Offerings & Issuance

Automate Your Profit Share With Tokenization Companies

Bitcoin's arrival ushered in a new era of possibilities for revolutionizing the way investments and assets are issued, maintained, and traded. Blockchain, the technology underlying the world's first cryptocurrency, is a form of distributed ledger technology that offers many investment opportunities. Based on blockchain, tokenization is a technology that is increasingly being adopted by businesses, investors, and asset owners.

The market for asset tokenization is also growing as the popularity of asset tokenization rises. According to Plutoneo, the tokenized asset market in Europe alone is expected to be worth €1.4 trillion in 2024.

Tokenization refers to the process of converting physical assets into digital assets. Regardless of whether a token is registered with a government-run registry, the blockchain assures that once you acquire it, you can't get rid of it. Thanks to this feature, businesses may now use tokenization to automate a number of activities, including the acquisition of new assets, and increase cash flow. Tokenization enables fractional ownership as one of its main aspects, a concept that is gaining tremendous momentum. Don’t know what fractional ownership means? Take a look at the following example:

Assume you own a $400,000 apartment. This apartment can be converted into 400,000 tokens, with each token representing a 0.0005 percent stake in the residence. Therefore, tokens are issued on any blockchain platform that can handle smart contracts, such as Ethereum. When a person purchases one token, they are purchasing 0.0005% of the asset's ownership. When someone buys 50,000 tokens, they own 12.5% of the asset, whereas someone who buys 100,000 tokens owns 25% of the asset. In consequence, they will possess 100% of the property if they purchase all 200,000 tokens.

Benefits of Asset Tokenization

Currently, a major part of the world's population lacks access to high-value investments. New capital raising procedures like tokenization, that are based on blockchain technology, introduce capital mobility and international capital markets.

In fact, fractional ownership largely lowers the barriers to entry for new investors. Rather than purchasing a new residence for $1 million, people can pay whatever their budget permits for a tokenized percentage of the property. Fractional ownership and lower barriers to entry contribute to diversifying the portfolios of investors and building a more genuine market portfolio. Furthermore, an investor can invest in a property in any region of the world without being physically present. With asset tokenization on the blockchain, investing becomes an easier, simpler and safer process.

From an investment perspective, here are some of the biggest benefits of asset tokenization

  • Trusted source of capital & leverage
    As each record will be kept on a shared and irreversible ledger, no one can claim false ownership of an asset. Owing to the ecosystem’s transparency, everyone will clearly view the updated ledger of ownership data. Furthermore, by consulting these immutable ownership records, issues may be promptly resolved.
  • Improved liquidity of assets

Blockchain technology establishes a decentralized system that allows anyone anywhere in the world to tokenize and exchange their assets at any time. In addition, the list of assets might be fairly long, including illiquid assets, such as real estate, antiques, artwork, etc. As a consequence, blockchain encounters investment obstacles while also increasing liquidity.

  • Automated profit shares

In terms of regulatory standing, equity tokens can be considered financial instruments and handled as securities. Tokenized equity is similar to traditional shares, as owners are entitled to a portion of a firm's revenues and a vote in its future direction. Asset tokenization enables the automation of these profit shares due to its underlying technology.

  • Lower costs and elimination of middlemen
    It generally takes days to months for the settlement of asset trading. In fact, external companies are used to verify transaction documents and investor eligibility, which adds expenses to the process. With blockchain's capacity to guarantee immutability and transparency, tokenization eliminates the need for intermediaries. The exchange procedure is automated since token transactions and transfers are done using smart contracts. With no need for intermediaries, automation can reduce trading stress and speed up the settlement of deals with minimal transaction fees.
  • Improved liquidity

By using blockchain in order to manage the investment process, asset tokenization provides a low-friction environment where ownership can be transferred automatically while maintaining regulatory compliance. In addition, tokenized assets enable investors to invest with fiat money and trade on regulated exchanges, due to their reduced complexity and expenses. Therefore, liquidity might be increased.

  • Broader investor base and access to capital

Historically, real-world assets have been fractionalized to a relatively low degree. By tokenizing assets, users can sell or acquire tokens, eliminating restrictions on fractions of ownership. In consequence, a larger pool of potential investors can take part in investing.

  • Shorter lock-up periods

Investors are not able to sell their holdings during lock-up periods because the asset is huge and illiquid. Since investors may quickly sell their tokens in a liquid market, asset tokenization can reduce the lock period. Hence, investors do not have to wait for years to collect gains or losses.

The future of asset tokenization with Tokenizer

Tokenization is certainly poised to transform the face of asset management. As previously discussed, tokenization is undoubtedly beneficial for businesses and investors. Despite the rising interest in blockchain asset tokenization, the world is still sluggish to catch up. The majority of the roadblocks arise from regulatory issues and existing technological limitations. Blockchain, like any other technology, is vulnerable to hackers. Creating a legal bridge between assets and distributed ledger technology often requires legal professionals to solve tax-related and cross-jurisdictional issues. Nonetheless, new solutions will enter the market in the coming years in order to address these problems.

Tokenizer is one such solution that is already making waves. It is a blockchain-based tokenization platform that provides investors with new ways to earn passive income. The platform aims at democratizing investment and banking for everyone by offering a variety of asset classes. These classes can help you diversify your portfolio.

Tokenizer is also inviting the general public to partake in its series A round listing. You can register by following this link. Also, check out Tokenizer’s website for more information about the sale scope, sale type, and other relevant details.

Learn more about Tokenizer with the links below

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