5 Ways of Tokenizing Traditional Assets
Traditional asset tokenization is inevitable and soon, it will be a reality. It will have a huge liquidity impact on a wide range of asset classes. The effects will be felt by both fiat and crypto economies. The basic goal of a tokenized economy is to make illiquid assets liquid.
Away from asset liquidity, tokenization is expected to reshape how the modern investor value and interact with their assets going to the future. Some of the illiquid assets set to benefit from tokenization include real estate, venture capital funds, currencies, arts, precious metals and sports teams.
Why Tokenize Everything? 
Using blockchain to securitize traditional assets is seen as making processes cost effective. Assets are turned to value in the secondary market in an instant. A security token is easy to own in the marketplace and this is the future outlook in the digital money market.
Owners of expensive assets can offer them in the market as digital shares. This makes it possible to tokenize everything. As a shareholder, it is easy to sell them online; the market is open at all times and there are not historical seasons. What’s more; the environment is secure, transparent and tamper proof.
Below are some five traditional assets that can be tokenized.
Venture capital Funds’ Tokenization
Tokenizing venture capital funds is set to make them more liquid and open the flood gates for more investors to put their stake on the assets class. This will reduce the waiting time investors have been putting up with. Remember, traditionally you wait for 5 to 10 years to get your returns.
The waiting time and the amounts required to invest in the sector have been prohibitive. However, with tokenization enabling fractional investment in shares, the adoption rate is set to skyrocket. Piecemeal asset ownership is easy and manageable.
Gold and other Precious Metal Tokenization
The precious metal industry has been hit by lack of transparency. However, with the use of blockchain technology, this will become a thing of the past. Investors will be able to ascertain the value of their precious stones.
With a blockchain based repository, traders will be able to access an equal playing ground when it comes to trading their precious stones. The repository will also act as the asset custodian and assets can only be release to buyers when some set conditions are met by the two transacting parties. With fractional ownership, more people will be able to participate in the precious stone industry.
Real Estate Tokenization
Real estate tokenization is a quick win for illiquid property owners. Most properties have a long term capital lock-ins and has kept many would be investors away. With tokenization, you can get funding very easily. Funder One Capital is one of the most respected experts in the real estate token funding.
Real estate is highly lucrative and tokenizing it will means the sector will be more trusted due to security checks thanks to blockchain. Once you purchase a fraction of a commercial property, you start to earn income almost immediately. The more you invest, the more you earn in the long run.
Luxury Car Tokenization
These assets are exclusively owned by the wealthy in the society. But tokenizing luxurious cars, more people are able to own part of the car. Selling these vintage assets does not need to be done in auctions; instead, it can be done online and payment done in digital tokens.
Investors can use part of their shares to trade amongst themselves and be able to build their portfolios. Only blockchain agents will be permitted to source, acquire, display and sell the cars. Once a vintage auto is sold, the proceeds are divided among the shareholders depending on the number of share on the sold asset.
Tokenization of Commodities
To reduce the costs incurred through the traditional supply chain systems, tokenization will not only lower the cost of products but will make them tamper proof with the consumer being able to track their product from production to the retailer.
This makes processes faster, secure and reliable. Many blockchain based Apps are set to benefit the investor and owners equally. However, commodity tokenization will benefit the end user as it will guarantee quality and originality.
