Cayman-Based Firm, Synthesis Bank, Launches the First Ever “Crypto Tokenized Investment Bank”
Ethereum-powered Synthesis Bank aims at revolutionizing the investment banking ecosystem through its blockchain-based service. The service includes its native STB token set to launch in July 2021.
The investment banking world is rapidly changing as investors look for better channels of diversification, better services, and faster processes to increase their returns. Amidst the changes, traditional investment banks also face challenges in regulation, capital funding, outdated techniques, and infrastructure and security issues.
According to a Deloitte study, however, one of the largest challenges to these legacy firms in investment banking is the disruptive fintech companies coming up. From saving up on costs to global customer adoption, fintech and blockchain companies are taking the forward step to offer retail and institutional clients new digital assets, infrastructure to enhance their returns and investment.
One of the leading blockchain-based investment banks, Synthesis Bank, aims to solve these legacy challenges traditional through a smart investment service coded in a smart contract.
Launched in 2020 by Alejandro Estrada, STB service was built to provide clients with an investment channel in digital assets and other new alternative financial products via a blockchain network. Estrada is highly competent in FX and financial markets having worked 12 years in the field for retail and institutional clients.
Touted as the “world’s first cryptocurrency tokenized investment bank”, Synthesis Bank manages clients’ funds using innovative techniques including dynamic positions, strategies, and market-making on its platform. Notwithstanding, the service leverages decentralized finance to increase client returns by investing in algorithm trading, liquidity mining, and arbitrage opportunities in the crypto market.
“The goal of this project is to eliminate the setup and operational costs imposed by middlemen in traditional funds while maximizing transparency and liquidity for investors,” a blog from Synthesis reads.
Synthesis employs an open-source protocol on Ethereum’s smart contracts to automate and enhance fund administration. The protocol aims to minimize human contact in deciding the investment strategies – optimizing returns for investors.
To maximize efficiency, the service includes its native ERC20 token, STB token, which represents a ‘virtual’ share of the bank. Holders of the token will receive incentives and monthly dividends based on the investment performance of the company. However, the shares do not give the holders any voting rights.
Of the total ‘realized’ profit every month, 50% will be “credited back to the token holder in USDT”, a statement on the company’s website reads. The remaining profits will be redistributed to Synthesis coffers to grow the assets under management (AUM) and fund ongoing operations in the bank.
To boost investment, Synthesis has also developed a mobile application – available on iOS and Android –providing a detailed portfolio tracker that increases transparency in its operations. The app also allows users to check the progress of STB token prices and dividends.
In conclusion, as the world of finance embraces blockchain-powered investment banks, more investors will be able to invest their funds faster with optimum returns, reduce the fees paid to middlemen, and enjoy secure and transparent investment models.
The STB token presale is slated to commence in the coming month of July 2021.