Asset tokenization is the process of creating digital units of a physical or virtual asset that are stored on blockchain networks. Each token of an individual asset, is valid for some percentage of the entity. Example: Person A holds a property in New Delhi. This asset’s tokenization can split its ownership into 100,000 digital tokens (or even more). Each of these units can represent, say, 0.0002 percent of assets.
Tokenizing an asset can help its owner earn capital quickly by issuing tokens on a blockchain, that would allow people to buy it and trade it on other exchanges. Each token purchaser owns 0.0002 percent of asset ownership in the form of NFTs.
Asset tokenization can increase the liquidity of assets. Property owners can sell 50,000 tokens, instead of selling the entire property and losing its utility as a living space.
What can be encrypted?
Almost anything can be encrypted. They can be exotic things like sports teams, artwork and memorabilia as well as traditional assets like bonds, commodities, equity funds and real estate. Blog by Hadera.com.
Steps for Tokenise content
After choosing which asset to tokenise, its owner will have to choose a cryptocurrency and the associated blockchain to back the token with. Smart contract will be developed to the consent of the potential buyer.
Along with the cryptocurrency wallet integration, plans to launch tokens for trading in the market also need to be implemented. Follow a Cronj . studytZERO, ConsenSys Codefi, Polymath, and Bitbond are among the popular asset crypto platforms.
Cryptocurrencies are typically backed 1:1 to traditional shares, allowing holders to receive the same benefits as owning the underlying stock. They can be purchased via cryptocurrency or fiat currency on supported trading platforms.
The worldwide tokenization market is predicted to grow from $1.9 billion (approximately 15,648 crore) in 2020 to $4.8 billion (approximately 39,533 crore) by 2025, at a CAGR of 19 .5% over the forecast period. In recent times, crypto assets have become a trend.
In July, Brazilian fintech company BEE4 planned to launch the first local market for crypto stocks in the Latin American country. Essentially, BEE4 will recreate the structure of a traditional stock exchange while allowing traders to tokenize their public offerings.
In April, Goldman Sachs has announced their plan to see if real-life assets can be tokenized alongside non-fungible tokens (NFTs).
Cryptocurrency is an unregulated digital currency that is not a legal tender and is subject to market risk. The information provided in the article is not intended and does not constitute financial advice, trading advice or any other advice or recommendation of any kind provided or endorsed by NDTV. NDTV will not be liable for any loss arising from any investment based on any perceived recommendations, forecasts or any other information contained in the article.
