Magic Circle, a provider of STO solutions, today announced a strategic partnership with Nervos, the blockchain platform for Universal Applications, to make security token offerings (STOs) more accessible to small and medium-sized enterprises (SMEs). The two organizations will work to drive commercial adoption of tokenized digitized securities on Nervos, further developing technical and business standards as more enterprises look to access the capital markets via STOs.
As a natural bridge between the traditional finance sector and blockchain, STOs are becoming an increasingly popular way for private companies to raise capital outside of venture capital or private equity. STOs can provide a more transparent and efficient alternative to traditional financing methods, one in which investors receive a stake in real assets like financial bonds, company shares, physical property, and more. However, the complexity of STOs and the underlying blockchain infrastructure required to issue tokens at scale have prevented many SMEs from participating.
Under the new partnership, Magic Circle aims to streamline STOs for organizations of all sizes by driving the development of STO digital securities standards on Nervos, as well as the integration of digital identities and security token wallets. Having provided compliant STO solutions and tools for both digital securities issuers and investors, Magic Circle brings to the partnership a deep understanding of the biggest challenges enterprises face with STO adoption, which will help Nervos refine its STO-related business practices and ultimately attract more STO assets to be issued and traded on its network.
Kevin Wang, co-founder of Nervos, said,
“Magic Circle has a proven track record in helping its customers invest in STOs and trade flexibly in a compliant and convenient way, so we’re thrilled to partner with them as we bolster our network’s STO capabilities. Our unique layered architecture is anchored by our PoW-based permissionless chain with a major focus on value preservation, so STOs are naturally one of the strongest use cases on our multi-asset store of value blockchain.”
Magic Circle chose Nervos as its STO infrastructure partner based on Nervos’ underlying technology. Nervos consists of a set of compatible layered protocols with blockchain technology at the core: a public blockchain layer one protocol to ensure network security and decentralization, a layer two protocol to provide scalable transaction and computing services, and multi-application layer protocols to bridge business scenarios. The underlying design changes the blockchain paradigm from a world computer to a consensus automaton, storing consensus results on-chain and executing the computation process off-chain, fundamentally solving the scalability problem of the blockchain.
Doer Qu, Founder/CEO of Magic Circle, said,
“Nervos Network is a very innovative underlying public blockchain with a unique layered structure design and ease of use design that helps STO issuers and investors better experience the unique features of digital securities, especially in meeting KYC/AML requirements and asset compliance aspects of security, as well as user-friendly design. At the same time, Nervos and its eco-partners can provide more diverse application support. More importantly, Nervos also shares a common value vision with Magic Circle. We both believe that compliant digital assets will better help improve the efficiency of finance in the future and allow more people to conveniently experience, adopt, and invest in digital assets, promoting the democratization of finance with technological innovation and bridging the capital divide. Through the partnership with Nervos, we will also help innovative companies and startups issue digital assets more efficiently and in full compliance, enabling efficient capital raising and business transformation.”
Magic Circle has already helped several Chinese and international companies adopt STOs. Magic Circle has also developed and designed a complete set of chain-neutral STO compliance issuance platforms, compliance trading protocols, digital identity and ST wallet tools. Moving forward, Magic Circle will help Nervos establish partnerships with global compliant digital asset institutions and promote Nervos as the world’s leading issuance and trading infrastructure for compliant digital asset STOs.
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