Fairmint, the onchain securities platform, has surpassed $1bn in equity administered onchain for private companies and would like them to have the ability to directly list onchain.

Joris Delanoue, chief executive of Fairmint, co-founded the company in 2019 after experiencing the difficulties of adding members to the cap table, the documentation of a company’s equity ownership structure, in previous firms he had founded.

Delanoue founded Nexteem after discovering cloud computing. He said: “I was always trying to onboard more members to the cap table and it was extremely hard in Europe at that time.”

After selling Nexteem he joined the Singularity University in California in 2017, which accepts people working on projects that can potentially impact more than one billion people all over the world. His idea was to find a way to democratize access to private markets and he started to build an exchange for startups using traditional finance.

However, once he met Thibauld Favre, chief technology officer and co-founder of Fairmint, Delanoue saw the potential of blockchain.

“Thibauld started to explain blockchain and there was a huge analogy with cloud computing as a groundbreaking technology and as a massive market opportunity,” said Delanoue.

Processing $1bn onchain

Fairmint was launched in 2019 and operates as an SEC-registered transfer agent. In June this year the firm surpassed $1bn in equity administered onchain which it said signalled the growing shift from spreadsheets and legacy systems to programmable, blockchain-based cap tables.

“The world is gaining interest in what we do and firms understand they can do a lot more at scale using this technology,” added Delanoue. “We are at the same inflection point where I experimented with the cloud 15 years ago.”

Cap tables have traditionally been managed using numerous spreadsheets and siloed databases. Delanoue continued that moving equity onchain also makes it programmable using smart contracts to set up, for example, automated vesting and instant issuance or transfer. The platform also includes immutable audit trails and real-time compliance monitoring.

Delanoue said: “It took us years to process $20m and we accelerated over the last 10 months and we super fast to $1bn and counting. We are way above the $1bn now and this is a $6 trillion market opportunity.”

He explained that there were two inflection points for Fairmint’s growth.

The first is that Fairmint decided to team up with U.S. securities law firms to issue the Open Cap Table Protocol (OCP), an open-source infrastructure standard. The protocol enables any company or SEC-registered transfer agent, like Fairmint, to migrate cap tables onchain while maintaining full regulatory compliance.

“Once the industry decided to use this standard, our product is a no-brainer,” said Delanoue.

The second infection point is that the reputational risk of being involved in digital assets has been removed under the new U.S. administration.

Canton Network

In June this year joined the Global Synchronizer Foundation (GSF) as an active member and became a validator on the Canton Network. The foundation is decentralized and transparently governed interoperability service for the Canton Network, which enables financial institutions to participate in blockchain applications while maintaining regulatory compliance, data sovereignty, and institutional controls. The Canton Network ecosystem includes  Goldman Sachs, J.P. Morgan, BNY Mellon, Deutsche Börse Group, BNP Paribas, DRW, Cumberland, Circle and Digital Asset.

Fairmint said this positions the firm to port the Open Captable Protocol to Canton’s privacy-enabled institutional blockchain, opening new possibilities for participants.

Delanoue said private companies do not want to compromise their privacy by going onchain, so Fairmint started to look at privacy-enabled  blockchain architecture.

“Canton stood up,” he added. “The data, the source of truth, needs to be protected by a privacy-enabled architecture but can live on any other chain when there is a movement.”

Unlocking liquidity

Fairmint said the partnership with Canton unlocks the promise of regulated decentralized finance (DeFi) for equity markets.

Melvis Langyintuo, executive director of the Global Synchronizer Foundation, said in a statement that Fairmint is opening a new frontier for institutional blockchain applications and blurring the lines between private and public market.

“By bringing cap table infrastructure to Canton Network, they’re unlocking the equity markets for programmable finance, creating possibilities that will expand the overall network,” added Langyintuo. “This is the missing piece that enables investors and institutions to truly leverage their equity holdings in ways that were previously impossible.”

Private markets are not a liquid as public markets but Delanoue argued that pools of liquidity already exist, but are not being accessed.

“The pools of liquidity are in platforms like Coinbase, Robinhood and even Fidelity and all those players that are connected to national exchanges,” he said.

His vision is that blockchain can replace the traditional  intermediaries that a private company currently need to transfer equity.

“Companies should be able to go public through a direct listing on Coinbase, Robinhood or on any platform that allows them to be plugged into onchain settlement rails,” Delanoue said. “You don’t have to go through the process of traditional IPOs with multiple investment banks and intermediaries.”

Fairmint sent a letter in June this year to SEC chairman Paul Atkins and Commissioner Hester Peirce on a framework for blurring the lines between traditional and onchain finance. The letter addressed operational challenges encountered in private securities administration including infrastructure standardization, a non-custodial broker-dealer framework and direct settlement architecture.

“Each point provides concrete implementation steps the SEC can execute under existing authority, focusing on strengthening oversight while enabling technological innovation,” said Delanoue.

He continued that Fairmint is actively working with partners regarding onchain IPOs, which may happen in months.

“We could even see a consortium of partners that would like to coordinate the effort to make a big splash on building the first onchain  IPOs,” he said.