Security Tokens 101, with Mike Lingle of Security Token Advisors & Rocket Pro Forma

Welcome everybody to this second Founder Institute VIP networking summit for October. We're now running these new private networking events regularly, twice a month. These are closed to the public, so they're just for you for meeting others from across the FI Global network, whether you're an alumni, currently enrolled founder. We might also be joined today by mentors and program directors. If you joined us early, you've already been networking or here in the Airmeet lounge, which is what we'll be doing most of today. So let's get kind of right through the event kickoff. First, my name is Dustin Betts. I'm a community manager at the Founder Institute. I'm calling in today from Pennsylvania, USA, but FI is a global network, so we're expecting to have founders joining us today from all across the world. Please introduce yourself in the chat. Let us know your name, your company name, your city or the country that you're joining in from today. And then when we go over to the networking portion, we'll have a feel for who's already here. And so yeah, without further ado, the agenda for today is basically each of these networking summits kicks off with a brief talk and AMA with one featured FI Global mentor or entrepreneur in residence. And today we're pleased to be joined by our special guest Mike Lingle, who's going to give a brief presentation on security tokens and then answer your questions about crypto, blockchain, and startup financing. And then after that, we'll move to part 2, which is the open networking. We have an optional worksheet on virtual networking best practices that you can download at bit.ly/vip- or /vip-networking. We'll drop that link into the chat so you can click it. But basically there's different options. You can do the one-to-one speed networking randomly matched, or there's some group video chat tables organized around different topics or geographical locations to network with others from around the world. Yeah, really brief housekeeping note about using Airmeet. It's a really great platform for this networking stuff. But if you're joining from a desktop or a laptop, it works best on Chrome or Firefox. And if you're joining from a mobile device, like a phone or an iPad, you really should use the Airmeet mobile app because you can see some of the presentation portions, but the actual networking stuff won't work for you on a mobile-based browser. So you need to be on the Airmeet app if you're joining via mobile device. Okay, yeah, and the other thing I just wanna mention up front, it's like our guest is here to answer your questions. So please do not be shy once we get started. Put them into the chat and we will answer them. So our featured guest, I'm thrilled to introduce Mike Lingle. He's a former software developer who's raised venture capital, started multiple companies. He's had an exit and he's run several accelerator programs. He's currently an entrepreneur in residence at Babson College and Founder Institute. He's also an advisor at Security Token Advisors, which is really the topic for today, and STA Security Token Advisors. They're an international blockchain consulting firm that help companies to leverage security tokens and run through the entire security token offering or STO process and kind of answer the question, what if we take crypto and make it compliant with regulations? So STA has been advising on STOs since 2017 and has a whole global network of partners, resources, and other vendors for their clients to leverage. Mike, I'm gonna turn it over to you and stop my screen sharing here, but please feel free to fill in anything that I missed out that you wanna mention.

Great, thank you for the introduction, and it's great to be here. I am a huge fan of Founder Institute, and I do a bunch of mentoring here. I also do a bunch of content development. I lost my voice, so bear with me today. And I also help startups with their financial projections. I have a project called Rocket Pro Forma, but I have a lot of interests. And I think today I'm going to talk about security tokens, which is a flavor of crypto. And I think part of what I like about it, like I'm a tech guy, but I've also learned finance. And whenever we start talking about crypto and security tokens, we're talking about sort of the intersection of finance and technology. And with security tokens, we had a third discipline, which is law. We're actually going to follow the rules here. So, um, Dustin did a good job of introducing me. If you have any questions or want to connect, I'm just mike@rocketproforma.com. You can also find me on LinkedIn. Whenever we talk about crypto, it's kind of like talking about politics or religion, so I am merely presenting an opportunity here. I love, uh, crypto. I hold crypto. I am not in any way disparaging crypto. And also, because we're talking about securities, nothing in here is a recommendation about investing. And that's what happens when we follow the rules. We have to say things like that. So quick review: Bitcoin is a cryptocurrency. They run on blockchains. The real— the two real innovations: one, they provide a public ledger So as opposed to what you see when you're running QuickBooks, there are two ledgers. Blockchain's got a public ledger, and they allow trustless transactions between people who don't know each other for real money, which is super cool. But cryptocurrencies don't represent an underlying asset. Bitcoin doesn't point to something. And the way Bitcoin was started was in a community that was intentionally trying to operate outside of the financial system. So all of crypto has this flavor of, we're going to work outside the rules and push the rules as far as we can. So we see things like Ripple, XRP, if you trade the token, is in a fight with the SEC. Just a couple of days ago, New York State ordered Nexo and another lending firm shut down. BlockFi is under fire for their lending product that has been deemed by several states to be a security. So we're running into this, right? And one of the things I'm always curious about— and actually, in this format, I can't really see you, but if you own Bitcoin, put it in the chat. I own some Bitcoin. I have owned Bitcoin on and off for for a decade now, or almost a decade. Who owns an altcoin? So something that's not Bitcoin, not Ethereum, but something else. I own some of those. And then who owns shares of real stock, right? So Apple, Tesla, whatever. And so these are all different types of assets. And the one I forgot to put here, who owns an NFT? I own a few NFTs as well.

Great.

OK. And so when we buy a Bitcoin, we're not buying a piece of the Bitcoin company, right? There is no real underlying asset here, even though Bitcoin has value and has increased in value. If you buy an altcoin like Chainlink, which I'm also a holder of, it does not represent ownership of the Chainlink company. You are buying this token. This token fluctuates in value, but there is no underlying asset. The difference when we buy a share of stock is that a share of Apple stock does represent a piece of ownership of the Apple company. So ownership of the Apple company is the underlying asset, which is also called the underlying. And the share of stock, a share of Apple stock, is a security. And what we're going to do is we're going to bring all this together in the next few minutes. So Bitcoins, Chainlink tokens, and shares of stock, shares of Apple stock, all share the quality that they are fungible. So if I have a Bitcoin and you have a Bitcoin, they have the same value, right? And we could exchange our Bitcoins and still have the same, each have the same amount of value. Same thing with Apple stock. If you and I shop, swap a share of Apple stock, it's the same value. So in true crypto fashion and in true technology fashion, people are innovating, right? So now we have this concept of NFTs, which are not fungible. So if I have an NFT and you have an NFT, they have different values, so we can't swap them as easily, right? So each NFT points to a different underlying, and right now those underlyings tend to be pictures and videos. They can be other stuff, um, and we'll talk about that in a second, but let's just go with pictures and videos. So here, uh, here is a Solana NFT. It's a ripoff of the Bored Ape Yacht Club on Ethereum, if you're familiar with NFTs. But these things trade for real money, right? 65 Solana. Solana is almost $200 today. So that's like a $12,000 price floor on these NFTs. So these are real assets and they're like very basic securities. There are some differences. And as of right now, the SEC has not classified them as securities, although the smoke signals and the tea leaves lead us to believe that the SEC may start treating these like securities at some point, and people are pushing the limits. So for those of you who watch Hulu, there is a rapper named Dave who has a show. He goes by the name Lil Dicky. He sold an NFT a few months ago that is the cash stream from the YouTube revenue of one of his songs. So he records actual songs as— and releases them on YouTube. So this NFT represents a cash flow, right? So that starts to push the limits a little bit because it starts to feel like a security, because you're basically relying on Dave's work to be successful and keep the cash stream going and maybe even improve the cash stream. Uh, also, as, um, Coinbase and FTX have launched NFT marketplaces Right. So we get this headline on October 13th. On October 15th, Solana NFT projects cancel holder royalties after FTX US launch. So what was happening was these NFT projects were trying to pay all of the holders a little bit of the transactions, a little bit of the transaction fees every time there was a transaction. But you've just created a security. So now that's getting shut down, right? You can do it. You just can't do it as an NFT. So This leads us to security tokens. They're— you can think of them like an NFT on steroids. They are actually a digital security. They are an investment contract. So it is like owning a share of Apple stock, and security tokens point to an underlying asset of some kind. And what they do is they flip the script, right? So what if we use blockchain in compliance with regulations? This is the new frontier. And again, this is where I don't want you to get mad at me. I love crypto. I'm totally cool with crypto. I've been holding it, investing for years. But there is an opportunity if we flip the script, right? And it doesn't take away from crypto, it just creates a new opportunity. So what if we use blockchain in compliance with regulations, right? So now security tokens are the definition of a security token is it's compliant with regulations. It unlocks what is actually a larger potential market, and I'll talk about that in a second. We can build some cool new stuff legally. We can invent some of the new products that we're trying to invent outside of the rules. And we can also protect against loss. Because it is a digital security, it has a digital cap table. And so when you take away some of the anonymity of blockchain, You can actually manage a digital cap table, and if someone loses access to their account or an account is hacked and someone tries to take the shares, you can use the digital cap table to just reissue the shares to the correct owner because you know who that owner is. So they're much more reliable as an investment. And so if we look at what we've just covered, crypto has typically no underlying asset. It may have utility. It doesn't mean you can't use it, but it means it's not pointing to an underlying asset, even though it has value. NFTs point to some kind of underlying art. And actually there's a cool project by Damien Hirst, the artist, where he's issued NFTs that actually point to real art. So he printed, he made 10,000 prints, put them in a vault, issued 10,000 NFTs. Each of the NFTs points to an individual print. You have a year to decide if you want to keep the NFT, in which case the corresponding artwork will be destroyed, or get the Damien Hirst artwork and the corresponding NFT will be destroyed. So people are doing some cool stuff. Security tokens can represent anything—stocks, bonds, cash flows. We're seeing a lot of real estate use, art, and with the cash flows, you know, we're talking about legal DeFi, right? So there's all kinds of cool stuff. So lots of different stakeholders here. If we're issuing security tokens, uh, one of the things we love is that we can reach out to the crowd, right? So we can do our crowdfunding campaigns, and I'll talk in a second about how it fixes something that was broken in crowdfunding. Two is with the digital cap table, we solve AMC's problem. AMC wants to give free popcorn to shareholders, but when you go to their site, you have to self-attest that you're a shareholder. AMC has no idea who their shareholders are. And we don't realize this because we're trading Robinhood, we're in Robinhood trading stocks on our phones. Cap tables are not digital. AMC has no idea who their shareholders are. Why do issuers love security tokens? Sorry, why do investors? I missed title. Investors love them because you get earlier liquidity. So if I'm invested in a private deal, I may be able to liquidate my position, sell my position in that private deal earlier than I normally would. So real estate is a big use case where people would normally be, early investors would be locked in for years or decades. They can now more easily sell their shares via tokens. Also with crowdfunding, crowdfunding's a little broken right now because people, retail investors, you and I come into these crowdfunding deals and we don't realize that there's not going to be liquidity for 5 years. So we're stuck with this, we're stuck in this investment. With tokenization, you can start to trade in and out of these deals, which lets the early investors have earlier liquidity, but also gives the rest of us access to these deals that were formerly private. So if we look on some of the security token exchanges, we see real estate, we see a crypto wallet, we see shares of actual Overstock.com shares. We see securities of the tZERO exchange. On Securitize, which is another security token exchange, we see a lot of VC funds. These are all various startup and VC funds that we normally would not have access to. All right. And regulators like security tokens because A, A, you have a digital cap table. B, you essentially get a CARFAX on every security. So even on OpenSea, I can start to see every transaction that's happened, which is great from a regulatory perspective. And 3, because of the public ledger of the blockchain, right? So OpenSea, if you follow the NFT world, one of their product managers was caught front-running NFTs that were being listed on the front page. He was caught by civilians, right? Civilians started looking on the blockchain, looking at the records and figured out that he was doing this. And so regulators now have help on the regulation. Super cool stuff when you start having public ventures. So we're in the very early stages of the security token market. And so cryptocurrencies are about $2.6 trillion market cap right now. NFTs are about $30 billion and security tokens are about $1 billion. So it is a super small market right now, but the potential security token market cap, if we can really digitize all equity, all debt, all real estate, all NFTs, all DeFi, right, and invent some new products, you know, it's over a quadrillion dollars worth of potential market cap. Right? And I'm actually not joking. I look at a lot of startup pitch decks and I don't see quadrillion-size market caps very often. But that's part of the reason I'm excited about this. So what can we do with them? I talked about fixing crowdfunding with earlier liquidity. Right? We can democratize opportunities. We can open up investments that were formerly private to people all over the world, including retail investors. And we can create new financial products. And so again, it's this combination. Security tokens are a combination of the law, because we're going to follow the rules, finance, and we're dealing with Wall Street level security finance, not make it up as you go along finance, and technology. And then technically, how do we do it? You need to create a legal entity, some sort of usually an LLC or a corporation. Put assets into the entity, tokenize the entity, create and manage a digital cap table, and then sometimes there's a lockup period depending on how you do this, and then you can start trading the tokens. Legally, there are exemptions that the SEC offers, like the Regulation Crowdfunding or Reg A+. A company, a crypto wallet called Exodus, just did a Reg A+ for— and they raised $75 million in a crowdfund and their token is now trading. Their security token is now trading. You have to decide sometimes between how you're approaching US versus international investors and also accredited versus retail investors. At the end of the day, you can get pretty much anything trading. You may just have a lockup period and you may have to approach it a little bit different. The opportunity is obviously in the public markets, right? We're going to need licensed finance professionals to handle that. But in the private markets, which have actually grown 4 times faster than the public equity markets over the past 2 decades, that is a tremendous opportunity, right? And that's us. We are startups in private markets. So we can finance ourselves and we can build cool financial products. When we think of buying stocks, we're on licensed securities exchanges like the NYSE and NASDAQ. When we're trading crypto or NFTs, we're on Coinbase, we're on INX, we're on OpenSea. There is no securities license. They are not technically— these are not exchanges. They have money transfer licenses, not securities licenses, and they are not broker-dealers. Security tokens trade on a third animal, which is a licensed digital securities exchange, or what's called an ATS, alternative trading system. Here are a few: tZERO and Seguritize, mostly in the US. Merge is international. There are others popping up all over the world. Oh, actually, this should be FTX, right? Sorry. Okay. So I know people have questions, so let me pop out of this mode and stop sharing. But that's the quick tour. And I think there's a ton of opportunity.

Go ahead. Yeah, thank you, Mike, for that presentation. That was super comprehensive and just about like the most understandable version of kind of an overview of all of crypto that I've ever heard, like very succinctly. So yeah, thank you for giving that presentation. I know some people ask questions here about if they can get a copy of this. Yes, we will send out a recording of this after the fact so you can take a closer look at some of the detail that Mike went by quickly in the slides. Yeah, we have some audience questions coming in. The first kind of question that I just want to kick it off is like, is there a type of founder or a type of company that you see as best suited to taking advantage of security token offerings? You kind of went through a bunch of different options around equities, debts, real estate, but is there a kind of like company maybe that's best suited to this in the early, as you say, we're like very early Yeah, yeah.

So I think there are two, there are two main opportunities. Crowdfunding right now, if you want to crowdfund and then provide this earlier liquidity, it makes your crowdfund more attractive than a standard crowdfund. And actually, if you go to like Republic, one of the crowdfunding sites, they have a section for companies that are going to tokenize, create security tokens of their crowdfunds. And I think The short story is anyone can do that. The long story is there are still some costs associated with that. So it works better, like if you're doing $1 million and under, it's probably too expensive right now. But if you're doing, on a crowdfund, you can go up to $5 million, on a Reg CF crowdfund, you can go up to $5 million. That probably makes more sense. And then what Exodus did was they did a $75 million crowdfund. The trick there is they had this amazing business, right? So it's a super valuable growing business and they had their own audience, right? So they had lots of people using their wallet. And so that brings the audience. We're doing a tokenized offering with one of our groups called Security Token Market. And we also launched into our audience and subscribed a million dollars within the first 13 hours or something. So bring your own audience if you want to do one of these.

Yeah, yeah. So we have some questions here.

And actually, sorry, let me say one more thing. I think the other opportunity is building financial products. So if you want to do things that are securities, if you want to do DeFi that is securities, security tokens are the place to do it.

Okay. Perfect. So first question here from the audience is from Jason. He asks, if you have a company that has issued shares and security tokens, you know, how do you value the company? He asks, does issuing the security tokens dilute the other shareholders? So can you have like this split? It sounds like what he's talking about, like there's already stock out there, but then you go and do a crowdfund after that. Does that work across multiple rounds or not so much?

You could do something like that. I mean, you need to talk to a lawyer, 'cause I am not a securities lawyer, but theoretically each round of a company's fundraising is different anyway. So I think it's okay to have a different structure. That being said, you may want to, and you can tokenize only certain batches of stock. So you could do that, or there's probably a way to reach back and give early investors a way to tokenize if you wanted to take that approach.

But I'm not a lawyer. Jason also has another question here. I think you touched on this just really briefly, a general cost figure. What is the general cost to crowdfund with security tokens?

It depends on who you talk to. Like we talked to Republic for security token market and they were looking for 6% of the raise in cash plus 6% in tokens, right, which we felt was really expensive. We ended up going with Securitize and we're the first tokenized crowdfund on Securitize and they offered us a much better deal.

Got it. Okay, I'm just going to keep going because our audience has questions here. Plus you have to pay your lawyers, right?

So there are some expenses just around Yeah, right.

Yeah, the legal expenses are separate from the actual tokenization cost. Um, question here from Vincent. He says, we considered putting phantom stock in a revenue share agreement on the blockchain, uh, to make them tradable. So I guess that the revenue share part, that sort of makes sense to me. He said, would it be possible to do this through NFTs? Would it be possible to pool liabilities to create a token that can be exchanged? I just read that more or less word for word. I don't know.

Yeah, so the short answer is probably. And really, if you think about company shares, and we sort of had this theoretical conversation, but I haven't seen anyone do it yet. If you think about a class of shares, right? So you have common stock in the company. Each individual employee's vesting schedule is essentially an NFT that is a smart contract that unlocks a certain percentage of equity at certain milestones. And the percentage that they are granted and their timeline are both parameters of the NFT. So theoretically possible, I haven't seen anyone do it yet.

Great. Okay, question from Chetan in—

And actually let me just say, But let me just say, it's probably easier right now. And again, I'm not a lawyer. It's probably easier to give people— and what we see a lot is people start these tokenizations as regular deals. So you do a funding round, regular fundraise, you grant options to employees, regular options. And then in the future, you give people the right to convert to tokens. So after a 6-month or a 1-year lockup, the investors who are holding shares and the employees who have vested their options and are willing to pay to own the stock, they can then convert at a later date. We're seeing a lot of that versus trying to get into the complexity of the tokens right off the bat.

Yeah, yeah, that makes sense. There's a couple of questions about real estate specifically. So Daniel asked, you know, what do you think would make— yeah, what would make a successful company that tokenizes real estate? Somebody else asks, is it possible to partially tokenize real estate? Assets like an apartment, for instance. Yeah, just thoughts on real estate and where that's at right now in this realm.

Yes. Okay. So a couple of things. Actually, this site just locked down, but Realty.co has been tokenizing Section 8 housing, which is genius because basically they're small deals. So it's like a $100,000 building. They tokenize it. They guarantee whatever, 10% income stream. And Section 8 is the rents are guaranteed by the government. So they've essentially built in their own insurance into this thing. And they are tokenizing these things. They've tokenized like 100 of these things. They sell out immediately. The tokens trade at a premium. They just keep cranking them out. So we're seeing some companies start portals like this. Uh, and then also let me just grab, uh, we're also seeing a deal in Miami. We're based in Miami, which has become like a crypto hub, so Realty is right up the road. And then, um, we are seeing— so there's another company here, uh, that is tokenizing a property here in Miami called The Thesis Miami. So it's a multi-use property. Again, they're doing it as a regular deal to begin with. So they're recapitalizing $75 million. Half of that is coming from private placement from accredited investors. Half of that they're doing on an accredited investor real estate crowdfunding site called CrowdStreet, partially to increase the number of owners, the number of people on the cap table. After a 6-month lockup, you have the ability— so it's a regular fundraise. After a 6-month lockup, those investors have the ability to tokenize, which creates early liquidity, allows other investors in. But it's a regular deal that will tokenize in 6 months.

Perfect. Yeah. Super interesting. Especially the Section 8 housing one, like you said, it's kind of has this built-in insurance for it with the government. Yeah. Yeah. Yeah. And it's a lot of opportunities out there.

Yeah. And real estate is usually the last to adopt something new and fun, right? Like they're like the last tech adoption. In this case, they're the first because All of real estate is about raising money from investors and all investors want earlier liquidity. So it's become a big deal in the real estate industry.

Yeah. One question here from Chetan. I think you mentioned both LLCs and C-corps, but he said, what's the most popular corporation structure that you're seeing in the US for security token offerings?

LLCs. Yeah, LLCs tend to be a structure that people use a lot, and a lot of times people will create special purpose vehicles that point to the LLC so that they can have a bunch of crowdfunded investors as one entity on their startup cap table versus like if you crowdfund from 1,000 people, you don't actually want 1,000 people on your cap table. You just want one shareholder, which is the LLC special purpose vehicle. And that points to the 1,000 shareholders. Also C-corps, depending again on what's going on.

Great. A question from Joseph is, if a company wants to go global, do they need to register their security in every jurisdiction to crowdfund, like with outside the US?

It depends on what you're doing. So the Reg CF, the Regulation Crowdfunding, offers two ceilings. There's a million-dollar ceiling and a $5 million ceiling if you do a little bit more financial reporting. Those allow unaccredited and accredited domestic and international investors without any limitations other than there is a one-year lockup period. So again, you're kind of, you do a regular deal and then tokenize a year later, basically. With the Reg A+, you also have up to 7— the reporting, and you do have to register with the SEC. That gives up to $75 million. Same thing, accredited, unaccredited, domestic, international. With some of the other exemptions, you may just be looking at either only international or only domestic. Again, lawyers can help with this.

Perfect. One question here from me is just like, are there common mistakes specifically for people who are approaching your advisory firm? Are there common mistakes that you see founders make with regards to their early approaches as they look at just blockchain-enabled fundraising strategies in general that people can learn to avoid by knowing them?

I think the biggest thing with crowdfunding whether you're tokenizing or not, is you really have to bring your own crowd. I think there's this thought that I'm going to throw my thing up on the internet and people are going to get excited about it, which happens every once in a while, but that's more like winning the lottery. The crowdfunds that work bring their own crowd, bring their own buzz. And I also think you have a few whales who step in minute one. You prearrange with some big investors and a bunch of smaller investors so that minute 1 of the crowdfund, a third to a half of the crowdfund is already filled. And that's what draws in the crowd. These things are very orchestrated.

Yeah, that's definitely something I've seen with just regular crowdfunding. Totally agree with that. And a kind of a similar question that I had about that, it's like, so you mentioned like, it depends, you don't necessarily have to raise from just accredited investors, but These securities are sort of more like an IPO in a sense, but there's no investment roadshow where these bankers are out there harking your thing to institutional investors. So it needs to be like, I guess, like you said, you have to bring your own crowd. But if you think, I was going to say, there's not a limitation like a B2B or B2C company. People tend to crowdfund more B2C because It's like a narrative that they can tell, like a compelling story to average consumers. But are there any hard and fast rules around— No.

And with the security token market crowd fund, right? So what the SEC did was they just changed the rules so that the ceiling's higher with the Reg CF, Regulation Crowdfunding. You can go up to $5 million, not $1 million or $5 million. And they introduced a test the waters period. So Security Token Market just launched the test the waters a couple of weeks ago, is in the test the waters period, and that creates an opportunity to see the crowd at work, but also creates some no-risk visibility, right? And so typically you'll see some larger investors, some VCs come in. Plus if you're doing well, you can reach out to some of the whales and say, look, You know, uh, whatever, we filled our— we filled our initial allocation within 13 hours. You know, do you want to come in either as part of the crowdfund or as in a private deal, right? One other mistake I see startups make: you need startup lawyers. Like, you need lawyers who specifically work— I mean, A, you need lawyers, or at least like one good lawyer, and B, you need lawyers who do what you're trying to do. Like, you can't use your family's lawyer who's never done startups before, right? So all of this requires some good legal work.

Okay, well, we'll do, we'll do a few more questions here. I don't know if we'll get to all of them, but I'll ask a couple more rapid fire if I can. So Vincent's asking if stock options or phantom stock agreements can be represented on an NFT. Is that a way to circumvent the regulation of security tokens?

I don't think so. I mean, anything you do around stock options or phantom stocks, you are dealing in a regulated industry. And I don't think you actually want to circumvent the regulations. What happens when you circumvent the regulations? If the SEC decides they care, they can force you to return all the money you've ever raised to all of the investors, right? So I don't know what goal you're trying to accomplish, but it's probably not worth the risk. And I mean, all startup stock options are regulated anyway. So why would you want to create a product that's not regulated? Yeah.

Yeah. The whole point of this is kind of not to circumnavigate regulation, specifically around security tokens. So yeah. So Steve is asking, if you look at current NFT platforms like NBA's Top Shot, A lot of these tokens are purchased with the intention of future value increase, which will likely be considered a security. So he says, how will the platforms get around that regulation, or are they going to all have to go the STO route eventually because of this, like, speculation?

I think eventually they're going to have to go the STO route, especially these ones that want to do this sort of multi-level marketing revenue share where all the holders participate as like a financial entity. Like you're in all this stuff, you are actually talking about securities. Um, and you know, especially with the front-running that was happening in OpenSea, there's just a lot of, um, there's just a lot of reasons the SEC is going to care, and there's a lot of money moving around right now. Uh, Muhammad, thank you for pointing out the broken link. I just posted a link to the hiring plan article that does not have a broken link, and I will fix that on LinkedIn. Thank you.

Cool, awesome. Well, I think I got to all the audience questions that we had queued here. This has been super, super interesting, Mike. I think I really appreciate not just the introduction basically that came before we really got into the meat of the STO, because I think for a lot of people who aren't— I'm not exactly a zero-coiner now because at least one of my robo-advisors has allowed me to differentiate, but I don't actually hold like any in a personal wallet. So for somebody like me who's been hearing a lot about this for a long time, I think you just gave a wonderful kind of, um, overview to, uh, to the whole crypto space for those like me who are coming from a bit outside of it. So yeah, just, I want to say thank you for that. Um, that's great.

I will— and I, I think there's going to be so much fun stuff built that doesn't— I mean, part of the, part of the cool thing here is like Yes, we can replicate all of the financial products out there, but as we're seeing in DeFi, we can start to build some stuff that doesn't exist yet. And I think that that's always my favorite part of tech is like, what's the new stuff that we haven't seen yet?

Yeah, me too. I, we didn't really get into this, but tokenization of other assets. I kind of talked to you in a brief email exchange or something about this notion of like farming basically and selling single season farm shares that there would be some kind of revenue sharing involved with that. So yeah, I kind of think like, Yeah, we're early stages, like you said. It's only like a, would you say, $1 billion market value now, but possibly up to a quadrillion-dollar total. Yeah. So yeah, it's very, very early days. Okay. Well, we're getting ready to switch to part 2 now, which is our kind of open networking session. So just quick reminder for using Airmeet, if you're on a desktop or laptop, we recommend you use Chrome or Firefox as your browser, or if you're on a mobile device, we recommend you use the Airmeet mobile app. Please try to be respectful of everybody's time in the group. Group networking tables. Be brief with your introductions and take turns speaking and asking questions. If you meet somebody, pro tip, that you do want to connect with further, make sure to search their name under the attendees tab and send them a direct message so you either exchange, you know, social links or contact information so that you don't lose each other after you make that new connection. And yeah, last slide is just to have fun. Yeah, we're really excited and happy to be hosting these private events exclusively for our FI Worldwide network, and hope that you'll enjoy the time after here to connect with others, and I will be out there and see everybody in the lounge. I want to say thank you again before we end this opening session to our featured guest speaker, Mike Lengwo, for the great presentation. Thanks, everyone.