Asset Tokenization: What can be tokenized?
It is no doubt that the world is inclined towards asset tokenization. However, many asset owners are not sure of what can be tokenized and what cannot. Currently a large portion of global assets are represented in paper. This makes them illiquid and tokenization is the game changer; converting the illiquid asset to liquid ones.
The entry of blockchain has seen the shift from analogue to digital systems that are faster, secure and immutable. With increased liquidity in the market place, it becomes very easy to convert assets into cash in a few seconds; a feat tokenization is set to achieve.
Why Asset Tokenization?
Tokenization rides on blockchain backed security tokens. These tokens securely represent the real world assets. Simply put, converting your assets into digital tokens means you can change these into cash when the market are favorable or when you really need real cash.
Security tokens are just like the traditional stocks; the only difference is they are in digital form. However, tokenization gives investors the ability to “own part of an asset” as opposed to the “whole”. What’s more; blockchain is structured to reduce transaction cost riding on an immutable platform which records ownership details.
Asset tokenization removes middlemen through use of smart contracts which also make transactions legally viable. With the process, ease of dividing assets is achieved which lowers the cost irrespective of where you are located across the globe.
Which Assets Can be tokenized?
It is true that any illiquid asset can be tokenized. Tokenization is an enabler in real world asset trading. The growth of Security Token Offerings (STOs) is a clear indication that there is potential in the crypto sphere. As long as investors are focused on liquidity, the token economy uptake is set to skyrocket.
With blockchain and tokenization, it will be able to anything from what their favorite team earns or a piece of building from anywhere in the world. Any asset that can be placed in the way of liquidity will be able to get tokenized.
Who can join the Tokenized Economy?
With the fractional asset ownership, anyone can participate in the token economy. In fact, it is seen as the entry point for many crypto investors. You do not have to have a huge digital asset portfolio to enjoy the benefits of tokenization.
Unlike in the traditional financial sector, tokenization comes with easy and fast funding options. This benefit ordinary people willing to invest and you can invest in small bits as you build your portfolio in the digital money market. Tokenization is a positive influencer when it comes to crypto adoption.
Whether you are a property owner in the real estate sector, a fine artist or celebrity, tokenization is the future. With increased liquidity in a secure and immutable platform, many users are poised to interact and build their crypto portfolios whilst accessing easy funding for business or personal development.