Qapita is a digital equity management startup operating in the private equity space. With offices in India and Singapore, the company helps organizations to manage their capitalization tables (cap tables) and ESOPs. They also offer a marketplace for private market transactions.
The Challenge
Qapita wanted to bring the issuers and investors into a unified ecosystem by setting up a Mirror Table on Blockchain. This would result in higher availability and access to alternative assets for payments. With this solution, Qapita wanted to create an ecosystem where ownership is verifiable and transferable, and the token ownership can provide a foundation to drive greater capital efficiency and entrepreneurship across capital markets.
The Solution
Persistent worked alongside Qapita to mirror cap table data onto a Blockchain and enabled tokenizing the equity shares. We developed an autonomous service that replicated and updated equity ownership data on the Blockchain along with other services to check transaction history and token ownership on the Blockchain. The ecosystem was built to support both browser-based wallet extensions and mobile wallets to interact with Smart Contracts.
Highlights of the solution:
- Cap table information stored on-chain would attract new investors and payment rails for the company.
- A seamless unified investor interface for the investor to efficiently manage equity and token ownership records for compliance purposes.
- A unified interface to create a relationship with issuers and gain insights into the cap table dynamics at each company.
- Bidirectional data synchronization between the current equity-based system and the tokenized equity ensures consistency.
- Availability of an immutable trace of all transactions, on a decentralized ledger spread across the world, improves reliability of the system.
- Risk and compliance checks were mitigated using Smart Contracts which reduced fraud while the system maintains the tokens under the same level of compliance as equity.
- Atomic transaction model for real-time settlement of both sides of the transaction.
With Persistent as their technology partner and System Integrator, Qapita ensured a smooth ecosystem setup based on Smart Contract technology. Simplified, ingenious, and efficient UX dashboards helped in administering and monitoring the cap table by issuers and investors. The ecosystem also enabled integration with ERC-20-based DAI Stablecoin to trade the tokenized shares.
The Outcome
The solution provided by Persistent facilitates trading-as-a-service for the tokenized shares in exchange for a digital currency (like a Stablecoin) and increases the visibility for investors. Popular web 3.0 wallets, including MetaMask, Alpha Wallet, and others can be used to interact with the application. The unified user interface provides a seamless experience for issuers and investors to view tokens and equity. The UX also provides efficient queries for the data stored on Blockchain and allows connecting wallets through the widely used ‘WalletConnect’ standard, enabling smooth integration with 300+ wallet providers.
