Tokenization is the future
Tokenization is the future !!!
Many investors seem to have no idea about what is coming. The future of blockchain and its surrounding technology is very bright and its is leading us to a better revolution.
In the past few years, Non Fungible tokens (NFTs)has taken the space in a very short period of time. What are NFTs ? They are unique assets implemented on blockchain to prove the authenticity to ownership of a particular item. NFTs might be Arts, Properties, Certificates, Bills, Articles and lots more. NFTs has open us to more importance of blockchain and other innovations. Since NFTs proves ownership to assets, it doesn’t necessarily means tokenizing.
What Is Tokenization ?
Tokenization is the fractional division of assets by converting them to a more smaller units that enables more than one investor or individuals to have ownership over an asset. Example; There is a house in Florida that needs to be sold at a price of 1 million dollars. We have 10 investors who are interested in buying this house but none of them have 1 million dollars. Tokenization can allow them all to own a piece of this house by creating a digital ownership (Certificate) of this house with a unique identity of 10 where each has its own uniqueness, this might be based on invested amount, name, location, apartment and so on. This enables 10 investor own an asset and this agreement is very immutable since its implemented on the blockchain.
This tokenized assets can be sold anytime to any other investors who wants to buy it thereby the ownership will be transferred to its new owner even without the consent of other investors. After being sold the seller has no right of claim again because it is immutable and all transaction are being recorded on the blockchain for years.
This can be applied in any sector in the world including Businesses, Real Estates, Museums, Arts, Education, Government, Contracts and lots.
Why Tokenization ?
- Fractional Ownership
As discussed earlier, Tokenization enables investors to be able to own an assets alongside other investors. Thousand of investors can own a piece of a building which sounds more interesting.
2. Immutability and Security
Transaction on blockchains can’t be changed nor deleted. This technology makes it more secured and trustworthy. Which means an asset cannot be compromised through the blockchain unless it was given a secured access by the owner.
3. Trading and Liquidity
Tokenization can make allow assets to be traded through decentralised exchanged or peer to peer. Since assets can be tokenized into dividing to certain amounts of supply thereby enabling certain investors to trade this assets as tokens. Note that a fractional ownership to an asset is also a total ownership to certain part of an assets thereby it can be tokenized all over again.
4. Globalization
Assets can be bought and owned irrespective of location or differences. Since trading is also globalized through centralized and decentralized platforms makes globalized trading more easier.
5. Diversification
Investors can now decide to own fraction of assets thereby reducing their risk to owning just an asset in a portfolio.
6. Contract Automation
With tokenization on blockchain, there is no third party need or physical contract. All settlement and ownership transfer can be done on blockchain at a spot which makes such faster, reliable and efficient technology.
Example of a blockchain technology implementing full tokenization is the SOLOGENIC Project built on the XRP Ledger. Sologenic (SOLO)is an ecosystem that aims to facilitate the process of a low-cost, on-demand, and secure tokenization of non-blockchain assets on the XRP Ledger.
In my next article, i will write about Sologenic and how it will help the adoption of tokenization in the future.
