto Exchange must keep abreast of the given level. Initially, we estimated the release of the exchange to take place in November 2020. However, today we have made a very important decision to use additional timing to keep up with the challenges.
We believe that the exchange is not only about the venue itself but also about the people and the way people interact with each other at that venue. We do not want to give a misleading impression of an exchange with a low amount of active users which will result in them leaving and being disappointed with our services.
For that reason, we plan to deploy the functionality step by step, beginning with the registration and the KYC process on the exchange which will start in December this year. It will allow us to onboard people, assign them with ranks, and spread the word about Stobox by using referral links. The actual trading operations, spot, and marginal trading will be launched as soon as we reach 10,000 registered users, but not earlier than January 15th, 2021.
By following such a model we plan to ensure that we manage to engage enough users before the launch date and at the same time increase liquidity which is one of the most important things on any exchange. So anyone who wants to use Stobox crypto services will have to register, pass the KYC (to increase limits), and then use their accounts to invite new people.
Consulting Services
Consulting is one of the first and main parts of our company’s activity. It is what our clients deal with in the first turn when they approach Stobox. Consultations are crucial because they provide clients with an understanding of STO and according to their requests introduce them to other important concepts of this field.
We are happy to announce that consulting is currently a revenue-generating activity for our company. Most Stobox clients pay for the consulting hours as their primary stage for the further development and issuance of digital securities. We believe it plays an enormous role in our activity and will remain the first stage of using any product our customers choose.
With this being said, we are trying to ensure to keep the consultation services at the top level possible, constantly improving our proficiency and moving along with the needs of our clients and the market in general. Although consultancy can not be scaled to the mass production level, it will be a great financial support for the company to cover the costs and the break-even point in the long run. That is why, regardless of the technology and our initiatives with crypto, we will keep continuously developing our consulting arm to bring profits to the company.
Digital Assets Investment Conference
We are also glad to mention that this year we hosted our first event — the Digital Assets Investment Conference — a proprietary conference where we meet the industry key-figures in order to share their knowledge and expertise with our communities. Such an event helped to strengthen our reputation, build strong connections with the professionals in the field, get acquainted with new visions, and contribute to the market.
The conference featured such high-profile speakers as David Weild IV (former vice-president of NASDAQ) and Felix Mago (Co-Founder of Dash NEXT), and was supported by top-media including TheTokenizer, TheTokenist, Coinstelegram, and CryptoNewsZ.
We would like to continue this great practice in the future and hope that the next conference will attract even more people and perhaps even will be held offline if the circumstances allow so.
Stobox Global Challenges
Stobox, like any other company in the world, meets challenges that are being dictated by the external life around us such as a Covid-19 pandemic, digital transformation, and the development of new technologies, political and economic instabilities. Challenges are inevitable, especially in such novel fields of business as digital assets and digital securities. Even though challenges may become a barrier that must be overcome in order to succeed, we are sure that, if identified and handled right, they can also be turned into new opportunities and become unique key features of the company in the long run.
- Regulatory frameworks
Our company conducts various activities in multiple innovative jurisdictions with different peculiarities, and being compliant with each of them is quite challenging. For that reason, the current Stobox structure comprises several companies established to divide the general processes. - New Team Members
The company and its operations are growing exponentially. Upon our start, our main focus was on digital securities and market analysis for the STOs. But last year showed us that the market has so much potential and so much innovation that we could not leave those opportunities behind. Therefore, today our new challenge is to bring more international people onboard.
Our goal is to engage people who are professionals in their fields. In 2021, we expect to do a big jump in such operations as sales, business development, and partnerships throughout the globe, so an international team is vital to make it possible.
As a modern international company, we look into all types of diversity; we are open to onboard professionals with various backgrounds and we believe it will become our key advantage of the future. - Marketing
Marketing of our services is another important challenge. It comes with the adoption which is rising step by step and we do various activities like education to speed it up. But the marketing of our products is something that is unique and non-obvious since the market is new and rather shallow. Finding the best marketing opportunities and tools is quite a challenge because selling new business models like STOs is completely different from just selling regular technology products.
Marketing in our case is different from the regular procedures done to promote a software product, it goes beyond it, since we need to build a certain market reputation, trust, and to enable processes that would allow companies to approach their goals with STO. Unfortunately, by far there is no precise model of how we can promote those services, so time and effort are required to work it out.
Conclusion
“A journey of a thousand miles begins with a single step”. Chinese proverb
With a large focus on growth, development, financial results, and professionalism, Stobox is taking further steps to make headway. We are responsible for our deliveries, and therefore, we understand that some changes in timelines and expectations may be required. But, however hard and time-consuming the challenges we face are, we do everything possible to find the best solutions and turn those challenges into our future opportunities.
On behalf of the whole Stobox team, I would like to thank you for your support. Stay with Stobox and help us move forward!
Gene Deyev
Chairman & CEO Stobox
