How Asset Tokenization Is Transforming Investments
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Tokenization is an emerging trend. Anything can be tokenized, and it enables fractional ownership of assets that may otherwise not be accessible to small-scale investors.
The assets industry at present suffers from a lack of transparency, efficiency, and is prone to risk. Blockchain technology allows for the digital representation of assets with smart contracts. Tokenization could possibly create a revolution within assets management.
Assets that are apt for tokenization
Venture capital – this asset class is well known for its illiquid nature. Investors usually have to wait 5 to 10 years to see returns on their investments. Increased liquidity would drive investor activity. Tokenized assets can be traded on the secondary market of the issuer’s choice.
Valuable metals – Innovative startups such as CEDEX are looking to see if investors have access to secure trade of precious metals and gems. Merchants could list their gems on the CEDEX platform and give them to a custodian, who’d release them following transaction completion.
Real estate – Customers can purchase fractions of real estate properties, obtain rent and sell when the price is higher, just like with traditional investing. Tokenization reduces the barriers to access.
Athletes, sports teams, and celebrities – Investing in clubs and players will soon be a reality, in a decentralized marketplace, on account of tokenization.
Flat currencies – Stablecoins can expect wider adoption. These assets provide a roadmap for other tokens to minimize transaction costs, processing times, and volatility.
Fine art and luxury vehicles – Tokenization will open up these assets to a class of investors who didn’t have access to them prior.
Commodities – Geopolitical inefficiency causes expenses in the supply chain and reduces costs incurred due to commodities producers......Read More