RWA Tokenization Platform IX Swap: A Bridge Connecting CeFi and DEX

Larry Fink, the CEO of BlackRock, believes that tokenization is the future of finance and a key market development direction, influencing other large financial institutions. Research shows that projects like Dusk Network and Ondo Finance indicate that real-world assets ( RWA ) are becoming an important part of the cryptocurrency industry. As of May 2024, the RWA market size has exceeded $6.6 billion, and it is expected that the asset tokenization scale will reach $10 trillion by 2030.

Recently, the World Federation of Exchanges published a paper on tokenization, calling it a natural evolution of finance. JPMorgan is also very active in this field, and Fidelity International is using JPMorgan's Onyx Digital Assets platform to tokenize shares in money market funds.

The custodial trust and clearing company recently completed a pilot test of fund tokenization technology and standards. Deutsche Bank has joined the Monetary Authority of Singapore's Project Guardian, which is a blockchain alliance that includes JPMorgan, Citibank, Bank of New York Mellon, UBS, HSBC, and others, aimed at exploring interoperable tokenized fund blockchain platforms.

As interest in blockchain narratives continues to grow, many projects are vying to become leaders in the field. Among them, IX Swap stands out with its unique approach and ambitious goals. IX Swap is a platform for tokenization of real-world assets and a decentralized exchange that facilitates the trading of security tokens through licensed custodians and broker-dealers. Its aim is to democratize investment opportunities in the private placement market and address the liquidity challenges faced by the tokenization industry.

Let's go back to 2017. As explained by Julian Kwan, co-founder of IX Swap, at that time if you were one of the top ten cryptocurrencies, you would receive significant market-making support and could afford to be listed on major exchanges. However, most altcoins were limited to basic listing platforms, lacking order books, market makers, or liquidity.

The emergence of Uniswap is a transformative innovation in the DeFi space, allowing anyone with two cryptocurrencies to create liquidity pools via smart contracts. This enables asset holders to earn fees and trade directly on the platform.

Today, with more assets being tokenized, the RWA sector faces similar liquidity challenges. IX Swap aims to be the Uniswap of the securities token space, allowing anyone with RWA and USDC( or other cryptocurrencies) to legally create liquidity pools. This facilitates the buying and selling of tokenized assets, addresses liquidity issues, and makes private market investments more convenient.

IX Swap Product Overview

IX Swap secondary trading product

Over the past decade, the capital growth of the private placement market has been stronger than that of the public market, especially since around 2016. In addition, the private placement market has also shown greater resilience in the face of emotional fluctuations. IX Swap aims to leverage these advantages by opening up the private placement market to everyone, providing access to assets that were previously unavailable.

The platform allows the trading of security tokens (STOs) and fragmented NFTs (F-NFTs), digitalizing traditional asset portfolios and providing access to real-world assets such as private equity, real estate, infrastructure, natural resources, and private debt. This is achieved through the provision of regulatory-compliant liquidity pools and automated market-making (AMM) functions. As a bridge between CeFi and DeFi, IX Swap facilitates transactions through licensed custodians and brokers, ensuring true ownership and claims to these assets.

IX Swap Launch Platform

The IX Swap launch platform is a crowdfunding platform that provides unique investment opportunities in promising startups. It allows investors to participate in tokenization transactions in sectors such as finance, blockchain, energy, technology, real estate, healthcare, and gaming.

Each investment opportunity on the platform is reviewed by the team to ensure the safety and reliability of the investment. The IXS launch platform complies with regulatory requirements, providing a secure investment environment, and uses security tokens to represent investors' equity, making transactions transparent and secure on the blockchain.

IX Swap's SaaS solution

IX Swap's SaaS liquidity solution enhances the liquidity of real-world asset platforms through automated market makers and liquidity pools. IX Swap connects security token issuers with liquidity providers by offering a subscription-based SaaS solution. The platform automatically matches buy and sell orders, ensuring the continuous liquidity of security tokens. This service utilizes smart contracts to facilitate secure and transparent transactions, making it easier for token holders to buy and sell tokens without significant price fluctuations.

The key advantages of this solution include regulatory compliance, ensuring safe and legal operations, and cross-chain compatibility. These advantages enable the solution to operate across different blockchain networks. IX Swap also provides comprehensive consulting and support services.

IXS Token

The IXS Token is the native token of the IX Swap platform and serves as the foundation of its ecosystem. Through an integrated deflationary mechanism, the IXS Token increases scarcity and value by incentivizing ecosystem growth and conducting buyback and burn operations. Benefits of using IXS include discounted fees, access to the IXS launch platform, and SaaS liquidity solutions. The IXS Token also serves as the native payment token for InvestaX, supports staking for rewards, and enables liquidity mining to enhance returns. Additionally, holding IXS Tokens will grant on-chain governance capabilities, allowing participation in the management of its ecosystem.

The following are the current market statistics for the IXS Token as of June 20, 2024:

• Market Cap:$121,211,081
• Fully diluted valuation: $124,855,283
• 24-hour trading volume: $1,624,331
• Circulating Supply: 174,746,266 IXS
• Total Supply: 180,000,000 IXS
• Maximum supply: 180,000,000 IXS
• Network: Ethereum ( Mainnet ), Polygon ( Bridge )

Advantages and Thoughts of IX Swap

Understanding of fractional ownership ###

Fractional ownership is often seen as a key advantage in increasing liquidity. It divides assets into smaller shares, allowing more investors to participate, thereby increasing the number of potential buyers and sellers and enhancing liquidity. However, fractional ownership is not a new concept; traditional financial systems have long offered partial shares. For example, services like Robinhood allow for ownership of fractional shares of stocks, or companies like Fundrise enable ownership of fractional real estate. Additionally, fractional ownership itself does not create demand; it merely makes smaller portions of assets available for trading. Demand depends on the value of the asset and market conditions.

IX Swap achieves fractional ownership through asset tokenization and simplifies the issuance and trading process via its decentralized exchange, potentially enhancing liquidity. While blockchain technology can simplify the creation and transfer of fractional shares, it does not automatically increase demand for the assets. Understanding the difference between fractional ownership and ease of issuance is crucial for assessing its impact on liquidity.

Compliance and Legal Considerations

According to legal regulations, some digital real-world assets ( RWAs ) and NFTs are classified as securities. This prevents IX Swap from trading as simply and without intermediaries as Uniswap. Security tokens must comply with laws involving broker-dealers and custodians.

This is why Uniswap is unlikely to list RWAs. When participating in the liquidity pool of IX Swap, RWAs are held by licensed custodians, not just managed by smart contracts. Wrapped tokens representing RWAs enter the pool and calculate shares. Such a structure allows IX Swap to bridge the gap between traditional finance and the decentralized world, providing a legitimate way to trade tokenized RWAs.

Therefore, although IX Swap cannot become a fully decentralized, universal, and permissionless protocol like Uniswap, this does not necessarily mean it is bad. Most markets still require a regulatory framework, especially for security tokens, and there are still many exciting opportunities within legal boundaries.

The advantages of IX Swap among major players in finance

Although large institutions are exploring tokenization, IX Swap enables more users to participate in this asset game by providing accessible services within the KYC framework. IX Swap democratizes access to tokenized assets, offering opportunities to small investors who may struggle in large institutions. Unlike traditional exchanges, on-chain trading on public chains is open to everyone, enhancing transparency.

IX Swap bridges the gap between traditional finance and decentralized markets, complementing the efforts of large institutions while expanding access to public chain technology. The growth of Uniswap demonstrates the demand from retail investors for cryptocurrency trading, and IX Swap aims to meet a similar demand for tokenized assets.

However, the question still remains: is there really a demand for these assets? Tokenization experiments like Galaxy Digital's Stradivarius violin are interesting, but the long-term sustainability of demand is still uncertain. It is questionable to assume that everything should be tokenized.

Team, Financing and Partners

The IX Swap team began working on developing automated market makers for the security token industry in 2017. The platform officially launched in September 2021, founded by Julian Kwan, Alice Chen, and Aaron Ong. Julian is an experienced entrepreneur in digital platforms and the blockchain space, Alice has a background in business and law, and Aaron focuses on capital markets and investment consulting.

Recently, IX Swap was acquired by InvestaX's parent company, which is a leading licensed tokenization platform in Singapore. This acquisition aims to enhance its capabilities, address liquidity issues in the industry, and expand its market presence and products.

financing round

First round of IDO (2021 September 7, 2021 ): Raised $186,165 at a price of $0.389 per Token on the OccamRazer platform, achieving a 2x return on USD investment. The pre-funding valuation was $70.02 million.

Second round of IDO (2021 September 8, 2021 ): Raised $100,000 on the Poolz platform at a price of $0.14 per Token, achieving a 5.56 times return on investment in USD. The pre-funding valuation was $25.2 million.

KuCoin IEO(2021 September 3, 2021 ): Raised $700,000 on KuCoin Spotlight at a price of $0.14 per Token, achieving a 5.56 times return on dollar investment. The pre-financing valuation was $25.2 million.

Private Placement Round (2021 June ): Raised $1.75 million at a price of $0.05 per Token, achieving a 15.55x return on USD investment. The pre-financing valuation was $9 million.

![IX Swap Research Report: The Bridge Between CeFi and DEX, the "Uniswap" of the RWA Track](