Automated Post-Trade by Tokenovate
Last updated
Last updated
PROJECT OVERVIEW
Product: A platform for Automated Post-Trade
Company Name: Tokenovate
Website URL:
Industry: Capital Markets
EXECUTIVE SUMMARY
Tokenovate is a post-trade automation platform for derivatives and SFTs. Our unified, data-agnostic solution ensures seamless transaction processing across all asset classes, products and market infrastructures — no matter what you trade or where your assets are held. By operationalising and embedding the Common Domain Model (CDM) directly into our technology stack, we harness the power of the BSV Blockchain, smart contracts and tokenisation to drive automation, interoperability, and efficiency across capital markets.
ABOUT TOKENOVATE
Tokenovate was founded in 2022 by Richard Baker and Gerard Banaszkiewicz with a vision to automate post-trade processes in capital markets. Today we operate from two UK offices: Cambridge for product and engineering, and London for sales and marketing. The idea for Tokenovate began 20 years ago when Richard and Gerard first worked together in the telecoms industry.
In 2010, Richard launched ClearTrade Exchange, a regulated futures market platform for commodities, which was acquired by European Energy Exchange AG in 2016. Meanwhile, Gerard ran a successful consultancy managing multi-billion pound projects for clients like RBS, HMRC, Vodafone, and BP. In recent years, initiatives like ISDA’s Common Domain Model and advancements in blockchain technology have reshaped derivatives trading. Recognising these changes, Richard and Gerard reconnected in 2021 and saw a chance to enhance operational efficiency in the derivatives market, leading to the birth of Tokenovate.
INDUSTRY CONTEXT
Problems & Challenges
Tokenovate increase efficiencies in capital markets by automating post-trade management of the lifecycle of derivatives and SFTs.
The Tokenovate platform integrates smoothly with existing trading systems, digitising the post-trade workflow and delivering genuine end-to-end benefits. The platform comprises several core components that bridge the gap between legal contract formation and trade execution.
Tokenovate is a cloud-based, multi-tenant SaaS solution developed with an API-first approach. Leveraging the inherent privacy and permission capabilities of a public UTXO-based blockchain, Tokenovate ensures security, compliance, and enhanced connectivity across capital markets.
The Tokenovate platform combines three key components:
1. Unifying Trade Data
Today, trade data is fragmented across multiple - often siloed - databases managed by various parties. Manual processes introduce errors, while synchronising data is complex, leading to significant maintenance costs.
In contrast, Tokenovate’s platform provides a unified, standardised, on-chain representation of trade data that serves as a single source of truth for financial transactions.
The platform seamlessly converts trade messages from any format into the industry-standard Common Domain Model (CDM), ensuring data consistency, eliminating errors, and significantly enhancing interoperability.
By consolidating trade data, Tokenovate delivers transparency, accuracy, and efficiency, ultimately streamlining and simplifying trade operations.
Key benefits of unified data:
Single Source of Truth: the unified trade data serves as the single source of truth for all transaction data, ensuring consistency and accuracy across the board.
Standardisation: Adheres to industry standards such as the CDM, providing a common language and framework for representing financial products and their lifecycle events.
Immutability: Once recorded on the blockchain, the trade data cannot be altered or tampered with, ensuring the integrity of transaction data.
Automation: Capable of being updated in real-time as post-trade lifecycle events occur, maintaining the most current and accurate information.
Tokenisation: Provides a critical foundation for tokenisation by ensuring digital tokens accurately represent their corresponding real-world assets and facilitating seamless integration with blockchain technology.
2. Unifying Rights
A significant challenge facing today’s financial industry is the manual updating of contractual rights actions, such as rate resets, novations, and terminations. These manual processes frequently lead to delays, errors, and increased operational risks.
Tokenovate resolves this challenge by unifying, orchestrating and automating post-trades rights management. Our platform embeds contractual rights and obligations directly into digital, composable workflows, removing manual inefficiencies and enabling scalable, smart-contract-driven processes. Lifecycle events are automated consistently with underlying contractual terms, ensuring accuracy and reliability.
Through unified rights management, Tokenovate provides an intelligent platform that simplifies complex product workflows and risk management procedures. Automation significantly reduces operational risk, enhances scalability, and ensures consistent, reliable performance, enabling seamless straight-through processing of financial transactions.
Key benefits:
Integration of industry recognised agreements: supporting legal relationships between entities trading derivatives and SFT products.
Automated workflows: embeds contractual rights and obligations into automated, composable, workflows.
Reliability and consistency: aligns commercial, legal, economic, and operational standards.
Reduced operational risk: streamlined workflows and increased automation enable more efficient and effective risk management.
3. Unified Settlement
Today’s financial industry suffers from slow, inefficient asset transfers and dependence on multiple intermediaries, leading to increased costs and operational complexity.
Tokenovate addresses these challenges by automating payments and deliveries through legally robust tokenisation structures, enabling secure, near-instant collateral transfers. By tokenising assets and processes, our platform achieves frictionless, real-time settlement and enhanced collateral mobility.
Integrating a tokenised payment framework, Tokenovate ensures atomic settlement and automated collateral management within established industry standards, enabling efficient, reliable, and immediate settlement across diverse financial products.
Key benefits with unified settlement:
Unlocking liquidity: tokenised assets and enforceable rights enable real-time value transfers.
Sustainable growth: paving way for a more inclusive and resilient financial ecosystem.
Legal certainty: robust regulatory compliance and alignment delivers clarity and a trusted mechanism streamlining settlement and collateral management.
Integrated payment framework: tokenisation enables atomic settlement across financial products and collateral processes.
PROBLEM STATEMENT
Global financial markets are at a crossroads. Burdened by inefficiencies that immobilise trillions in capital, inflate costs, and limit access to opportunity. Fragmented systems, manual processes, and settlement delays, together costing the industry billions of dollars annually, eroding trust, stifling innovation, and slowing economic growth. These are not just technical flaws - they are systemic barriers preventing the financial system from serving society, from driving shared prosperity, resilience, and inclusivity.
The industry is at a unique inflection point. For the first time, legal, regulatory, commercial, and technological standards have aligned, creating the conditions for transformative change. Legal frameworks now support blockchain, smart contracts, and tokenised assets. Standards like the FINOS Common Domain Model (CDM) enable interoperability and operational standardisation. Clearer regulatory pathways and scalable technologies provide the foundation for a bold reimagining of financial markets.
This convergence presents an unprecedented opportunity to address the systemic inefficiencies that have stunted financial markets since the 2008 financial crisis. It’s a chance to reimagine a global financial system that is transparent, efficient, and inclusive - one that fosters trust, drives innovation, and unlocks new avenues for growth.
Imagine a world where every financial asset, process, and transaction operates seamlessly within a unified network. Capital moves without friction, trust is embedded into every workflow, ownership is distributed rather than centralised, and opportunity flows freely across global markets.
This is the promise of Tokenovate.
Limitations in taking a traditional approach with legacy systems:
Numerous, including manual processes, paper-based solutions, siloed databases, incompatible infrastructure, error-prone reporting to name a few.
WHY BSV BLOCKCHAIN?
In order to meet industry requirements for scalability, security and cost efficiency, we decided a public permissionless blockchain was the only viable long-term choice for these key reasons:
Decentralisation
Transparency and Trust
Network Effects
Permissionless Access
Security through Consensus (Proof of Work)
Lower Entry Barrier
We concluded that the UTXO-based BSV Blockchain addressed all of our key DLT related challenges:
Highly scalable due to Teranode architecture of network - 1 million TPS
Low transaction fees - 1 satoshi per kb of data (fractions of a cent)
Coinbase usage for providence
Derived Encryption Keys
Merkle Trees for data on chain
BSV features used
Smart contracts
Tokenization
SOLUTION ARCHITECTURE
Tokenovate's platform is a cloud-based, multi-tenant SaaS solution designed using a scalable, API-first architecture.
At its core, it utilises the BSV Blockchain, a public UTXO-based blockchain, where Unspent Transaction Outputs (UTXOs) serve as secure data representations locked cryptographically. Tokenovate uses Coinbase as the source of UTXOs, maintaining a clear record (provenance) of all transactions. Cryptographic keys, securely managed by a Thales Hardware Security Module (HSM), leverage BIP-32 hierarchical deterministic wallets based on elliptic curve cryptography (secp256k1), ensuring each UTXO is uniquely secured without ever reusing keys.
The platform supports multi-signature blockchain transactions for additional security. Tokenovate also employs Merkle trees to generate proofs of data integrity, embedding calculated Merkle Roots within the UTXOs, thereby providing verifiable, tamper-proof records of transactions and data on the blockchain.
IMPLEMENTATION
Development and deployment timeline
18 months from start to version 1. We're now on V2, to be deployed in H2. (last updated, 31 March 2024)
Milestones, funding rounds, partnerships
In May 2023, Tokenovate enabled the execution of the world’s first smart legal contract for voluntary carbon credit derivatives trades using ISDA definitions using BSV Blockchain based smart legal contract powers successful trade execution and settlement.
CHALLENGES & LESSONS LEARNED
As always when you tackle large and complex transformation projects a key challenge is to convince the market that much of the current technology is not fit for a digital-first future. The initial reluctance to embrace a public blockchain was also challenging, but we are pleased to note that the perception and acceptance of public blockchains now is growing fast across all aspects of our industry.
The way we have implemented privacy on BSV is unique - a potential game-changer for our industry.
FUTURE PLANS
The vision to automate post-trade is a long-term project. To embed our unified, data-agnostic solution for seamless transaction processing across all asset classes, products and market infrastructures — no matter what you trade or where your assets are held - will take time. This year we are adding support for more asset classes as well as extending how CDM works for lifecycle management.
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