The use of tokens in financial markets with the advent of Defi, has nevertheless kept growing, and asset tokenization has become one of the most prominent use-cases and applications. Such assets include securities (e.g. stocks and bonds), but also commodities (e.g. gold) and other non-financial assets and now, RealtyDao is disrupting the space to tokenize digital assets we call digital native assets such as tld’s, domains, and crypto projects.
The Premise of Tokenization
Blockchain technology promises to take this process one step further, using cryptocurrencies to “tokenize” all types of asset classes. Tokenization is the process where the rights to an asset are transferred into a digital token on a blockchain using smart contracts. An idea that permits the advantage of cryptocurrencies while keeping the characteristics of the asset.
Asset Tokenization — A Definition
The simplest answer to what is asset tokenization on the blockchain is that it is a process through which a blockchain token is issued to digitally represent any real tradeable asset.
Types of Tokens And How It is Applied in the Blockchain
To ensure that you get the best perks of investing your efforts into the development of the tokenized asset, tokens are broadly divided into two bases:
1. On the Basis of Nature
Tangible Assets — The term represents a set of assets that holds some monetary value and is available usually in a physical form.
Fungible Assets — These digital assets are created such that every token is equivalent to the next. Meaning, one bitcoin is equal to one bitcoin and is interchangeable with one bitcoin only.
Non-Fungible Assets — They are designed as unique and can’t be interchangeable.
2. On the Basis of Speculation
Currency Tokens — These tokens represent currencies in digital form.
Utility Tokens — The term refers to a digital token that is issued to support funding for the development of cryptocurrency and can be later employed for purchasing a particular product or service offered by the issuer of the cryptocurrency.
Security Tokens –Security tokens, one of the cryptocurrency trends, are basically the digital representation of traditional securities.
THE RDAO TOKEN
Now as we are familiar with the types of tokenization of assets via distributed ledger blockchain technology, it’s the right time to look into what RDAO is.
RDAO is designed as a fungible token.
With its smart contract design using ERC 20, RDAO is, therefore, a fungible token.In the RealtyDao marketplace, you can trade and buy fractions or (eSh) of digital native assets using RDAO tokens.
RDAO is also designed as a utility token.
The role of the RDAO token is to provide the members access to participate in the marketplace and its many features.
The tokenization of assets involves the creation of digital tokens representing digital native assets issued on the blockchain. The potential of asset tokenization is theoretically unlimited, as any digital asset can allegedly be “put on the blockchain”.
Our goal is to create a collective coop marketplace of creators and asset owners that can
tokenize and govern fractionalized digital native assets, may it be domains, new TLDs by Handshake or crypto projects
push these DNA’s into the DeFi liquidity markets instantly making your digital native assets liquid and earn on APY
increase value to DNAs by using DNA tools and apps such as Referrals, Contrib, eShares.
Why Tokenize Digital Native Assets?
These are some of the most important benefits to a system of asset tokenization:
New and affordable investment opportunities.
Being able to tokenize assets opens up new alternative investment opportunities for asset managers and their clients, and RealtyDao’s infrastructure is in place to be able to manage tokenized assets.
One of the prime benefits of Digital Native Asset tokenization is enhanced liquidity.
Presently, the market for digital assets is not liquid. Because of this, it takes more time for buyers and sellers to know about each other and the services they offer.
They also have to spend considerable time deciding the factors for doing business together and hiring lawyers, and other service providers for building a contract for executing the transaction.
But, with the adoption of asset tokenization, this process becomes smoother and streamlined. It introduces a blockchain platform where tokens represent private company securities and are sold to participants who would have pre-vetted in such areas as authorized investors with adequate capital to take the risk.
These investors can exit the platform anytime by selling their tokens on a secondary market easily and efficiently. They won’t have to suffer from the hassle of early redemption which is an expensive affair.
This, as a whole, will encourage high net worth individuals and agencies to make an investment in private company securities. And ultimately, build a global market for these private securities.
One of the blockchain’s greatest strengths is its imperviousness to external tampering. It’s virtually impossible to forge a transaction on a public ledger since doing so would require taking control of more than half the devices on a given network.
This would make payment processing much more secure, and give organization owners and contributors alike more confidence in their transactions.·
While there are some arguments against the notion of fostering employee-owned businesses, there are many benefits to this arrangement — for both employees and owners. Paying contributors with fractional ownership in the organization they’re contributing to incentivizes them to do more for that organization. The better they perform for the company, the more valuable their shares will become (and the more shares they’ll earn simultaneously).
Options for Startup funding.
The fractional ownership model also presents a viable option to entrepreneurs who might otherwise be stuck without employees due to limited funding. Rather than paying the team building your business with cash, you could pay them in fractional ownership in the company, which serves as a currency all its own.·
Decentralization and Asset Autonomy.
Another prospective benefit is the “true” autonomy of the organizations created for this process. Ideally, an entrepreneur could purchase a domain for a given function and establish rules for how fractional ownership is to be distributed, how value is to be exchanged, and how people can contribute.
Once the setup is complete, contributors can take charge of operations, and the company can operate with minimal oversight or need for financial management.·
Blockchain-based currency transactions tend to be cheaper than their traditional financial counterparts, especially on a large enough scale. This would be minimal compared to other benefits, but could still save a company significant money over the course of the business’s development.
Since transactions of tokens will be done using smart contracts, a major portion of the process will be automated. This will cut down the number of intermediaries and the efforts required in administering the whole process. This will eventually result in faster and cost-effective transactions, which will be yet another advantage of tokenization of assets.
There are limitless potential applications for this system, as well. Nearly any organization that relies on contributions of work or value from individual users can benefit from the autonomy that blockchain can provide.
These are some of the most notable areas for potential development:·
Software development, design, and content marketing. Functioning almost like an agency, an autonomous organization could allow software developers, graphic designers, and writers to meet specs as requested by paying clients or contribute materials that otherwise boost the value of the company, in exchange for fractional ownership.·
Other creative works and intellectual property. Any type of creative work or intellectual property, including stock photos or music to be used in videos, could be similarly tokenized.·
Almost any equity interest. Any company could find a use to tokenize its equity ownership, especially as a way to raise funds. There’s no ceiling to the creative potential in leveraging this technology.
Accessibility is also one of the prime benefits of asset tokenization on the blockchain surface.
The concept to tokenize an asset on the blockchain allows fragmentation of assets to the minimum possible amounts in the form of tokens and encourages investors to get a small fraction of shares. This opens doors for different investors and cuts down the minimum investment period and amount.
Transparency is yet another advantage of tokenization.
In tokenization of assets, the token-holders rights and responsibilities are embedded in the contracts that define token attributes, along with a complete record of ownership. This gives you an idea of whom you are dealing with, what power they have, and whom they have purchased this token from. Something that adds transparency to the whole process.
With the introduction of Smart contracts and characteristics like immutability, tokenization has also reduced the number of intermediaries required in a transaction.
Key Challenges for the Future
There are some potential challenges to overcome in the near future, however.·
Regulatory hurdles and consumer protections.
Everything related to finances on the blockchain is new territory for politicians and economists to consider. Owning asset tokens as fractional shares of a company wouldn’t quite be like owning equity in the company, and wouldn’t quite be like getting paid in a traditional form of currency. Instead, it’s a kind of middle ground, and middle grounds are hard to regulate.
Some countries, like China, have taken a firm stance against the use of cryptocurrency, so it’s likely they’d have a similarly strict stance against asset tokenization. Other countries will need to develop some form of consumer protection to prevent fraud and ensure contributors understand what they’re getting into when they work for fractional ownership.·
Liquidity and true value.
New autonomous organizations may face the same problems that other new ICOs or penny stocks have faced in the past: low liquidity. The value of each asset token would likely be determined by the market, much like stocks are in mainstream finance, but without any reliable existing models, the price would likely be volatile.
Add to that some degree of difficulty in selling your equity for cash, and you might be stuck with a form of payment that’s either hard to trade for cash or unreliable in terms of value.·
Reliance on separate entities.
As of now, there isn’t a standard process for token distribution, nor is there a single authority that’s taking charge of issuing fractional shares.
This will inevitably lead to confusion and inconsistency as more autonomous organizations begin to emerge. Consumers may incorrectly base their expectations on a single experience, then misread how they can earn tokens on other platforms.
Some less reputable companies may also take advantage of ambiguous rules or legal loopholes to take advantage of unsuspecting consumers.
There are many applications for the blockchain that are currently left untapped, and RealtyDao is poised to become one that would serve as a template for future digital native asset tokenization.
We are soft-launching the token on Nov. 22, 3p.m. We invite you to help us govern the future of digital native tokens.