The digital asset management company Elevated Returns has built an exchange which utilizes Tezos. The exchange is called ERX and users will be able to trade security tokens. The variety of the security tokens that will trade on ERX will be broader than the real estate tokens that we've seen deployed on Tezos so far. We'll have a separate article on what will be traded on ERX in a follow-up article.
ERX is a centralized exchange and anyone can register as a user. Due to the fact that ERX allows you to trade securities, you will have to go through a KYC- (Know Your Customer) and AML (Anti Money Laundering) process to verify your identity. But since we're already used to those practices in other centralized exchanges, there's nothing new in that department. What is new, is the fact that security tokens are heavily regulated. And ERX strictly follows these regulations. This means that some tokens will not be able for all users of ERX, depending on where they are located.
ERX is based in Thailand. The reason for choosing this location as basis, is the fact that Thai regulations are one of the most progressive as it comes to trading these types of assets. Amending these progressive regulations is currently in its last phase and as soon as they take effect, ERX will go live as one of the most accessible of its kind.
The Tezos blockchain is an important component of ERX. All traders that register on ERX will have personal addresses on the Tezos blockchain. And because users will need a separate address for each asset they own on ERX, every user will eventually have several Tezos addresses to his or her name.
Initial trades will be made in the custodial wallet and all transactions will be registered on Tezos in batches. This way customers will be able to pay in fiat, while ERX takes care of the transaction costs which are paid in XTZ.
Why Tezos addresses? Because all assets that are traded on ERX will be registered on Tezos. And all the necessary info to be able to comply with the Thai SEC can be registered on Tezos' tokenstandards. Trading security tokens is traditionally a complex and expensive process, but when tokenized, regulations can be enforced by smartcontracts on the Tezos blockchain. Through Tezos, a lot of administrative and legal processes can be automated, simplifying the process and making things a lot cheaper.
ERX does not only target crypto enthusiasts. As a matter of fact, their target audience is the traditional investor. Needless to say, ERX is custodial like any other centralized exchange. That means that they manage the private- and public keys for their users. ERX will introduce a product that utilizes blockchain, while few users will realize it does. This is real-world adoption.
Currently ERX has enlisted about 500 clients and at launch of the platform, they intend to start trading with two listed tokens.
Elevated Returns is also the major shareholder of Thailand publicly listed company Seamico Capital (ZMICO.BK)
ZMICO’s capital fully owned subsidiary SE Digital is holding a Token Issuance Portal license and has filed with the Thai SEC the first regulatory compliant token offering memorandum last Monday. The offering is for a USD80mm real estate backed token. SEC’s approval is expected by March. The token will be a Tezos NBIT smart contract and will be traded on ERX.
ER-X: a utility token
The ERX exchange will have a utility token called ER-X. It will allow users to get discounts on transaction fees on the exchange. ER-X tokens will be launched on Tezos and they are pure utility tokens. This means that ER-X tokens are not security tokens and will be trading on multiple (crypto) exchanges. The supply of ER-X will be capped and there will be a presale.
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