Listen to this story
freelance content writer
Investment tokens are tokens that serve as means of investment to the token holder. They could either represent financial instruments such as equity, derivatives, debts, and units in a fund, or ownership interest in tangible assets like real estate, intellectual property, and revenue streams. They are tokens that can be used for funding and are issued in compliance with traditional regulatory requirements/investors' protection.
Some benefits of tokenizing investment instruments include:
Accessibility to investment opportunities for small investors.
Allow for fractionalizing assets.
improves the liquidity of assets, as blockchain technology improves the ease of buying or selling tokenized assets.
Automate control for compliance with security laws since tokens allow for building compliance requirements into the token.
Equity Token: These are tokens that represent ownership of an asset, very much like stock or shares.
Entitlement Right Token: Right entitlement is a fundraising method that companies use to offer their shareholders the right to purchase shares at a discount on a predetermined date known as the record date. Tokenizing rights entitlement enables these rights to be traded on accredited exchanges.
Debt Tokens: These are tokenized assets that represent debt instruments. Tokenizing a debt contract automates the interest rate and keeps track of the payments made by the debtor.
Fund Token: Shares or units of a fund are represented in tokens on a blockchain, and they can be easily traded on accredited exchanges.
Tokenization of Financial Assets:
Tokenization of Real Estate:
Tokenizing Debt:
Tokenized Fund: Through its new funding structure called vertical funds,
Investors are offered 31 tokens in total. 30 tokens will represent each start-up in the vertical and the 31st token will represent the basket of all the tokens. Holders can trade their tokens individually or collectively through an accredited security token exchange.
Investment tokens will open up new asset classes, new markets, and give more investment opportunities to small investors. For issuers of investment tokens, it will open up their reach worldwide, and increase the liquidity of their assets since token holders can make transactions without interference from intermediaries.