Overview — AlphaPoint’s motto is “Making Illiquid Assets Liquid”, and the foundation of that strategy is the AlphaPoint Asset Digitization (APAD) platform. What that means is that APAD allows a company to tokenize “real world” assets and then make those assets available on a blockchain-enabled marketplace. This project was a multi-year effort spanning multiple phases generally tied to client deliverables.
Goal — To create from scratch a white-label a-la-carte suite of digital tools that allows for (1) the creation and management of tokens utilizing a popular blockchain protocol, (2) a marketplace to allow for investing in asset-based tokens, and then (3) an admin experience to manage users and companies participating in the market place.
The work presented in this case study is the culmination of 1.75 years worth of work from myself, a tech team of less than 10 developers, and 2 product managers (not concurrently). It was iterated on over many releases for client-specific requirements and general platform development. The image above showcases general patterns used throughout APAD.
- Creating and Managing Digital Assets
- Marketplace for Trading Assets
- Marketplace Management
- Storing and Transferring Assets
- Investor KYC and AML
- User Management
- Share Dividend Distributions
- Smart Baskets (Baskets of crypto tokens)
- White-label Customization
Project Context and Stages
The APAD project was built out in the three stages during my tenure at AlphaPoint. The first two phases were sponsored by clients with specific requirements. The first was LVSE (Las Vegas Stock Exchange) which focused on raising private equity for small companies. The second was Rainier, a company offering a broad assortment of tokens and crypto.
While it is great for AlphaPoint to get paid while developing the APAD product, having to dive feet first into specific use cases made it difficult to conceptualize the platform as a universal system. We were spending a lot of effort developing unique features that wouldn’t be useful for other clients. It’s safe to say that focusing on a solid MVP would have been immensely beneficial as we would have been able to test the concepts and clean all the bugs before launching the platform.
The third stage was when we were able to design APAD as a universal system. We took all the learnings from the first two client releases and created a plan for an MVP and relaunched the effort.
User Types and Tasks
As a generic white-label digital asset platform, APAD needs to provide for multiple use cases for a variety of asset classes and entities. The diagram above shows the different tasks that the main user types perform with the platform.
Breakdown of User Types:
- “Operators” – Run the exchange; help Issuers be successful
- “Issuers” – List and manage tokens; distribute assets to investors
- “Investors” – Invest in assets on the exchange
Depending on how the operator wants to set up the exchange, the roles can shift between operator and issuer.
LVSE: Functional Wireframes (Initial Low Fidelity User Interface)
The above screens are some of the low-fidelity mockups from the client LVSE. This particular project was where we really refined the functionality for APAD as a proof-of-concept. The time frame was short, so we focused mostly on business requirements and less on UI and performance.
Some innovations for APAD:
- Entity Types (Operator, Issuer, Investor)
- UI per user types
- Creation of asset tokens
- Offering assets on a exchange to be traded
- Admin functionality
- How the system works with the backend
- Onboarding requirements
- Network performance
- Cap Tables and Whitelists
White-label Marketplace for Digital Assets
It is probably best to start off by showcasing the main purpose of the platform. The primary function of the platform is to create a marketplace for digital assets that can interface with one of the major blockchain protocols. Once investors are onboarded to the platform, they can research the assets and then trade them with crypto and fiat currencies.
The main point of the platform is to sell assets to investors. Blockchain is viewed as an enabler for a new market of real world assets that are often niche and notoriously illiquid. To entice investors, all information must be provided to know what is being bought and why it is a good investment.
From the asset detail page, the investor can learn about the company listing the asset, download legal documents, and discover the value and activity of the asset.
Safe Wallet for Holding Digital Assets
While many crypto exchanges are buggy and have terrible user interfaces, thus diminishing trust, APAD is intended to be a safe place to store digital assets. Even so, the investor can easily transfer tokens out to a cold wallet that interfaces with one of the popular blockchain protocols.
Popular blockchain protocols:
Creating and Managing Tokens
The primary function of the platform is the creation of tokens and making them available to investors. APAD is intended to create niche tokens that represent uncommon/non-liquid assets. Often these assets cannot find a home on major exchanges and require alternative venues for availability.
The tokens can represent real world assets such as real estate, art, and sports cars. Tokenization makes it covenient for investors to access the assets at a variety of price points. Because high value items can be broken down into smaller units as tokens, people of different financial means can become investors.
The first step of token creation is for the Operator of an exchange to decide on what kind of assets they would like to list. Once that is decided, the operator can create a template that provides guidelines for how an Issuer should craft their asset token.
Types of information determined by a template:
- Blockchain protocol
- Contract type
- Asset type
- Information fields per asset requirement
- Off-Chain & On-Chain data
- Attachments to upload
Tokens are created by Issuers in order to list their assets on an APAD exchange. Tokens will need to include supporting documentation that attests to financial and legal validity.
Some of the data to be included for the creation of the asset token:
- Asset Type (this is the token template
- Information per asset requirements
- Attached documents such as financial, regulatory and legal documents
Once the token has been created, the Issuer will then have to mint a number of tokens. Once the tokens are minted, the token can be listed on the exchange.
Issuer/Operator View of Token Detail
From the Asset Detail screen, the Issuer and Operator can manage a token.
Some features of the Asset Detail:
- View performance and valuations
- Edit asset detail content and attachments
- View investor ownership
- Distribute tokens and dividends to investors
- Mint, burn or transfer tokens.
Many features are available to an Issuer and Operator for managing tokens.
- Mint – To create an amount of tokens on the blockchain. This also transfers the minted amount into the Issuer’s wallet on the exchange.
- Burn – To destroy the amount remaining in the Issuer’s wallet. Tokens distributed to investors cannot be burned.
- Transfer – A one-off transfer of tokens to another account or wallet.
- Distribute – To transfer tokens to multiple accounts on an exchange as shares or dividends.
- Clawback – To take back tokens transfered to an account on the exchange.
As mentioned, the users of an exchange are Operators, Issuer, and Investors. Depending on the way an exchange is setup, roles and responsibilities can shift within an organization with regards to Operators and Issuers. In terms of onboarding investors onto the exchange, there are many legal hurdles to comply with. Users will need different types of verifications regarding nationality, criminal background, and financial history. These verifications will change from one country to another. It is important for exchange Operators to learn the rules of the country where their business is domiciled to manage user onboarding requirements.
As mentioned, rules for onboarding investors will vary from one country to another. APAD has a set of templates that can be leveraged to verify users as they complete the onboarding flow. This will often require external services such as IdentityMind or VerifyInvestor. This means onboarding over a few separate sessions, requiring the user to check emails and return to the website several times. User flows were crafted to minimize the stress of the nonlinear flow brought about by the legal requirements and technical limitations.
Sample “VerifyInvestor” User Flows
VerifyInvestor is a external system that determines if investors in the United States are “accredited”. Legal requirements in the US demand that investors have this accreditation because digital assets can often be risky.
The flows shown here represent initial verification during onboarding through re-verification at quarterly intervals.
The various users and entities on the exchange are listed in a variety of formats depending on the context. Typically the users are listed within a table which will allow access to a detail view. The detail will allow the viewer to see user activity, user info, and permissions. From the detail, the viewer can modify user attributes.
Some of the contexts that users can be viewed
- Exchange Operators
- Issuers by Business Entity
- Issuer Admins
- Exchange Investors
- Investors by Asset
- Investors by Asset Whitelist
- Investors by Onboarding Stage
- Investors by Trades
The “Smart Basket” was one of the newest features of APAD towards the end of my time at AlphaPoint. The idea is to combine multiple cryptocurrencies and digital assets into a single bundle. Many other competitors such as Coinbase offer a similar product. Where AlphaPoint was the exception was the ability to add custom digital assets such as RABTs (real asset backed tokens). An exchange could offer private equity or real estate baskets, as an example.
Asset Overview and Smart Basket Detail View
The operator or Issuer can view a page that shows all the assets under their purview. The user can create or edit existing assets or view details for those assets. In the asset detail above, the smart basket is aligned to a custom index.
Create New Smart Basket
The creation flow for a smart basket is similar to creating a custom digital asset. The primary feature of the creation flow is to choose what assets go into the basket and then the percentages and number of tokens.
Rebalance Smart Basket
Over time the value of the custom digital assets and cryptocurrencies will change. This will alter the original proportional value for each asset under the smart basket. APAD provides functionality to help the operator or issuer rebalance the assets.
Investor View for Smart Baskets
The investor will find their smart baskets under their Portfolio section. They can then view details of the smart baskets — price performance, quantity of assets within the basket, and other miscellaneous details.
Redeem Smart Basket for Underlying Assets
If the user no longer wants to hold the smart basket tokens, they can with sell them on the exhange or redeem them for their underlying assets. The redemption process requires the operator or issuer to review and accept a redemption request. Once redeemed, the user will find the separate products in their Portfolio under the respective token wallets.
Designed and built a fully featured and modular asset digitization and exchange platform
Three Clients bought into the APAD suite, helping to prioritize and define functionality
The 3rd client, Elevated Returns built a final product representing digitized Real Estate assets.
Product was paused, but the technology has evolved into a forthcoming NFT Product
Focus of AlphaPoint returned to APEX