The world of finance is changing. Going solo with only one broker or investing strategy isn't enough anymore. Sologenic (SOLO) is creating a new and diverse ecosystem that allows investors to invest in tokenized stocks, ETFs, and other assets. This network is built upon the XRP (XRP 0.19%) ledger, allowing investors to trade these assets using XRP or SOLO tokens.
The security token space is one to watch closely right now. Sologenic is a small, but growing project keen on gaining market share in this world. Over the past month, SOLO tokens have been 10-baggers for investors who stuck with the utility this token creates.
Here are three reasons why Sologenic is a decentralized finance play worth taking a look at right now.
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1. Sologenic is tokenizing traditional assets
Sologenic allows investors to trade tokenized stocks, ETFs, and other assets. In fact, more than 40,000 different securities are available for trading right now.
Sounds great, but as we've seen with other crypto networks such as Tezos (XTZ 1.25%), there's competition in this world.
However, Sologenic has come onto my radar for this network's "proof-of-solvency" mechanism. This is something unique to the Sologenic platform right now, but something I think will grow in adoption over time.
Essentially, this "proof-of-solvency" mechanism provides a way for anyone to audit the reserves of Sologenic, and confirm the value of their underlying assets. By proving the solvency of the digital asset holdings on this blockchain, investors can rest assured their deposits are safe on the Sologenic network. This transparency provides a level of risk management functionality many blockchains don't. And Sologenci claims user anonymity hasn't been impacted by this asset validation mechanism.
2. Sologenic is going to launch a crypto credit card
Cash back credit cards have provided tremendous growth to credit card providers, for decades. Sologenic hopes to bring this same concept to the crypto world.
Via SOLO cards, crypto investors will be able to spend their crypto as they would their fiat money in a bank account. Like other traditional credit cards, SOLO cards offer rewards of up to 2% cash back. Certainly seems intriguing, for investors with a big chunk of their net worth tied up in crypto.
There have been other crypto credit cards launched in the past. Sologenic isn't first to this space. However, given Sologenic's security token focus and the transparent auditing process this blockchain provides, many investors believe this network's credit card program could be a real winner.
In order for users to access a SOLO card, a certain amount of SOLO tokens are required to be staked or locked up. These staking rewards are likely to be linked to the rewards the card provides, though details are sparse at this time.
However, for investors looking at the SOLO token, more total value locked is always a good thing. Price stability for this token depends on user adoption increasing and supply remaining stable.
3. Sologenic is planning a major airdrop
One of the big buzzwords in the crypto space in recent years has been "airdrops." Sologenic is planning one. But what are airdrops exactly?
Essentially, airdrops are promotional tools used by developers in the crypto space to promote a project. Free tokens are provided to crypto users or investors of a particular network. One recent high-profile example of an airdrop was that of Uniswap (UNI 2.85%) in 2020. This airdrop provided $12,000 in free tokens to loyal users.
Recent reports suggest Sologenic is planning a massive airdrop. This airdrop will provide 200 million free SOLO tokens to those who hold XRP or SOLO, with the drop being split evenly among the two.
What's the catch? None, really. Investors simply need to buy and hold XRP or SOLO to earn these free tokens.
Unsurprisingly, in recent weeks, the price of SOLO has been surging, due at least in part to this announcement. As investors look for tokens with near-term upside, SOLO is one worth watching in this regard.
Final thought
Sologenic is a new project and faces stiff competition from established players. This is certainly not the first crypto project looking at tokenization and securitization. And the use of a massive airdrop for marketing purposes, while great in the near-term, suggests the demand for SOLO tokens may have been less-than-appealing previously.
That's not to say this crypto isn't hot right now. For investors and traders seeking short-term momentum, there's a lot to like about SOLO. Indeed, this is a token that's made my watch list for the reasons above.
Of course, investors ought to be overly cautious with position sizing and portfolio construction when it comes to the crypto space. This is a young, and fast-growing world, with likely a few winners and mostly losers in the long-term.
However, those investors looking for a more aggressive growth option in the crypto world may want to look at SOLO right now.