A blockchain platform called Desico claims it’s the world’s first way to issue and trade security tokens in full compliance with the law. Taking its name as an acronym of “decentralized ecosystem for security ICOs,” the company was founded in the first quarter of 2018 by the three-person team of Laimonas Noreika, Ethan Pierse, and Audrius Griskevicius.
The entrepreneurial trio has an established track record in financial technology. In 2015, they started FinBee, a peer-to-peer lending and crowdfunding platform that has already funded more than $15 million euro in loans for businesses and individuals. Now they turn their attention to the world of crypto and blockchain.
One can think of Desico as a kind of Kickstarter for companies to issue tokenized securities. Attached to that is a “stock exchange” where people can trade these newly issued securities from day one. The platform also enables retail investors to participate in early stage investments like seed rounds and series A, which are only available to accredited investors and large institutions today. Desico operates in an environment regulated by the Bank of Lithuania, supporting debt, equity, profit sharing, and revenue sharing.
But is it here to stay? We asked CEO and co-founder Laimonas Noreika about the rather short lifespan of so many companies who have thrown their hats into the blockchain space. The emergent cryptocurrency and ICO niche is riddled with anecdotes of well-hyped companies raising tons of money, only to fold a short time later.
“There is no single reason for that,” Noreika explained. “ICOs are a startup world, so we should have in mind that majority of startups fail. Also the hype around blockchain investments was so huge that both institutional and retail investors made decisions based on emotions, not valuations based on analysis.”
Noreika added that many companies have used the ICO mechanism to fundraise whether or not they actually needed a utility token in their ecosystem. “Even if company is doing what they promised, the token can significantly decrease in value because it’s not needed as a means of payment, and has zero or near-zero ecosystem utility,” he said.
Desico’s own security token offering launches on November 7 and they seek to raise $1 million USD.
Their token will of course be tradable right away.