What is asset tokenisation for? What does it solve and serve?
Tokenization solve the issue of liquidity by adding transparency of asset condition and it's use. The tokenization of assets gains the greatest value under the following conditions:
— Presence of a large number of asset owners or decentralized assets.
— Standardized end-product, which would allow to isolate meta-information when creating the smart-asset. This is to allow trading assets to other assets without any additional services like auditing, due dilligence or extencive legal procedures.
— The ability to use a token as a method of payment for end-product. This function of token not only allows market participants to investing into, say, construction of a building or receiving return of investment and speculative gains from the asset. Such type of tokens may be used to receive payments for rent of space within the building.
— The ability for the token to be used to own a single asset by a large number of investors. This condition would allow the owner of a smart-asset to attract a lot of funds via placement on the BANKEX stock market. A classic example would be shared ownership of real estate, where every person only owns a part of the real estate.
— The ability to quickly and unambiguously measure characteristics that affect the quality or quantity of end-procuts. This ability to perform regular automated audit of the asset significantly increases the quality of asset monitoring. It is a powerful competitive advantage compared to the Big Four and traditional rating agencies. — Annual evaluation by auditors is replaced with what is essentially a real-time audit.
—The ability to withdraw the asset from ownership if the terms of the contract are not fulfilled. This means that outside of audit of the contract, we have the option, aside from tokenization with the escrow module, to withdraw the asset along with a certain value as a form of collateral if the terms are not being fulfilled.
— Control of end-product sales.
— Assets, the transfer of which requires large legal and accounting expenditures. Such assets would include second-tier equities or private equities a year or two prior to IPO. Enterprising shareholders create an interest in transactions involving this type of assets.
