THE FUTURE WILL BE TOKENIZED
December 8, 2022
What is blockchain?
Blockchain, also known in more technical terms as Distributed ledger technology (DLT), is a distributed database that maintains a continuously growing list of digital transactions spread across a network of computers called nodes. The distribution and storage of data in a decentralized network prevents data falsification or modification. By impulsing a new dimension on the manner in which value can be stored and exchanged, blockchain and its applications are fundamentally changing the way we interact with real world assets. The World Economic Forum estimates that 10% of global GDP will rest on the blockchain by 2027.
What is Tokenization?
Tokenization refers to the process of representing physical, digital or financial assets with tokens on a blockchain platform. Tokenized assets can range from financial instruments like debts, bonds and royalties to legal, contractual and commercial rights or physical assets like art, cars and real estate. Each token and by extension its holder, carries the inherent value, legal ownership and rights associated with the tokenized asset. Although the concept of digitizing assets is not a revolution on its own, blockchain appeared as an innovative and appropriate tool to manage them. Blockchain-enabled tokenization is predicted to have a major impact on every industry across the world in the upcoming years, a study by Prescient & Strategic Intelligence suggests that the global tokenization market size will grow at a CAGR of 19.3% to reach $12.6 billion by 2030.
Tokenization and Blockchain
Combining the concept of tokenization with blockchain enables the development of infrastructures for trading traditionally illiquid assets by automating transfer/acquisition processes with transaction protocols which automatically and instantly execute, control and document token exchange based on transferability terms established by token issuers. By extension, tokenization and transaction protocols enable legal compliance to tokens providing holders with the same rights and safeguards as traditional assets.
By automating the verification of transferability rules and optimizing the transfer of ownership of tokenized assets with protocols while providing constant traceability and accessibility of transaction data, the blockchain favors the optimization of crowdfunding.
TCFX provides stakeholders with a peer to peer secondary market allowing trading on traditionally illiquid assets in private markets and resolves one of the main issues preventing crowdfunding from reaching its full potential.
The transfer of ownership of tokenized assets on the blockchain is almost instantly which leads to significant optimization of asset exchange compared to private market traditional flows.
The automation provided by the distributed ledger technology allows economies of scale in intermediation by limiting compliance costs related to regulations and contracts to which assets are subject. Systemic risks such as counterparty risks are prevented by automated transaction protocols which provide a safe and secure infrastructure to exchange tokenized assets.
Blockchain infrastructures allow constant traceability of data associated with asset movements and by extension prevents fraudulent activities.
Laying down on the blockchain and empowered by the concept of tokenization, TCFX is ambitious to disrupt the crowdfunding sector by providing stakeholders with an efficient peer-to-peer secondary market allowing to introduce liquid assets while optimizing the overall experience of crowdfunding stakeholders.