Germany’s most unique investment yet
I have talked about the flexibility of security tokens before — One of the strengths of STOs lies in their ability to finance single projects or ideas, like housing units, windmills, or ships. Now I finally have proof of concept: The Green Ship Token. Why is the Green Ship Token special? Well for one, it’s Europe’s biggest STO to date, with a hard cap of 50 million USD. Furthermore, the token comes with an 8% interest rate and profit participation rights, financing four bulk carriers. The token runs on Ethereum protocol ERC20 and there will be 50 Million tokens issued at 1$ each. Now, before this starts sounding like a sales pitch, let’s get into what this means for blockchain, digital securities, and ship financing.
Why did such a traditional company decide to issue security tokens?
Despite being over 130 years old, Vogemann has always prided itself on being innovative. Which is why Markus Lange, managing director states in the press release: “A security token offering is the logical extension of our financing strategy.”
Who on earth would buy not one, not two, but four new ships during a global crisis?
The timing for the huge investment is actually a lot better than global circumstances suggest: The price for handysize bulk carriers is currently favorable and there’s a shortage in the worldwide fleet since many ships of that size are getting too old and are thus no longer competitive. While the investment itself is deliberately anti-cyclical, Security Token Offerings have resisted and thrived through the crisis, making them the ideal investment vehicle.
The “Green” in “Green Ship Token”
To the delight of anyone who cares about the planet they live on, the new ships will already be compliant with 2029 regulations for CO2 emissions and are thus going to be the most eco-friendly ships can be(Without having sails), which is why Vogemann calls it the ‘Green Deal’.
Democratizing Ship Financing
All of this is especially impressive considering how far ship financing has come. Historically, ships were for a long time only financed by royals, governments, or incredibly wealthy individual investors. This doesn’t just include Columbus and Vasco Da Gama but even regular trade ships. In the 11th century, the Venetians invented the “Colleganza,” a contract between investors and merchants, allowing merchants to finance their voyages and rewarding investors and merchant for taking risks. The profits from such a voyage were split in a predetermined manner. This allowed a far larger part of the population access to the commercial shipping industry than ever before. The “Colleganza” is often said to be one of the forefathers of a stock company.
This method of financing, although hugely successful, died out when Venice became an oligarchy, excluding “commoners” from ship financing once again. In more modern times, ship financing is done through bank loans and large investors, creating the same problem, which is why it’s so exciting to finally democratize this process through blockchain technology. With a minimum investment of 1.000 USD, investing in ships is finally possible for private and retail investors.
The importance of the crypto world
While tokenizing four ships collectively worth 50 Million USD will certainly help to further establish the legitimacy of Security Token Offerings, that’s not the most important thing about this STO. The most important thing is that it’s a statement, a proof of concept: “Anything and everything can be tokenized.” If ships can be tokenized, what’s next? Windmills, real estate, natural resources? The sky is the limit. (Until someone tokenizes a spaceship)
If a company from 1886 can tokenize their assets, anyone can.