What Do We Know About Asset Tokenization?

Kutl Ahmedia

Asset tokenization is the creation of digital representations of real or imagined assets that are stored on blockchain networks. Each token for a specific property represents a certain portion of the entity. For example, Person A owns real estate in New Delhi. If this property were to be asset tokenized, its ownership might be divided into 100,000 digital tokens (or even more). These units might each equal, for example, 0.0002 percent of the total property.

By issuing tokens on a blockchain and allowing individuals to buy and sell them on other exchanges, tokenizing an asset can let its owner generate instant cash. Each token purchaser has 0.0002 percent ownership of the asset represented by an NFT.

An asset's liquidity may rise after tokenization. Instead of selling the entire property and eliminating its usability as a living space, the owner might sell 50,000 tokens.

What is tokenisable?

Everything can be tokenized, practically. According to a blog post by Hadera.com, these could be unusual items like sports teams, artwork, and celebrity memorabilia in addition to more conventional assets like bonds, commodities, capital funds, and real estate.

How to tokenize your assets

The owner of the asset must choose a cryptocurrency and associated blockchain to back up the token after deciding which asset to tokenize. We'll create smart contracts that prospective purchasers can agree to.

Plans for issuing the coin for market trade must also be set up, along with integration of crypto wallets. According to a Cronj study, Bitbond, ConsenSys Codefi, Polymath, and tZERO are some of the more well-known platforms for asset tokenization.

Since tokenized equities are frequently backed exactly by traditional stocks, holders can enjoy all the advantages of holding the underlying stock. On supported trading platforms, these can be bought with cryptocurrency or traditional currencies.

The global tokenization industry is expected to grow at a CAGR of 19.5% from $1.9 billion (approximately Rs. 15,648 crore) in 2020 to $4.8 billion (roughly Rs. 39,533 crore) by 2025. The practice of tokenizing assets has become more popular recently.

The first regional marketplace for tokenized stocks in Latin America was set to debut in July thanks to a scheme by the Brazilian fintech company BEE4. BEE4 will essentially mimic the layout of a conventional stock market while enabling traders to tokenize their initial public offerings.

Goldman Sachs had previously revealed plans to test the feasibility of tokenizing real-world assets alongside non-fungible tokens in April (NFTs).


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