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This is a follow up [on my last post](https://www.reddit.com/r/wallstreetbets/comments/1omm40e/abaxx_technologies_newest_clearing_house_and/) here which goes into depth the possible value potential they have at a 50x to 100x.
A lot has happened in the last couple months so I thought I was worth to write another DD update.
**T+0 Collateral (Digital Title)**
The biggest and most exciting update was success of two of their digital title pilots with the other still pending, Currently industry values it at $0 so Abaxx is valued on the success of their exchange which on its own is worth tens of billions in my opinion as mentioned in my prior report. I believe digital title tech though is really what will drive Abaxx’s value. Cantor Fitzgerald sees it as a strong catalyst for the stock later this year when Abaxx can release their monetization framework since they were successful in the pilots but they maintain a price target of $81 CAD (+85% from here) for now.
[Cantor's Thoughts on Digital Title](https://preview.redd.it/ehvjv2ij2hjg1.png?width=758&format=png&auto=webp&s=d8c1fba53f106ad77c228165ec37ca14b1359c35)
**Money Market Funds Pilot Recap**
Abaxx was able to instantly create a transaction of a bilateral gold swap using $200k of BMO MMF funds held in a third party custodian as collateral while maintaining legally enforceable title. Normally this process would take a couple days. Because the title transfer can happen instantly, the original holder can keep it in place and still collect yield on the product. They are also in a better position to get less of a haircut on it because it moves much quicker. It basically increases the velocity of collateral in the financial system.
Abaxx is claiming their process can generate 1.5% to 2.75% in annual value creation across the $8 trillion worth of US MMF funds that exists in the world. Assuming they can get it into the hands of financial institutions. It's unclear how much they can charge but if you use 10 basis points (0.1%) as an example that would be $8 billion in annual revenue at the upper limit in just MMF funds. Which makes me point back to what Cantor said about the success of the pilots and how it will be a strong catalyst once they release their market strategy.
It is important to keep in mind they are the first to be able to launch this and have been working on it the past 5 years. The unique selling point with them is they are backed by their globally licensed clearinghouse and exchange which they built from the ground up. So they have a strong go to market strategy. Financial institutions connecting to their exchange for futures products would inevitably also be able to access these products as a cross selling product.
**Gold Pilot Recap**
It doesn’t just stop at MMF funds though. Their tech expands to even gold stored in a warehouses via a custodian. Their pilot with Ivanhoe Capital and Kilo Capital showed this. Using Abaxx Digital Title, Ivanhoe Capital was able to pledge their gold easily to get financing with Kilo Capital with gold stored at Abaxx Spot. Abaxx Spot held the gold and handled the instant settlement process via their Digital Title tech.
Ultimately what this does, is it unlocks all the gold stored in warehouses to be used much more efficiently as collateral as they can be margin called instantly compared to the typical multi day settlement process with industry standard methods. Abaxx is also taking this one step further though with their Minehub pilot to unlock commodities in transit as collateral as well. So if a LNG tanker takes 30 days to cross the ocean, owners could pledge that cargo instantly as collateral for futures trades on their exchange as long as its managed and tracked via Minehub.
The TAM for this would be the entire commodities supply chain ranging from oil, LNG, gold, to even copper which is valued at \~$135 trillion. I believe the value creation here is significant. Advance rates for LNG cargos is around 25-30% based on some rough research. What this means is if an LNG cargo is worth $45 million, they can often only extract maybe $13.5 million in terms of loan value. If Abaxx with their digital title and Minehub can help them extract $30 million or more, you would see around 50% in value creation across that use case. Scaled up, you could maybe see trillions unlocked in terms of collateral. How much Abaxx can charge for these efficiencies is still not know yet, but whatever the number, the revenue potential is insane.
**Exchange Volumes**
On to the exchange volumes they are seeing a steady increase in exchange volumes across the contracts which [you can track here](https://abxxtracker.streamlit.app/) along with the estimated revenue daily. Keep in mind, US customer onboarding lags so while they got access to the US market back in November via the FBOT, we are still yet to see the real network effects as more traders get access to the platform.
Liquidity continues to grow, with impressive quarter over quarter growth. Their physically settled LNG contracts are well on the way to benchmark status which would be worth billions on their own. Silver should be coming soon along with rare earths with hints at the first physically delivered uranium contract. The CEO has indicated their upcoming silver contract is expected to be even more popular than their gold contracts with many participants onboarding specifically for it.
The Corsia Carbon Contract has also seen a surge in activity and is becoming more active making Abaxx the benchmark for carbon futures contract as it is the only one with liquidity.
[Abaxx Exchange Volumes](https://preview.redd.it/hzy8zy773hjg1.png?width=1240&format=png&auto=webp&s=1640953ed484437c239f1493b464a353a6629087)
The volume and revenue generated may still be still small but it's important to realize these things scale exponentially. As volume grows, it draws more volume in. A liquid LNG contract would suck up all the JKM LNG trading volume for example. A liquid gold and silver contract would suck up hedging volumes and maybe even replace the New York Futures and London Spot system currently setup as Abaxx will have a futures and spot market with same size deliveries in the same jurisdiction at the source of the main demand in Asia. This effect will be even greater once we start seeing US firms using the contracts. To give you an example you can look at the NYMEX ClearPort as it scaled exponentially over the years in terms of volume. The chart here by [James](https://x.com/James_Duade) highlights this growth with the first years of volume rather low but then grew more than 10x the following year. If Abaxx is able to replicate this growth, they could be breakeven next year already based on the exchange only. Joe Raia who was behind the Clearport launch is currently in charge of Abaxx's contract launches so the team is stacked with industry veterans who have done this before.
[Clearport Contract Growth](https://preview.redd.it/bpn4xqci3hjg1.png?width=2342&format=png&auto=webp&s=6056631359347dca6084c57242c4ff4e1984f930)
**Other Updates**
Abaxx has received their FBOT from the CFTC back in November which grants them direct access to the US market. This was the final step in making them a globally recognized clearinghouse and exchange and work directly with customers around the world.
They have also been gaining steam on onboarding US customers. Just last week they announced access via TMX’s Trayport which will give 9800 industry traders access to their physically delivered contracts by end of next month.
They have also launched a couple wind futures contracts while also expanding the currencies they support on the exchange as collateral.
**Catalysts Ahead**
Abaxx is going to market with their digital title program with the backing of their licensed clearinghouse and exchange this summer. Maybe even sooner. This will likely drive significant interest to them.
Uplisting to major exchanges appears also to be in the works as well. So it's possible we see a that in the near future. The uplist will also bring along with it multiple index inclusions.
For those who like to look at charts instead to guide your investing decisions, it seems like there is a strong base at this level that has held steady for the past 3 months.
https://preview.redd.it/ck07nd9o3hjg1.png?width=1528&format=png&auto=webp&s=613fab2c22805891435a263d76ff99b4debbd6a4
Happy to answer any questions.
Positions:
I have maintained my position since last post at 9690 shares.
https://preview.redd.it/bbw7g6lc5hjg1.png?width=1836&format=png&auto=webp&s=8724da67e97b75beb5b0ae5945424096ae0cc2f6
https://preview.redd.it/g2epbm0h5hjg1.png?width=1964&format=png&auto=webp&s=5661d879e1215f6a5e1f4c1bf719925f4cbce1fd