The current generation we live in is evolving rapidly into a digital one. The emergence of cryptocurrencies and blockchain technology has disrupted almost every major industry. Many businesses have started adopting blockchain-based cryptocurrencies for their businesses because of the numerous advantages involved with it. One noteworthy business among these is the real-world assets industry.
The traditional asset industry involves many challenges, such as dealing with illiquid assets, long, tedious buying and selling processes, the involvement of intermediaries, climatic conditions, constant price fluctuations, and many more. This is where the term “Tokenization” comes into play. Tokenization of assets along with blockchain helps remove all these barriers and reshape the industry and the way investors value them, into a whole new level.
What is tokenization?
Tokenization is the process of converting asset values into digital tokens. The asset value is fragmented into different shares, as well as the ownership. These digital tokens can be sold quickly and efficiently to potential investors for multiplying profits.
These tokens are underpinned by blockchain technology, which is a globally distributed ledger. Blockchain technology helps safeguard the investors and asset information. Also, it records every transaction that happens with the tokens, by a chain of blocks coded with cryptography.
Why should you tokenize?
As discussed earlier, tokenization removes almost every major barrier that exists in the traditional asset industry and reshapes the business into a new level, which highly benefits the investors. To mention some of the crucial benefits,
- Greater liquidity volumes
- 24×7 market access
- Instant, Efficient transactions
- Quick settlements
- Fractional Ownership
- Blockchain Immutability
- User Transparency
- Elimination of third parties
- Reduced costs
- Improved legal compliance
- Enhanced security
Experts say that asset tokenization has gained huge traction among investors globally in recent years, especially in 2019, and is set to expand even more in the near future. If you want to be a part of this revolution, learn the seven types of assets you can tokenize and relish the fascinating business opportunities.
7 types of assets to be tokenized:
- Real estate
Real estate is one of the significant industries that is benefiting hugely from tokenization. Real estate is a massively spread industry and is always on demand. But the industry faces a bit of downfall due to the many challenges involved. By tokenization of real estate assets, investors can buy and sell fractions of properties and earn better profits from them. By tokenizing, they get easier access, lower transaction costs, and broaden their investment portfolios. Additionally, the high-volume liquidity is a huge benefit, especially for real estate properties for an efficient buying and selling process.
- Precious Metals
In the case of precious metals like gold, diamonds, silver, etc., tokenization helps investors to sell them in a more secure and efficient manner. Tokenization provides transparency to the investors with which they can properly analyze the metal value and set prices accordingly.
- Art and luxury objects (cars, etc.)
Blockchain-based Tokenization platforms provide a complete decentralized art gallery and provide easier access to investors for fine art projects. With this, investors can efficiently gain exposure for their art without having to go through physical preservation costs. Also, tokenization removes the auctioning process and allows buyers and sellers to conduct transactions between themselves directly.
With luxury items like cars, etc., tokenization enables fractional ownership through which users can buy a share of exotic cars without involvement from any intermediaries. The vehicles are displayed by verified agents, and after a holding period of 5 to 15 years, the vehicle is sold to distributed token holders.
- Venture capital funds
These assets are usually highly-illiquid. It usually takes about five or even ten years to get returns for their investments. But, by tokenization, investors are enabled with easier access to enter the market and buy and sell shares quickly and efficiently. The increased liquidity will also encourage more participants.
- Sport teams and celebrities
In this case, Tokenization helps with a decentralized marketplace for investors to invest in clubs and players, and offer them financial support for their career for future returns. Clubs can sell the rights to raise capital and sign players in the future for uplifting their team value.
Stablecoins are backed by the value of traditional real-world assets. They are specially designed to tackle price volatility. This is highly beneficial to investors. Investors can peg their stablecoins against such assets, precious metals, or fiat money and conduct an efficient trade process.
- Essential Commodities
The traditional commodities exchange system faces many challenges like increased prices, the involvement of third parties, lack of trust, etc. Tokenization, backed by blockchain, eliminates all these challenges and allows investors to trade at lesser costs, in a more secure, efficient way. The supply chain hugely benefits from tokenization based on blockchain technology and converts the business into a new phase.
Thus, the tokenization market is widely expanding and creating highly- rewarding opportunities for potential investors and newbies entering the market. If you want to be part of this uprising sector and obtain huge benefits for your business, tokenize your assets today!
All you have to do is, conduct massive research and choose the best and the most experienced tokenization company. Such companies will tokenize your assets with reliable implementations at cost-effective prices. So, choose your company today, tokenize any type of asset and multiply profits and benefits for your business.