Token Markets Today
One of the most disruptive capabilities of blockchain technology is the ability to create tokens that can be traded on their native platform. Among other use cases, these tokens can be financial securities, such as tokenized equity, or consumer tokens for people to use or consume in various ways, such as currencies that are units of stored value and used for electronic payments or user software licenses that enable participation in one or more dApps. For investment tokens, there will be individuals and institutions who will chose to buy, hold, and sell these tokens and for consumer tokens, there will be individuals and institutions who need to be educated about the tokens’ utility.
Much like participants in traditional financial markets, participants in cryptoeconomies need trusted data to properly understand how tokens work in dApps, make investment decisions and to manage token-based portfolios. However, while this need for trusted data parallels existing needs in the legacy financial markets, blockchain innovation creates an opportunity to build the data ecosystem for tokens from the ground up without replicating many of the inefficiencies and pain points that exist in the legacy financial world. Currently, the key questions include:
Disclosures. What kinds of disclosures should blockchain projects make when issuing or selling tokens?
Vetting. How can participants in token economies understand and evaluate tokens and the projects that launched them?
Regulation. What regulatory regimes do tokens fall within, if any?
Data sources. What trusted data sources exist for tokens and token projects?
Data structure. How can participants access structured, machine-readable trusted data to power enterprise-grade software systems for analytics, trading, and portfolio processing?
The good news is that a fair amount of critical data is already accessible and verifiable within the blockchain. However, some critical data is not captured in the blockchain and instead may exist (or not!) in a variety of unstructured, non-standard, and unregulated sources, including white papers, websites, blog posts, marketing materials, and other project or entity documentation.
In this way, the token ecosystem is replicating the problems that exist in the legacy financial world: once again, critical data is sitting in unstructured sources, and the community needs a trusted, machine-readable source of information.
The TruSet Solution
TruSet is building the foundation for structured, machine-readable, trusted, and accurate reference data for all blockchain-based tokens and token projects. This shared data set will be a resource for the entire crypto community. Both trusted and community-validated, this data can be used not only to power investment and trading analytics but also to facilitate the back office processing of portfolios where tokens represent investment products. For consumer tokens, community-validated data can help educate consumers about the tokens they use in dApps. By establishing this core data as the foundational source of truth about tokens and projects, TruSet has the potential to serve as the basis for product innovation in the emerging token-driven financial services ecosystem.
The TruSet token data ecosystem will bring together the publishers of data on token projects, a community of expert validators to review the data for accuracy, and the consumers who need trusted token data to intelligently invest, trade, and manage portfolios.
There are several benefits to the future members of the TruSet token reference data network:
Trusted disclosure reports. Token projects can publish their data for validation to provide a trusted disclosure report for consumers, investors, and regulators.
Crowdsourced error correction. The blockchain’s consensus mechanism enables marketplace participants to collectively identify and correct errors. Errors are corrected once for everyone.
Golden Record. Once the network has reached consensus that a reference data record is correct, it is recorded in the blockchain as an immutable, accurate, and trusted “Golden Record” of machine-readable data. A full audit trail of all changes over time is available.
Shared access. Every TruSet user can access the set of trusted, accurate records they need and feed it into their automated processes via APIs.
Rewards. Token data publishers and validators are rewarded for contributing to the growth and maintenance of TruSet token data.
Ecosystem growth. With trusted, accurate data, the token ecosystem can develop more robust and sophisticated analytics, processing software, reporting, and smart contract tools.
Trusted, accurate data is the foundation for all consumer, investment, trading, and portfolio management activity for blockchain-based tokens. As the blockchain ecosystem develops increasingly sophisticated dApps, software systems, and protocols, participants will need trusted, accurate data to power those applications and processes.
Consumer, investors, and regulators need information transparency in machine-readable, structured data models, and solution providers looking to create new types of smart contract based legal documents and derivative financial products need data to populate and update their smart contracts. TruSet will provide the foundation for the community to collect, verify, and share that data.
Every participant in the emerging token ecosystem will benefit from trusted, accurate token data provided by the TruSet marketplace, from token projects who want to promote their token sale to institutional investors building token portfolios to dApp customers who need to buy consumer tokens. The TruSet token data marketplace participants may choose to simply consume the data already validated by the community, or become contributors who not only consume data, but help generate, validate, and maintain it.