The Evolution of Atomic Settlement: Empowering Next-Gen ETFs with Equity Tokens and Ohanae Coin
Published on March 07, 2024
Author : Greg Hauw, Founder & CEO, Ohanae, Inc

“The Ohanae Platform ensures atomic settlement, meaning that transactions are executed as a single, seamless process. This eliminates the possibility of partial or incomplete transactions, providing a secure and efficient trading environment.”

- Greg Hauw, Founder & CEO

 

In the dynamic realm of finance, the notion of "Atomic Settlement" shines as a beacon of efficiency and reliability. Traditional financial systems often grapple with delays and complexities, with transactions requiring days to settle. However, with the ascent of decentralized finance (“DeFi”), the promise of atomic settlement takes center stage, offering instantaneous and immutable transactions.

Historically, financial transactions involving assets and currencies have labored under the T+2 settlement system—a vestige from the era of physical delivery. This system, tailored to accommodate paper certificates, now appears outdated in the digital age, where assets are dematerialized, and transactions demand immediacy.

Enter DeFi, where atomic settlement reigns supreme. In this paradigm, transactions occur and settle simultaneously, ensuring assets and currencies change hands the moment a trade is agreed upon. This real-time settlement mechanism marks a significant departure from the sluggish processes of traditional finance.

One sector profoundly impacted by atomic settlement is Exchange-Traded Fund (“ETF”). ETFs, cherished for their diversification benefits and trading ease, have long grappled with delays and inefficiencies due to their traditional settlement model.

The integration of Equity Tokens and Ohanae Coin into the Ohanae Platform heralds a transformative shift in the ETF landscape. Equity Tokens represent fractional ownership of assets, enabling investors to access a diverse array of assets without intermediaries.

“Ohanae Coins, also known as (“OUSD”), are deposit tokens issued on the Ohanae Blockchain by Ohanae Securities, representing a deposit claim in approved banks. These tokens serve as a stable deposit coin for capital markets and are economically equivalent to existing deposits, offering a programmable way to handle payments and settlement within blockchain-native environments. Ohanae Coin facilitates fast and cost-effective transactions while ensuring transparency and immutability on the Ohanae Platform.”

Ohanae Coin, the native cryptocurrency of the Ohanae Platform, serves as the backbone of the ecosystem. It facilitates fast and cost-effective transactions while safeguarding the integrity and security of underlying assets. Ohanae Coin leverages Web3 technology to ensure transparency and immutability, enhancing trust among investors.

Powered by innovative technologies like Equity Tokens and Ohanae Coin, the Ohanae Platform is redefining how ETFs are traded and settled. Leveraging blockchain and smart contracts, the platform facilitates instantaneous and immutable transactions, eliminating delays inherent in traditional settlement systems.

A key advantage of Equity Tokens and Ohanae Coin lies in their capacity to enable atomic settlement in ETF transactions. Unlike traditional systems reliant on intermediaries and manual processes, Equity Tokens and Ohanae Coin ensure seamless and transparent transactions, with trades executed and settled in real-time.

Moreover, the integration of Ohanae Coin into the Ohanae Platform provides investors access to a secure and efficient ecosystem for ETF trading. Serving as the platform's native cryptocurrency, Ohanae Coin facilitates fast and cost-effective transactions while safeguarding the integrity and security of underlying assets.

The implications of this evolution in atomic settlement are profound. By streamlining trading and settlement processes through automated market maker (“AMM”) technology, Equity Tokens and Ohanae Coin democratize access to ETFs, enhancing efficiency and accessibility for investors of all backgrounds. Additionally, by diminishing reliance on traditional intermediaries, these technologies bolster transparency and trust in the ETF market.

Looking forward, the integration of Equity Tokens and Ohanae Coin into the Ohanae Platform promises to unlock novel avenues for innovation in the ETF space. As the next generation of ETFs emerges, driven by Web3 technology and decentralized finance principles, investors can anticipate a future characterized by heightened efficiency, transparency, and accessibility in investment opportunities.

Unveiling the Mechanics of Spot Bitcoin ETFs

To truly grasp the behind-the-scenes operations of spot Bitcoin ETFs, we turn to the insightful analysis provided by Byron Gilliam in his Blockworks article. Gilliam sheds light on the intricate processes involved when large institutional buyers enter the market.

When a retail investor purchases a Bitcoin ETF, the process mirrors that of a conventional stock exchange. However, when an institutional investor aims to buy a substantial amount, say, $250 million worth of a Bitcoin ETF, the scenario shifts dramatically. The institutional buyer procures the ETF from a market maker, who then hedges their short position by purchasing CME Bitcoin futures. This hedging process cascades through various market participants, including high-frequency traders, ultimately leading to the acquisition of spot Bitcoin.

While this process may seem convoluted, it highlights the complexities inherent in the current ETF market structure. These intricacies often exacerbate short-term imbalances, contributing to heightened volatility in Bitcoin prices.

Despite these challenges, the integration of Equity Tokens and Ohanae Coin into the Ohanae Platform promises to streamline ETF operations, paving the way for a more efficient and transparent market. As the ETF landscape continues to evolve, driven by technological innovation and decentralized finance principles, investors can look forward to a future characterized by enhanced accessibility and reliability in ETF trading and settlement.

Getting Started:

Unleash the Power of Web3: Join Ohanae and Redefine OTC Securities Today

Related Article:

Ohanae Coin: A Stable Deposit Coin for Capital Markets

Disclaimer

An offering statement regarding this offering has been filed with the SEC.  The SEC has qualified that offering statement, which only means that the company may make sales of the securities described by the offering statement.  It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement.  The offering circular that is part of that offering statement is at https://vdr.ohanae.com/projects/ohanae.  You should read the offering circular before making any investment.

Ohanae Securities LLC is a subsidiary of Ohanae, Inc. and member of FINRA/SIPC. Additional information about Ohanae Securities LLC can be found on BrokerCheck. Ohanae Securities LLC is in discussions with FINRA about exploring the expansion of business lines for the broker/dealer.  Any statements regarding abilities of Ohanae Securities LLC are subject to FINRA approval and there are no guarantees FINRA will approve the broker/dealer’s expansion.

Ohanae Securities is seeking approval to be a special purpose broker-dealer that is performing the full set of broker-dealer functions with respect to digital asset securities – including maintaining custody of these assets – in a manner that addresses the unique attributes of digital asset securities and minimizes risk to investors and other market participants. If approved, Ohanae Securities will limit its business to digital asset securities to isolate risk and having policies and procedures to, among other things, assess a given digital asset security’s distributed ledger technology and protect the private keys necessary to transfer the digital asset security.