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What Assets Can Be Tokenized

What can be tokenized

For any business that wants to have its assets tokenized, one question is important: what type of asset can be tokenized? Blockchain technology is suitable for converting almost any asset into tokenized value. All the assets that can be tokenized can be roughly divided into four groups:

  1. Physical assets. This type includes cash and property (cars, houses, apartments, etc.).
  2. Stocks. They can be turned into security tokens, which are stored in a crypto wallet.
  3. Investment funds. Indeed, the investor will receive his share in the fund in the form of a token.
  4. Business services. A company’s activities can be easily converted into digital assets. The resulting profit can be shifted to new projects or ongoing expenses.

Benefits of tokenization for token holders

So what benefits do token holders get?

Increased liquidity

Again, we recall the example of tokenization that we gave above. It’s not necessary to sell the entire asset to raise funds. Instead, you can sell a certain number of tokens (a share of the property) to attract investments for further development.

Transparent pricing policy

This advantage follows from the previous one. By increasing liquidity, companies or individuals can work with historically illiquid assets. And the sale of tokens as a share of ownership allows for a transparent pricing policy.

Reduced operating costs

Hiring lawyers and processing documents is time-consuming and costly. A specialized online platform can automate these processes. Moreover, it can perform secure transactions on its own. 

Benefits of tokenization for investors

Increased liquidity

Investors have more freedom to invest. For example, they can buy a share of real estate at an affordable price. Tokens are also an effective solution for portfolio diversification. In addition, it helps to increase the liquidity of assets.

Transparency

The immutability of the blockchain allows maintaining users’ data. Therefore, investors can make more informed decisions.

Personal data protection

Blockchain technology is the ideal solution for creating a single online identity. Personal data can be verified with a digital signature formed from a pair of buyers’ private and public keys. Support for standardized identifiers ensures that tokens are supported on many platforms.

What will the tokenization of assets bring in the future

Tokenization takes asset management to a new level. It dramatically simplifies access to liquid markets, making trading accessible to everyone. However, the issue of tokenization regulation remains open. Therefore, working with a stock exchange or ETF will be a little more complex than working with an NFT art marketplace.

Moreover, with tokenization, anyone can become an investor. It also brings business benefits in the form of easier fundraising.

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