Investing in Asset-Backed Tokens

by | Sep 11, 2020 | Token | 0 comments

The concept of fractional ownership of real-world assets is not new. Consider stock certificates, timeshares, mutual funds, and many more. The tokenization of assets brings simplicity, transparency, and liquidity. Although it may sound incremental, it is actually the future of finance since it opens up markets to everyone.

Asset-backed tokens are a revolutionary way of investing in existing businesses and start-ups. These tokens are an alternative to the traditional stocks, with one big difference- investors can buy stocks in form of tokens from any part of the world, without the need to be physically present to execute the transactions. On top of that, asset-backed tokens are very liquid and facilitate the buying and selling of corporate shares with ease.

Security Token Offerings (STOs) replacing Initial Public Offerings (IPOs)

Asset-backed tokens function in a very similar way as IPOs. STOs are used to fund start-ups and give investors an opportunity to invest early. Hence, asset-backed tokens provide a percentage of digital ownership of an immutable, liquid, and trustless representation of company debt or equity. With the help of blockchain, investing in asset-backed tokens is easier and more accessible than ever.

Tokenization of non-fungible assets

Real estate tokenization

Compared to REITs or private ownership, tokenized real estate is projected to become a more lucrative, borderless, and democratic (“real estate for everyone on the blockchain”) means of investing in assets, such as a basket of rental homes, a senior care community, or a chain of regionally-branded motels.

Collectibles tokenization

Bitcoin is a fungible token. Each bitcoin is interchangeable just like fiat currencies. None of them is distinguishable from others in a manner that would create more or less value. Asset-backed tokens representing exotic non-fungible assets, like collectibles are, by nature, distinguishable from one another. Each token is unique, creates digital scarcity, and all blockchain users know how many they are, and how to distinguish one from another.

The tokenization of non-fungible soft assets

Intellectual Property (IP) tokenization

IP assets are illiquid and lack secondary markets on which to trade. Theoretically, it is easy to tokenize IP ownership, and the advantages are many. Copyright, trademark, patent, royalty equity, and income can be tokenized, improving the liquidity and increasing the value of the underlying asset.

Digital asset tokenization

CryptoKitties and other tokenized virtual collectibles are examples of asset-backed tokens that create scarcity and value. This differs from digital collectibles ownership managed on a centralized database, like digital farmland earned during play of an online game. Marketplaces for these virtual products and digital collectibles are created through tokenization.

The importance of liquidity in today’s economy

Liquidity enables funds to be raised at a very rapid rate, even regarding high volumes of shares or tokens. Liquidity is king for fast fundraising, since by increasing the trading volumes, asset prices increase, and removes the risks of slow closing for non-profitable assets.

Any type of asset can be liquidized on a blockchain. Assets can be offered as tokenized products to investors, facilitating a change from the traditional business to cryptocurrency, or a mixture of both.

Tokenizer Blockchain Banking Platform

Tokenizer is a blockchain investment banking system that champions accessible, transparent, and safe financial services. We believe that everyone deserves: equal access to investment and fundraising opportunities. That is why we are democratizing access to capital for investors and fundraisers by making investing and fundraising efficient, safe, and accessible to everyone.

Are you in need of raising funds or investing in security tokens? Apply to raise funds in Tokenizer by visiting opening an account here. If you want to invest in security tokens, contact us by creating an account here, and if you want to liquidate and trade-in Asset-Backed Tokens, we have a decentralized exchange designed for you. You can also contact us to order a metallic crypto card at $149 only.

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