Tokenization of Securities and The Future of Trading Made Simple

Introduction

The landscape of securities trading is undergoing a profound transformation, driven by advancements in blockchain technology and the emergence of tokenized securities. This evolution promises to address longstanding inefficiencies in over-the-counter (OTC) markets, offering enhanced liquidity, reduced costs, and minimized counterparty risks. Central to this revolution is Ohanae, a Web3-powered platform poised to redefine OTC securities trading through the integration of tokenization, payment stablecoins, automated market making (AMM), and Equity Token Offerings (ETOs).

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Understanding the Current OTC Market Challenges

While major exchanges like the NYSE and Nasdaq facilitate the trading of numerous stocks, a significant portion of securities are traded directly in OTC markets. These markets often grapple with inefficiencies, elevated costs, and heightened counterparty risks. The absence of centralized exchanges can lead to fragmented liquidity and opaque pricing, making it challenging for investors to execute trades efficiently.

OTC markets face three key challenges:

1. High Transaction Costs – The presence of intermediaries increases costs for both issuers and investors.
2. Lack of Transparency – Market participants often lack real-time access to order books and pricing data.
3. Counterparty Risks – Settlement delays and failures create counterparty risk and uncertainty.

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Ohanae's Vision: A Web3-Powered OTC Market

Ohanae is designed to offer a Web3-powered non-Reg NMS OTC market, specifically addressing the challenges inherent in traditional OTC trading. By integrating state-of-the-art Web3 technology within a permissioned blockchain framework, Ohanae seeks to deliver 24x7 liquidity with instant settlement of tokenized equity transactions while eliminating intermediaries.

How It Works

1. Tokenization of Securities – Traditional securities are converted into crypto asset securities on the Ohanae blockchain, ensuring full traceability and transparency.
2. Elimination of Intermediaries – Ohanae replaces traditional market makers and custodians with blockchain-based smart contracts, reducing costs and improving efficiency.
3. Equity Token Offering (ETO) – Issuers can raise capital by conducting ETOs on the Ohanae platform, offering tokenized equity directly to investors.
4. Automated Market Maker (AMM) – Ohanae uses an AMM model based on the Constant Product Formula to provide continuous liquidity and reduce spreads.
5. Instant (Atomic) Settlement – Transactions settle instantly on the blockchain, eliminating counterparty risk.
6. Payment with Stablecoin – Ohanae Coin (OUSD), pegged 1:1 to the U.S. dollar, ensures seamless and reliable transactions within the platform.
7. Unrestricted Exempt Securities – Ohanae facilitates the trading of unrestricted exempt securities, including Regulation A+ offerings, broadening market participation.
8. Integrated Digital Transfer Agent – Ohanae’s platform serves as an SEC-registered digital transfer agent, automating the maintenance of cap tables, tracking ownership changes, and managing corporate actions.
9. Private Key Protection with Ohanae Passphrase Recovery – Ohanae provides secure private key management, allowing users to recover their private keys using the Ohanae Passphrase Recovery feature, enhancing security and user control.

By eliminating costly intermediaries and ensuring instant, blockchain-based settlement of tokenized securities, the market stands to benefit investors of every stripe. Pending FINRA approval, Ohanae Securities, a wholly owned subsidiary of Ohanae, Inc., will facilitate primary offerings and secondary trading of Reg A+ securities, offering convenience, confidence, and transparency to both issuers and investors.

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The Role of Tokenization in Modernizing Securities

Tokenization involves converting traditional securities into digital tokens on a blockchain, enhancing transparency, liquidity, and accessibility. Ohanae platform supports Regulation A+ and Regulation D offerings with equity tokens or crypto asset securities, enabling companies to raise capital from a broader investor base.

Benefits of Tokenization

·??????? Increased Liquidity – Tokenization enables fractional ownership, expanding the pool of potential investors.

·??????? Lower Costs – Smart contracts automate key processes, reducing administrative costs by removing the need for intermediaries.

·??????? Global Access – Tokenized securities can be accessed by investors worldwide, enhancing market reach.

·??????? Regulatory Transparency – Tokenized securities are subject to strict compliance measures embedded in smart contracts.

By streamlining the fundraising process and enhancing transparency, Ohanae empowers companies to access capital more efficiently while offering investors new opportunities.

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Equity Token Offering: Raising Capital Through Tokenization

Equity Token Offerings (ETOs) are a key feature of the Ohanae platform, enabling issuers to raise capital by offering tokenized equity directly to investors. Unlike traditional IPOs, ETOs are more efficient, cost-effective, and accessible to a global investor base.

How ETOs Work on the Ohanae Platform

1. Issuance of Equity Tokens – Companies tokenize their common or preferred stocks on the Ohanae blockchain.
2. Regulatory Compliance – ETOs are conducted under the appropriate securities exemptions, such as Regulation A+ and Regulation D.
3. Direct Investment – Investors purchase equity tokens using Ohanae Coin (OUSD).
4. Instant Settlement – Transactions are settled instantly on the blockchain, reducing counterparty risk.
5. Secondary Trading – Once issued, equity tokens can be traded on the Ohanae platform through AMM-based liquidity pools.
6. No Intermediaries – Blockchain-based issuance and trading eliminate the need for traditional broker-dealers and clearinghouses.

Advantages of ETOs

·??????? Lower Costs – Reduced administrative and intermediary fees.

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·??????? Enhanced Liquidity – Equity tokens can be traded 24x7 on the Ohanae platform.

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·??????? Increased Access – Both institutional and retail investors can participate in ETOs.

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·??????? Transparency and Security – Blockchain-based records ensure full traceability and security.

ETOs democratize access to capital markets, enabling companies to raise funds more efficiently while providing investors with new opportunities for growth and liquidity.

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Automated Market Making (AMM): A Game Changer in Liquidity

One of the most significant innovations in the Ohanae platform is the integration of an Automated Market Maker (AMM). Traditional OTC markets rely on intermediaries or market makers to provide liquidity, which can lead to higher spreads and less efficient pricing.

How the AMM Model Works

• Liquidity Pools – Ohanae Securities as a dealer contributes to liquidity pools by depositing Ohanae Coin and tokenized securities.
• Dynamic Pricing – The AMM automatically adjusts prices based on supply and demand.
• Reduced Slippage – AMM algorithms minimize price slippage by dynamically balancing the pool.
• Continuous Liquidity – No need for intermediaries; liquidity is available 24x7.

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Ohanae Coin: The Payment Stablecoin

At the heart of Ohanae's ecosystem is the Ohanae Coin, a payment stablecoin pegged 1:1 to the U.S. dollar. This stablecoin facilitates seamless transactions within the platform, ensuring instant settlement and reducing reliance on traditional banking hours.

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The Future of Trading Made Simple

Ohanae is positioned to redefine OTC trading by offering real-time liquidity, transparent pricing, and global market access. The integration of tokenization, AMM, ETOs, and payment stablecoins ensures a frictionless trading experience while eliminating costly intermediaries.

Why Ohanae is the Future of Trading

·??????? Accessible to All

·??????? Instant Settlement

·??????? Lower Costs

·??????? Compliance and Transparency

Tokenization, ETOs, AMM, and stablecoins are transforming OTC trading. The Ohanae platform offers a secure, transparent, and efficient environment for trading unrestricted exempt securities, creating a market where opportunities are accessible to all.

Confidence. That’s Ohanae.