I agree with pretty much all of this.
Point #4 dismissing smart contracts should be reconsidered. One of the main benefits of tokenized securities is that you can program features into them. The most important feature is automated compliance and reporting — a security that can be trusted to travel the world and still meet its issuer’s compliance and investor qualification requirements, and halt trading when disclosures are required. Smart contracts are an excellent way to create such securities. They can be upgraded by the issuer, but they don’t need to be monitored 24/7. The other way to get this benefit is to have all of the actions on the security check back with a central oracle controlled by the issuer. That is simpler, but not as reliable.
The most important points are 5/6 — the killer product. Investors won’t buy security tokens in bulk unless they represent good investments. Currently, they don’t. The first crop is designed as a way to dump risky or overpriced deals on retail investors. Any new asset class has to make enable some type of deal that makes a unique contribution to capitalism. Junk bonds changed the debt market and created a whole new class of buyout deal. Cryptocurrencies exposed the value in open source software and communities of users. That was an amazing business model. Tokenized securities will make a different contribution.
I have looked closely at the prospects for securitizing VC portfolios (as mentioned by another commenter), and they don’t look good. There are many problems, starting with confidentiality and disclosure, and in the US, rules that outright prevent active trading in such poorly disclosed assets.
We are starting to see VC, PE, RE assets offered in individual SPVs with tokenized securities. The liquid, global fund structure that we build on top of that could end up replacing a lot of existing funds. It won’t look anything like the private funds we have today.