Real estate… paintings… diamonds… company stock… all asset classes are beginning to be tokenized thanks to the magic of blockchain technology. And I promise you, if you’ve never heard of tokenization as a means of crowdfunding your projects, you soon will – and you’ll wonder why it’s taken you so long!
Tokenization is basically the process of converting the rights of real assets into digital tokens, essentially fractionalizing an investment type to make it more accessible and more attractive to the interests of investors.
Take for example, a $600 million luxury hotel project. Security Tokens can be issued which will represent “economic interests” in the hotel. These tokens with their associated “smart contracts” can now be freely bought and sold on different exchange platforms, providing the liquidity investors crave and never had access to previously. When an investor purchases a token, they are purchasing a percentage ownership in the asset, and that allows investors access to major deals that they couldn’t possibly take down by themselves in the past.
Because Blockchain is a public ledger that cannot be altered, it ensures that once you buy tokens, nobody can “erase” your ownership even if it is not registered in a government-run registry. This built-in safety valve is one of the big reasons blockchain is becoming so popular for this type of application. Blockchain guarantees that all ownership information is immutable!
While still in its early stages, tokenization on the blockchain has already seen major success with real estate as real estate developers in the United States, France, and Japan are all experiencing the benefits of tokenization. Plus, when compared to other digital assets, another huge advantage of security tokens is regulatory compliance, which greatly reduces the potential for fraud in these types of deals.
The process is simple: identify an asset, tokenize it on the blockchain to create its digital representation, then place it on an Initial Exchange Offering platform for trading on the secondary market. The World Token Market does exactly that!
Progress with tokenization is happening at a lightning speed. The tokenization market size is estimated to grow from $983 million in 2018 to $2,670 million by 2023. When the internet happened 25 years ago, no one knew what it was or how it would impact everyone’s life on a global basis and it has completely transformed the world. There’s a very good chance the same thing will happen with blockchain as we believe these Security Token Offerings will be the future for raising money and crowdfunding.
Just look at the numbers: Nothing will stop tokenization! Let us tokenize your next project – contact us today with any questions you may have or request a tokenization platform demo here.