What is a Straato asset? Financial vs. Inherent Value

Our long-term goal is to trade equities on the Straato Market, leveraging our volatility encapsulation algorithm to create a new form of derivative. However, in the short-term, due to regulatory and liquidity hurdles, the Straato Market is exclusively for trading Straato digital tokens.

Straato tokens, or simply “Straato”, are not derived from hashing or proof of work/stake, they do not have a visual representation, and they are not stored on a blockchain. Instead, Straato are simply records in our centralized database, identified by unique codes. Straato assets have completely uniform properties and are not transferable or valuable outside of our Market platform.

The guiding economic principle beyond Straato tokens is simple: financial value is solely derived from demand. In turn, Straato gain value through speculation and from their ability to be traded in our Market (utility); the nature of the tokens themselves is secondary.

Let’s look at an example. Your house has inherent value in its utility, or the fact that you can live in it. However, unless someone else wants to purchase your house, you cannot extract financial value or liquid cash from it. Similarly, many equities trade at essentially random multiples, disconnected from fundamentals, with prices basically entirely driven by speculative demand. With this in mind, and considering that most common stockholders barely receive any share of bankrupt companies’ capital structures, most stocks really do trade solely off of speculation: fundamentals often inform speculation, but speculation ultimately drives prices. As such, Straato are not actually very different from equities at all: they trade based on supply and demand, with limited liquidity and speculation driving the Market system.

We believe that this way of thinking about financial value can serve as a catalyst for building a new, more accessible, and more creative trading economy, unlocking additional opportunities for all. We hope that Straato can help motivate the pursuit of this goal.