Tokenization Made Possible with Blockchain

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Tokenization

 

Tangible tokens date back to a few centuries as a pledge or collateral redeemable in goods or services. The nostalgia might kick in for most of our readers when arcade and amusement park tokens were clinking in our pockets or the pre-purchased “One Call Token“to use a public phone. Things got better when we later moved into using plastic loaded with credits representing tokens, in today’s day and age things got even better with the ground breaking Blockchain technology making tokenization easier, faster and more secure. The sky is the limit, pretty much everything could be tokenized today and the near future with smart contracts.

The introduction of tokenization is changing the way we invest in assets, from company shares, real-estate, payments, physical goods and commodities are being tokenized on the blockchain which is digitalizing real assets. Take the real-estate sector as an example; which typically involves two parties, a buyer and a seller, now suppose you own an apartment evaluated at $300,000 and need $30,000 for whatever reason, with tokenization via blockchain you can convert your ownership rights of the apartment into digital tokens that represent the total shares of the $300,000 evaluation which is 300,000 tokens (1 token = $1). Now you will be able to sell 10% of the apartment for 30,000 tokens which equals to $30,000 in your pocket. Partial or fractional sale of your asset is now possible.

Why Tokenization

Tokenization also brings the investment world together as you can invest across borders in different available properties or businesses without physically being there.

The other key factor that Tokenization provides is the abolition of middlemen; investment or trading of assets typically takes weeks or even months to be settled and usually involves third party companies to mediate the transactions, paperwork and qualification, which can be costly and a slow process. By tokenizing assets with smart contracts on blockchain, we can eliminate intermediaries as the technology provides full transparency.  

Trading of assets usually takes days to months to achieve a settlement. It involves external entities to validate the documentation of transactions and investor’s eligibility, which adds extra costs to the process. However, tokenization removes the need for intermediaries with blockchain’s ability to provide dependability and transparency. 

Tokenization allows for assets to be dividable which opens the door of investment opportunities to millions of people, people will be able to invest smaller amounts into properties as mentioned above and can invest more in a later stage…having a piece of the pie is better than having no pie at all, fractional ownership is what the masses are waiting for. Besides paving the way for new avenues for investment, tokenization creates new liquidity in markets for assets which are traditionally highly illiquid.

Today, several companies are creating regulated platforms to tokenise assets, making it possible to facilitate the selling or buying of tokens that represent fractions of ownership. Allowing for broader and net set of investors to participate in the investment process which opened the opportunity to diversify their portfolio with assets they previously could not afford.  

The iOWNX equity based crowd-investment platform which utilizes the iOWN Tokens to fund campaigns from many sectors such as real-estate also utilizes uOWN Tokens to tokenize assets, for example; 1 apartment = 2 million iOWN, if you invest 10% (200,000 iOWN) of the tokenized asset you will have 10% shares represented in uOWN Tokens. The iOWNX platform will also facilitate the secondary trade where someone can sell his uOWN Token (shares) in the built-in marketplace with a few clicks. 

To conclude, tokenization of assets and shares provides a progressive approach to how it is traditionally done. Fractional ownership of assets is now completed in a swift, cost-effective and secure manner with smart contracts stored in the blockchain; it eliminates cases of lost or modified title deeds and ownership documents which can be tampered with or completely wiped out from a land department database in some cases during war for example; proof of ownership stored on a distributed ledger is not hackable and easily accessible to parties involved. Tokenization will open doors to partial ownership of assets with a few clicks attracting millions of investors who can afford the fractions of a complete asset.  

 

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