Facts about Asset Tokenization Every Investor Should Know
Ever imagined owning a piece of property or art a thousand miles from your home? Well, this might soon become a reality thanks to the tokenization of assets. With this blockchain backed technology, you are able to own a fraction of an asset. All you need is to buy the assets tokes which you can cash out anytime for profits depending on market conditions.
However, as an investor, you need to know the facts about asset tokenization before you stake your hard earned money. This will allow you make informed decisions and choose the right industry to invest in.
Security Tokens are Different from Cryptocurrencies and ICOs 
For the not tech savvy, security tokens are digitized traditional securities. These tokens will replace the physical paper stock certificates. The digital version is highly secured, easily transferable and fast in transacting. Everything is done online making transaction processes fast.
A security token investment enables you tap into the underlying tokenized asset. Simply put, you get a digital proof ownership which acts as your security. Tokens are more efficient than traditional shares and opens up your trading options globally with additional level of liquidity.
Token Compliance is In-built
Security tokens are backed by smart contracts which are coded with a program that enables them execute tasks once set parameters are met. These contracts are tools that determine how tokens are sold or sold in a compliant way.
Smart contracts ride on the blockchain technology which enables transactions to be traceable, transparent and immutable. If the smart contracts are well coded, it becomes hard for fraudsters and manipulators to hack the system.
This has been backed by Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC);
“Blockchain technology has incredible promise for securities and other industries.”
Additional Liquidity in the Market
One of the traits that make assets tokenization valuable is injecting additional liquidity in the global market. In a tokenized economy, assets are presented in fraction form. This makes it an easy investment option which can be traded in exchanges and the wider global marketplace; the feat traditional assets failed to achieve.
Any funds that are security backed enable investor easy exit. You do not require he services of a lawyer or accountant to transact on your behalf. You can seamlessly exit from the token to fiat economy without incurring extra charges.
Tokenization Improves on Traditional Securities
In traditional securities, middlemen tend to slow down the whole process of trading. Security tokens are efficient and there are no excel sheet formulas to bog you down. All systems are automated and there are no human errors whatsoever.
All processes use codes which track events like distribution, share splits and buy backs in the ecosystem. As an investor, you do not have to have experience to buy or trade in the digital tokens. Any profits you get are automatically added to your portfolio and a notification is sent to you.
Lastly, Tokenization is Trustless; all transactions are chronologically recorded in the blockchain. The records are immutable and open to the public. You do not have a third party to trust but the system only.
With tokenization, you are investing in a class of asset that has never been available traditionally. Whether you are investing in real estate, fine art or a celebrity, security tokens offers you a compliant platform you can trust.
