Asset Token Development
Security tokens, or asset-backed tokens, increase the potential initial raise for fund operators and other parties who issue securities. However, the main reason it’s beneficial for crypto fund managers to create cryptographic analogues of traditional assets is to increase the underlying assets liquidity — defined as the ease and speed at which assets are purchased or sold (liquidated) at market price. Generally, bonds and stocks are assets with high liquidity, in contrast to assets such as vehicles, real estate, jewellery, art and collectibles which lack access to high trading volumes, trading opportunities on exchanges, and liquidity.
Tokens which are backed by external assets are somewhat comparable to gold backed paper currencies, like many traditional fiat currencies were under the ‘gold standard’. But the situation becomes more complex when we examine tokens associated with assets which are ‘non-fungible’— for example, real estate.
The most novel use cases for asset-backed tokens are therefore emerging from tokenomic models which are backed by limited liquidity assets — such as derivatives, private equity, real estate, collectibles, and other assets which have been traditionally difficult to find immediate buyers for. Currently, assets which are non-fungible are worth trillions, but are for the most part they are stored in vaults worldwide as hedges against inflation rates.
Use Cases of Asset Token Development
- The issuance of corporate debt or equity via a security token.
- Real estate investment trust tokens would also allow customization, and may be purchased by investors willing to accept a certain credit risks, for a pre-determined duration.
- Equity from commercial properties and rental income. Retail investors who have a relatively modest amount of capital are currently unable to diversify into the commercial property and rental market.
- Intellectual property asset backed tokens, such as film licenses and royalty payments, may be distributed to every party who owns a portion of a patent, film, or book.
- Accounts payable and receivable, represented by security tokens, has the potential to replace supply chain finance and factoring, with tokens and data flowing between accounts receivable and accounts payable, in ERP systems.
Asset Tokens and the Future of the Financial Industry
Leading financial institutions understand the opportunity that tokenization of financial assets represents. When it comes to turning legacy asset classes, such as corporate securities, into vibrant digital markets, we are witnessing several initiatives, notably by incumbent U.S. and European exchanges that are all developing tokenization offerings. From the origination of trading assets to Corporate Trust, the value chain is evolving.
Key Features of Asset Tokens
Asset Tokens are transferable between Rewards Programs, Participating Merchants, Banks and Compatible Crypto Wallets.
Asset Tokens are intrinsically valuable. Asset Tokens are the World’s only Reward Point to potentially increase in value.
Asset Tokens can be bought and sold on participating Crypto Exchanges and added to consumers participating Rewards Points Programs.
Asset Tokens run at speeds exceeding credit card transactions. Delegated Proof of Stake (DPOS) allows for speeds exceeding 1 Million Transactions Per Second (TPS).
Applications of Asset Tokens
As an asset on the blockchain, every transaction of it is stored forever and can’t be changed. It means that nobody ever will be able to steal your asset ownership if you follow all security measures.
Utilization of Blockchain technology allows swift and easy background check of any transaction and allows tracing the tokens to the issuer without any outstanding software, by use of a sole block explorer.
Transferring tokens is comparably easy. Usually, only a few actions in a smartphone app or a website are required, in comparison to composing, signing contracts and transferring the shares in the form of paperwork. Therefore, the tokenization of real-world assets is more accessible.
Ability to divide
Tokens are not limited to real numbers, so any part of ownership can be transferred or traded. Not only this eliminates the need of having a minimum purchase amount, but also potentially significantly raises the token liquidity, and that is usually followed by the price growth of the tokenized asset.
The need for any brokers or middlemen is eliminated, hence fewer commissions or money waste occur when trading such assets.