Tokenization as a DeFi World Trend
What is the most reliable and stable form of investment in the world?
Most would answer that it's real estate.
In 2023, the world witnessed a new trend in the DeFi market that allowed for increased returns on real estate investments – it's Real-World Asset (RWA) Tokenization. Do you know that you can tokenize any real-world asset and profit from it? In this post, we'll explain what tokenization is, what can be tokenized, and why it's so popular.
What is tokenization?
It's a process that allows you to tokenize real-world assets and profit from their monetization. Many are talking about real estate tokenization, but this trend extends to other real assets as well.
What can be tokenized?
Securities, real estate, goods and services, raw assets, precious metals, insurance, credit records, and more.
How does it work?
- A professional appraiser evaluates the asset's value and determines the total number of tokens representing ownership rights.
- Token creation: Ownership rights to the asset are digitized and recorded on the blockchain as security tokens. Each token represents a share of ownership in the asset.
- Tokens are then sold to investors, making them co-owners of the asset. Tokens can be bought and sold on the secondary market, allowing investors to exchange ownership rights.
Why is tokenization so popular?
The main reason for its popularity is reliability and low volatility. Unlike most cryptocurrencies, which constantly fluctuate in value, digital tokens tied to businesses or valuable assets are more stable. People trust such investments more!
Thus, we see how tokenization is an important and promising tool in the 2023 DeFi market. It's an undeniable fact!
According to Deloitte's analysis, it is expected that by 2030, asset tokenization in the real estate sector alone will reach $1 trillion. And this is just the beginning of the tokenization trend!
We've covered other trends of this year here.
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