In-depth Integration of Crypto Assets and Traditional Finance — Will Hillstone Forge A Blockchain Version of Robinhood?
There has been a lot of ups and downs in the financial market, and market hotspots have changed again and again over time. The only thing that remains unchanged is that carnival and desolation always occur at the same time. As the total market value of the cryptocurrency industry continues to rise, traditional investment products such as stocks, funds, and securities have gradually shown a weak state.
People might say that a few years ago, market investors still had a wait-and-see attitude towards cryptocurrencies. However, these days, the vast majority of investors worldwide are already showing great attention and interest in the cryptocurrency market, which also suggests that applications for comprehensive financial trading are likely to become a rigid demand in the investment market in the future.
1. What is the era of comprehensive trading apps?
In 2015, a comprehensive trading application named Robinhood was invented. Unlike traditional stock trading applications, Robinhood allows investors to open savings accounts, purchase stocks, ETFs and cryptocurrencies through smartphones without any fees.
The innovation of Robinhood is not only limited to the reduction in transaction fees for users. More importantly, it combines the investment of traditional financial products with crypto-assets. Thanks to this innovation, Robinhood received support from a large number of small-capital investors. Previously, its prospectus showed that Robinhood had 18 million users, 17.7 million monthly active users, and $81 billion worth of assets under custody. Moreover, first-time investors accounted for more than 50% of its total users.
This year, after Robinhood submitted its listing application at the Nasdaq Stock Market, its valuation had exceeded 30 billion. In addition to the influx of small-capital investors, the substantial rise in the scale of cryptocurrency trading is also the main contributor to its increased valuation.
The success of Robinhood has also made the entire financial industry realize that the era of comprehensive trading applications has arrived — they will be integrating trading and investment of traditional financial products and crypto-assets. The continuous development of blockchain technology and expansion of the crypto-asset market indicate that the field of crypto investment will witness as well as create industry dividends.
Although Robinhood became the first company to gain a vested interest in the field of crypto-asset investment, some shortcomings have begun to appear lately. Just before it went public, Robinhood was snubbed by individual investors due to its ambiguous attitude towards them. After the IPO, its stock price had even fallen below the issue price. The company once known for its friendliness to individual investors faced push-back from small-capital investors.
However, Robinhood’s crisis means a rare opportunity for its competitive products. The market also needs integrated financial trading applications with a greater extent of freedom and stability. Recently, the trading platform Hillstone Finance (hereinafter referred to as Hillstone) has drawn significant attention from the market. Its internal business logic and product design are worthy of in-depth exploration.
It is well known to all that the circulation channels of most financial and physical assets with high investment yields are relatively enclosed. Due to their large scale and high investment barriers, coupled with the long liquidation cycle after investment, it is difficult to achieve timely liquidation of such assets.
Hillstone can perfectly solve this problem. It helps liquidate assets by providing loan products that use the future value of physical or financial assets as a guarantee, and allows small capital investors to join the game. At the same time, individual and institutional investors that do not want their capital to get stuck in investment products for a long time can also achieve asset liquidation through HSF (Hillstone Finance Token).
At present, market users generally speak highly of Hillstone. Can Hillstone actually disrupt the market of comprehensive investment trading platforms, since it claims to be able to solve the issue of asset liquidation?
2. Hillstone belongs to a wider range of investors
To understand what Hillstone can bring to the market, we first need to know what it is and what it can achieve. To put it simply, Hillstone is an asset liquidity platform based on smart contracts. According to its official definition, the original purpose of the platform is to liquidate various financial or physical assets, and to provide the public with rich, diversified and convenient investment and financing channels.
Hillstone’s product ecology mainly revolves around Investors, a virtual asset collateral pledge platform. Users can gain profits by staking assets guaranteed by Hillstone (such as risk funds, etc.) at Investors. At the same time, the cryptocurrency placed by the user in the staking pool of Investors can also be converted into HSF (Hillstone platform governance token) at any time, and the converted HSF tokens can be used to purchase staked products, thereby making the trading process of financial products more simple and efficient.
Admittedly, Hillstone is not the only product of its kind on the market. It has gained massive public attention mainly because of its parent company. Hillstone’s parent company is composed of M&A professionals across different Korean companies, and it is also the first professional M&A company in Korea. Its partners are a team of investment experts with more than 10 years of experience in Samsung Asset Management Dept., Merrill Lynch, Barclays, Mira Assets, Dashin Securities, KTB, and other financial institutions.
Meanwhile, Mr. Hwang Rayol, CEO of Hillstone Finance, has extensive experience in international private equity fund management, and is currently a permanent member of the Korean Fintech Industry Association. His key network resources include the “Samsung Princess” Lee Boo-Jin, the daughter of Lee Kun-hee, the most wealthy individual in South Korea; and CTO of Terra, a well-known blockchain project in South Korea.
Obviously, Hillstone possesses a wealth of capital, technology, resources, and experience that are far beyond its competitors. Its strong team will also become Hillstone’s biggest advantage in user competition in the future market.
In addition to its strong background, Hillstone has also created a new model in product design. Hillstone divides the core participants in its ecosystem into two roles: Users and Admins:
“Users” refers to those who use Investor. They can convert pledged products into HSF tokens via staking. These are relatively simple users in the ecosystem. “Admins” can participate in the management of Investor products and are responsible for setting a benchmark price for pledged products or cryptocurrencies. They play a key role in the ecology, and can determine the main state of Investor contracts.
The two roles created by the Hillstone platform can accurately match users in different states, lower the investment threshold for the industry, and allow all small capital investors to join and benefit from the game. And by creating loan products that use the future value of physical or financial assets as a guarantee, it can also provide users with higher liquidity for various assets, including fixed ones.
3. A financial asset operator with greater freedom
At present, although users have placed high expectations on the market of crypto-asset trading applications, the current landscape is not all that optimistic. In addition to the scarcity of products, most applications for crypto-asset investment have relatively simple functions and insufficient scalability. But on the other hand, the underdeveloped status quo of the market suggests that there are huge potentials in this field.
In addition to insufficient scalability, most of the current investment applications are also subject to many regulatory restrictions. For example, SPiCE, which was invented in 2017, is also a venture capital institution. At that time, it was the world’s first entity to tokenize securities for fundraising. According to Rule 506 of Regulation D, SPiCE can only have up to 99 professional investors in the United States. The full cycle of the fund is 7 years. When the fund maturity expires, the share of the token holder is repurchased at a specific price in combination with the income.
Since SPiCE’s funds are raised via token sales, various legal restrictions are involved. Therefore, it is only for professional investors, and cannot free itself from the limitations of the original LP-GP structure. Moreover, because the tokens represent the equity of the fund, it is impossible to invest in multiple fund products through one token.
In this aspect, Hillstone can achieve greater asset freedom. From the perspective of product logic, Hillstone does not only raise funds, but uses the received funds as a pledged product, which can address some legal restrictions. It can also be sold to general investors. In addition, as the token does not represent the equity of the loan product, but is stored in the protocol, it can also be used to operate multiple loan products.
It can be concluded that the birth of Hillstone has brought new ideas and directions to the market. Using the raised funds as a pledged product can not only overcome relevant legal restrictions, but also solve the issue of the cumbersome trading process for users, lower the threshold for their participation, and enhance the broader influence of the crypto investment field.
As the overall trend of the investment industry is leaning towards the ever-progressing cryptocurrency area, more products will emerge from the field of crypto-asset investment and financing. Financial assets will gradually become more liberalized under the influence of cryptocurrencies.
Robinhood predicted this trend and therefore achieved success. But the latecomers will create a new world in this area. Hillstone took a fancy to the same area in which Robinhood is, but the two are not exactly identical. Hillstone is an application that combines a strong team, advanced technology, and high scalability, which may bring the market a brand-new concept of crypto financial asset operation.
Follow Us:
Homepage: https://hillstone.finance/
Telegram: https://t.me/HillstoneFinanceGlob
Twitter: https://twitter.com/hillstoneFin
