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Asset Tokenization as an Industry Game Changer
This document discusses asset tokenization and its potential as an industry game changer. It provides examples of several blockchain startups that are tokenizing different types of real-world assets like real estate, utilities, commodities, and traditional financial assets. The benefits of asset tokenization include increased liquidity, fractional ownership models, risk diversification, and reduced costs. However, there are also challenges around ensuring trusted issuers, addressing the current regulatory vacuum, establishing legal enforceability of property rights via tokens, and developing solutions for issues like digital identity, asset valuations, and technology limitations. Overall, asset tokenization has significant growth opportunities if the remaining technical and legal questions can be resolved.
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Introduction to asset tokenization, its significance as an industry game changer, presented by Jongseung Kim from SK telecom.
Explores the rationale for asset tokenization, discussing its potential benefits in modern finance.
Lists various blockchain initiatives across sectors, emphasizing efficiency, cost reduction, and legal transformation.
Defines assets in financial terms, distinguishing between current and fixed assets, and tangible vs intangible assets.
Explains asset-backed tokens, detailing rights associated with property and types of tokens: security and utility tokens.
Clarifies the difference between digitization and tokenization, focusing on automation and asset utilization.
Highlights over 60 blockchain startups involved in asset tokenization across industries like real estate and utilities.
Discusses benefits of asset tokenization, including liquidity, diversification, and reduced barriers for investors.
Introduces case studies of asset tokenization in the real estate sector.
Presents data on the global real estate market and its annual growth, emphasizing economic significance.
Details 44 cryptocurrencies specifically focused on the real estate market.
Explains Crowdvilla’s model, fundraising contributions, and token systems for property sharing.
Describes REIDAO's real estate token system, focusing on Ethereum integration and ownership transparency.
Outlines Primalbase’s community-based ecosystem for office rental and token ownership model.
Details Imbrex's mission to empower the real estate industry with proprietary data access.
Introduces various platforms facilitating asset tokenization, enhancing investment opportunities.
Describes Tokenestate's end-to-end tokenization services for real estate funds and regulatory support.
Explains Bitproperty’s decentralized real estate platform and how it operates with dual token types.
Outlines BANKEX’s tokenization ecosystem designed to transform capital markets using blockchain.
Describes Swarm Fund's platform for private equity using blockchain technology for democratized investing.
Identifies key problems and challenges facing asset tokenization, including regulation and trust issues.
Discusses the technological hurdles for asset tokenization projects, particularly within the Ethereum platform.
Contemplates the future of asset tokenization, highlighting opportunities and the need for legal clarity.
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Similar to Asset Tokenization as an Industry Game Changer
Asset Tokenization as an Industry Game Changer
- 1. Asset Tokenization as an Industry Game Changer Jongseung Kim SK telecomBlockchain Business Development Unit 2018. 9. 12
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- 3. Blockchain Initiatives NewBiz. Development EfficiencyPlay Digital Asset Market RecordKeeper Crypto-Wallet ID/Authentication BlockchainDisruptor (Startup) Logistics Crypto-Exchange SupplyChain P2PEnergyTrading RealEstateService P2PInsurance Digital Gold Service CarbonTradingSocial Platform HealthRecord LandRegistry Digital Voting BlockchainCorePlatform Legacy Transformation Short-Term Value Driven (Legally approved) ReduceCost (LegacyIntegrated) ICO Driven ReduceFraud Mid-Term <Source:PayAttention to These4TypesofBlockchainBusinessInitiatives(Gartner, 2018)>
- 4. What is Asset? <Source:https://en.wikipedia.org/wiki/Asset> ü In financialaccounting, an asset is an economicresource. ü Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company to produce positive economic value is an asset. ü Assets represent value ofownership that can be convertedinto cash(although cash itself is also considered an asset). • Current Assets :Cash andcash equivalents, Inventory, Prepaidexpenses • Fixed Assets :land, buildings,machinery, furniture,tools, IT equipment Tangible Assets • Goodwill,copyrights,trademarks, patents and computer programs, etc. • Financialassets, includingsuchitems as accounts receivable,bondsand stocks, etc. Intangible Assets
- 5. Asset backed Tokens <Source:https://en.wikipedia.org/wiki/Property_rights_(economics)> Property (Asset) Rights Right to EarnIncome from the Good Right to Enforce Property Rights •Needtobe RegisteredLegally •Profit is Divided Security Token Utility Token Right to Transfer the Goodto Others Right to Use and Occupythe Good •TimesharewithoutOwnership •Accessis ControlledbyContract -Tokens are digital representations ofreal- world assets, are thus backed bythem -Rights are grated tothe token holders.
- 6. Digitization vs. Tokenization <Source:https://bankex.com/static/whitepaper.214a1621.pdf> • Automated smartcontracts for deal execution • Commands for automatic transactions • Formulas forcalculationof the asset price • Automatic validationofthe initialdata Tokenization = +Digitization Financial Components
- 7. Tokenizing assets : 60+ blockchain startups <Source:http://researchly.leobosankic.com/2018/06/29/blockchain-companies-tokenizing-the-real-world> Real EstateRealisto,Bitproperty,DomusCoins,imbrex,Brickblock Utilities WePowerNetwork,water.bankex Commodities OneGram, Orocrypt,DigixDAO, ChainTrade,Smartlands,GoldMint People TokenStars Collections: Art andtrading cards Maecenas,EtherLegends Media and Apps: Financing movies, Instagram accounts, Apps MovieCoin,AppToken,MEDIATOKEN Traditional financial assets BlackmoonCrypto,Smartlands,Dharma, CoinLoan,BlockchainCapital
- 8. Benefits of Asset tokenization <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson> § Liquidity ofassets/ Liquidity Premiums § New economicmodels around asset ownership, such as fractional ownership. § Diversification ofrisk arising out of asset ownership § Eliminating temporal/territorial barriers for asset owners forattracting investments § Reducing entry barriers for trading and investing § Newer models of raising capital, by allowing projects that are under development to issue shares in form of tokens to finance project development § Utilizing network effectfor certain products to increase their popularity in the market, by providing direct financial incentive to fractionalowners § Reducing administrative expenses
- 9. Real Estate AssetTokenization Service Cases
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- 15. Crowdvilla : Token Point System <Source:https://crowdvilla.io> ü EachCrowdvilla Token(CRV) denotes ashare of time-value for the use ofall properties in the Crowdvilla portfolio. ü CRV holders earn Crowdpoint Tokens(CROWD) in perpetuity(i.e.on an ongoing basis for as long as the portfolioexists). ü CROWD Tokensare used to book stays in the properties. ü The number ofCROWD Tokens generated is proportionalto the number of CRV Tokens held and the length ofthe holding period.
- 16. REIDAO’ Model <Source:https://reidao.io/#benefits> ü Every realestate that is registered will have its own Ethereum address where users can visit and retrieve information about the property, including its ownership details. ü REIDAO’sunique property token will follow acertain standard that makes it usable for otherservices built on the Ethereum blockchain. Affordable,Diversification, Market Liquidity, Versatility, Global, Security
- 17. Primalbase: Mission & Business Model <Source:https://primalbase.com> Primalbase is transformingtraditional officerental and creating a next-generation community-based ecosystem where it is possible to share, sell or rent out high-quality working spaces using Ethereum and Waves-based digital tokens.
- 18. Primalbase: Workspaces <Source:https://primalbase.com> Tokenpossession providesunlimitedlifetimeaccess toall Primalbase workspaces. • 1 PBT — 1 workspace for 1 personat any location. • 4 PBT — 1 private officeformax. 2 weeksdependingonits availability
- 19. Imbrex : Vision <Source:https://imbrex.io/#!> Imbrex isfoundedon the principle that the real estate industry should be in controlof its proprietary data. Listing agents should have direct access to their leads and exposure on a global real estate network.
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- 22. Tokenestate : Tokenization as a Service for Real Estate Funds <Source:https://tokenestate.io/index.html> ü Tokenestateprovides an end-to-end solution for real estate fund managers to tokenize their fund,issue their own real estate tokens in formof cryptosecuritiesand access to a large poolof retail and institutional investors. ü Tokenestate will take care of all legal aspects, required technical solutions and the fund raising process.
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- 24. Bitproperty : Vision <Source:https://btptoken.io/en> ü Bitpropertyis a decentralised real estate platform powered by Ethereum smart contracts. ü Bitproperty has two types of token: the BTP platform token and individual property asset tokens. ü BTP tokens represent the inherent value of the platform and provide holderswith income fromtransaction fees within the platform in proportionto the amount they own.
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- 28. BANKEX : Operating system for capital markets <Source:https://bankex.com/en> • BANKEX isdevelopingatokenizationecosystem, providingtechnology/servicesat everystage. • BANKEX brings bank-as-a-service and blockchaintogetherto transform capital markets.
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- 30. Swarm Fund : Mission and Swarm Platform Structure <Source:https://swarm.fund/swarm-basic> ü Swarm Fundis the blockchain for private equity. ü It’s a fully decentralized capital market place that democratizes investing by using the power ofthe blockchain to open up high-return, alternative investment classes to smaller investors through asset-backed funds using cryptocurrencytokens.
- 31. Swarm Fund : Basic Structure of the Swarm Token <Source:https://docs.swarm.fund/swarm-whitepaper-eng.pdf> SRC20 security tokens: •represent ownershipofpart ofan object or“asset”, • allowholders to manage that asset through voting, • secure a right to any revenuestreams from the asset, and • are tradable ina regulatory compliantmanner.
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- 33. Problems and Challenges <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson> Trusted issuers • Assetbackedtokens needto be based onthe certainty that usingthe tokens in any future point of the time, the participants can redeem their real-world assets. Regulatory Vacuum • Currentlythere is regulatory vacuum overa big numberof questionsof howwill this space shall be regulated. Legal enforceability ofproperty rights • The fundamentalquestion is whetherowningtokensconfers ownershipoverthe correspondingasset. Digital identity and KYC/AML • Digital ID marketplace needs to beintegrated into thetokenizationplatforms that meet the stringent standards ofbiggest regulatory bodies,such as SEC. Asset valuations/ rating • There is a needoftrusted intermediaries and oracles toprovidesuch valuation and rating data onasset backedtokens.
- 34. Technology Issues ü Almost alltheAsset tokenization projects’technologyis based on Ethereum Platform. ü If all the access(use or occupation of the asset) controls are executed throughsmart contracts, transaction feeissues are remained. ü For the near real-time transactions off-chaintechnologiesare needed. ü The functionof access controlhas to be integrated to the IoT(Internet ofThings) Technology.
- 35. “The technology isstill new and many legal questions remain unanswered. But tokenization stands to bring massive opportunities for growth and diversification to the asset market. We will see major breakthroughs in this area soon!” <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson>