Tokenisation and Digital Assets
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Tokenisation and Digital Assets

In our previous #newsletters, we covered a few blockchain use cases. This article will cover the most talked about topic in #digitalassets tokenisation. What are digital assets in general and how #tokenisation allows for going beyond the normal limits of the valuable market? It enables #investors to realise exposure to a value like gold, real estate, artwork etc. Since the token may be a digital #certificate of legal ownership, it is often processed and transferred instantly.

The tokenisation of digital assets provides various advantages over both #tangible and non-tangible #assets. Let's consider a few advantages,

  • Security

According to traditional and historical methods, storing precious #metals in a secure, remote vault was considered the safest way of securing them. Tokenisation adds an additional layer of #protection to the present time-tested method of storing precious metals. While the metal itself remains held in a vault, its certificate of ownership is secured with state-of-the-art #cryptographic algorithms.

  • Flexibility

Tokenisation allows owners and investors to acquire full #control over their assets. Unlike tangible assets such as properties, precious metals, #gold, or platinum, tokenised assets can be traded anytime and anywhere,?and the trade order is also executed immediately.

  • Reliability

#Cryptographic algorithms that secure tokenised assets are impossible to be broken. Unlike paper #certificates, they can be forged or #tampered with, allowing you to place full #confidence in your investment.

Future of tokenisation of precious metals:

A large number of #commodities enjoy tokenisation, perhaps the tokenisation of these metals with the actual value has the foremost advantages. Precious metals are one of the simplest assets for reserving #capital from inflation and market fluctuations. Trading them can also become easier because of tokenisation. In addition, to the prevailing tokens secured by gold or silver, other precious metals should soon appear. What is going to be next? #Platinum? Palladium? The chances are endless...

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Source: Rejolut.com

Real Estate Assets Tokenisation

Tokenisation is the process of converting #land assets into several virtual land tokens. Further, selling these #tokens on a web marketplace where the buyer of a specific land token owns that portion of the asset on-chain.

Since every land token represents direct ownership of an asset. So at the time of tokenisation, these assets are often shared by a company owning land. Hence, with the assistance of tokenization, #property buyers can do transactions digitally using land tokens rather than the normal way of paper #documentation.

The motive behind tokenisation is to secure real assets; that’s why it's also called security tokens. #Securitising an asset means dividing it into shares equivalent way tokenisation means splitting an #asset into land tokens (shares), representing a specific share of the underlying asset. Following are a few types of tokenisation in #real estate.

  • Commercial Tokenisation

#Commercial tokenisation is the method of tokenising the ownership of #economic properties with legally compliant protocols.

  • Residential Tokenisation

It's the method of tokenising the #fractional ownership of #residential land for #investors, asset owners, builders and institutions.

  • Trophy Tokenisation

It's the method of tokenising land assets that are typically #iconic buildings in #prime locations. Assuming that you already understood the concept of land tokens and therefore the process of tokenisation, let’s discuss what #problems real estate tokenisation can solve.

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Source: Rejolut.com

  • Proof of Ownership

#Official documents that demonstrate the ownership rights serve as evidence of legal #ownership. In contrast, a distributed ledger is voluntarily #shared, synced across several locations, and made available to numerous users through tokenisation. Any changes within the #ledger are shared with all participants in a few seconds. Each transaction is #endorsed and validated to mitigate any issue arising from various #ownership claims.

  • Increased Transparency

The #distributed ledger on which land tokens are stored helps to mitigate the difficulty with undeniable proof of #ownership as well as also allow to improve #transparency within the land market.

Alongside high #transparency, full security can be achieved by #digitising the asset. As discussed earlier, tokenisation is backed by blockchain technology, so there's little question about security because #blockchain may be a proven technology regarding security.

  • Liquidity of land

Tokenisation can solve the most important issue of land, which is the #liquidity of the asset. In the traditional way, various parties are involved in the #delivery of assets, while tokenisation simplifies trading the properties. It omits the middleman and allows #ownership to be transferred directly from investor to investor.

  • Easier searching for properties

Tokenisation can solve another issue which is the quick #search for the property. Hence it eases the investor’s job. Investors will have access to look for potential #investments located in other #geographical areas and also allow sellers to realise access to more potential buyers.

[Read More: Tokenisation and Use cases]

  • Reduced Settlement Time

Transactions in #tokenised or digital assets are frequently settled more quickly and efficiently than in regular #financial transactions. Tokenised transactions are often settled almost instantly, unlike the weeks and months in #traditional ones.

In conclusion, with the tokenization of land assets; the #market conditions are rapidly changing. Funds can be moved more successfully by #investors, and asset holders can manage #equities more skillfully. Many other points favour land tokenisation which can prove that it's the longer term of #land assets. All the points above prove that land #tokenisation is the way forward. This process comes with more flexibility, #high security, and awesome #flexibility compared to the normal model of handling properties and #investors.

We will explore more about #digital assets and the future of real estate in the future articles. If you want to hear more about it, don't forget to #upvote the article and #comment your views on one of the potential use cases of #blockchain technology.

Tanzeel Ur Rehman

Software Sales | Business development | Project Management

1 年

Interesting....

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