The idea of fractional ownership of some “hard value” asset is not new. Think of stock certificates, timeshares, mutual funds to name just a few examples. What Blockchain Tokenisation brings to the table is simplicity, transparency and tradeability. While that may sound incremental it is actually game-changing because it opens up new markets.
Blockhain is revolutionary as moving from hand built cars to Henry Ford’s production line or moving from messages sent on paper to email. In both of those cases, a dramatic rise in efficiency grows the market
Commodities, such as gold, diamonds and oil.
Equity, through Security Tokens. This is a special case of an asset backed token. It is critical because this relates to how the the Blockchain Economy gets funded.
IP assets with cash flows. Today this is an exotic asset class where musicians were the early adopter – think Bowie Bonds. Once these assets become tokenised there will be a lot more liquidity and that will bring a lot more IP Assets onto the market.
Currencies. Collateralised stablecoins is another special case of an asset backed token. Real Estate with rental income. Today you can invest in REITs, if you want exposure to real estate cash flows. When ownership of whole buildings become tokenised it will open up new vehicles and new ways of doing portfolio construction; for example you could create a portfolio based on a theme such as migration from Silicon Valley to Rocky Mountain states.
Debt collateralised by Payables and Receivables. Today this is done through Supply Chain Finance and Factoring. With data flowing direct from AP and AR modules in ERP, this market is growing fast. Bundles can be Tokenised and sold to investors looking for a specific credit risk and duration.
All of these assets can be bought and sold today. What Blockchain does is make that process dramatically more efficient thanks to the three big changes that Blockchain brings to investing.
That may sound incremental but it is as revolutionary as moving from hand built cars to Henry Ford’s production line or moving from messages sent on paper to email. In both of those cases, a dramatic rise in efficiency grows the market. In simple terms, a 90% drop in price (destruction) is accompanied by a 10x increase on volume (creation); that is great for entrepreneurs and incumbents that can navigate creative destruction.