If you are one of the people who aim at securing your tomorrow by making steady investments today, then there’s a good chance that you are inclined towards real estate, hedge funds, private equity and companies.
However, as these assets are illiquid, it’s tough to shift them quickly which leads to locking up of wealth. There is a solution to this — tokenization. With the introduction of tokenization, liquidation of all assets groups on the blockchain will become easier and it will create a tradable standard in security tokens.
We’re all aware of the real-state trading scenario. A complex process that requires extensive time and money.
Right from paying off agents to hoping the asking price is met, it’s a tedious process. Baby-boomers, who are asset-rich, are sceptical about selling their properties due to this reason and one of the main reasons that cause millennial housing crisis.
With higher liquidity in the assets, both big and small players will be benefitted and the above example only proves it.
On completion of set conditions, the blockchain set up can self-execute transactions. Securing the transactions and making the process seamless, the advantages of blockchain are visible.
Owners will benefit as the gradual conversion of an illiquid asset into a regular stream of income due to the token-by-token purchase system that will be set up in the future.
Tokenport, who aim at digitization of assets by issuing security tokens against them, is a genius for two main reasons. 1) It allows to track the ownership of an asset, 2) Facilitates the swift transfer of assets.
The company is very serious about it and its recent partnership with Lexit serves as testimony for the same.
Previously illiquid assets were restricted in terms of carrying out free trade, although, with the introduction of distributed ledger technology on the blockchain, it holds massive possibility to turn things around.
The main benefit due to this would be the ultimate elimination of middlemen; however one cannot point out exactly how the market would behave following this. It would definitely cause some amount of upheaval.
The world of finance is taking steps towards becoming an honest marketplace and blockchain’s transparency and immutability could be the cornerstone.
With clear and honest trade of assets inbuilt and integrated into the technology, there now exists an alternative to the conventional trust-less system.
This modern technology could really upturn the investment scenario, for the better.
As it may be established that the blockchain is set to emancipate the community of entrepreneurs, private lenders as well as businesses, then unrestricted entry into the marketplace with asset-backed tokens is one of the most effective ways of attaining this goal, a feat that has never been achieved before.
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