MUST Protocol competitive landscape: non-fungibility, platforms and x-chain solutions
Analyzing the existing projects of asset tokenization, the MUST team identified a number of key factors that significantly affect the business development and scalability of the projects themselves, as well as the viability of the tokenization protocols and the possibility of using these technologies in the real business.
X-chain. Over the years of development, blockchain technology has embodied plenty of implementations, from the first and global blockchains — the generally recognized digital gold Bitcoin and the pioneer of tokens and smart contracts Ethereum — to private corporate solutions. It can be argued that for projects aimed at the global market and sustainable development, the compatibility of the software part with any infrastructure solution is a necessary feature. Blockchain-agnostic, cross-chain, blockchain-independent — these are the terms used to indicate the possibility of programs to interact with different blockchains.
Platform. The platform logic of business is behind the phenomenal success of the world’s largest technology companies. Alibaba, Alphabet, Amazon, Apple and other global leaders are platforms that not only provide users with products and services, but create infrastructure and an ecosystem for new contiguous businesses and processes, conditions and tools for the work of many independent participants.
Developer tools. The ability for third-party developers to use software solutions and connect external IT systems is another important factor of the scalability of projects. Eliminating the complexity of low-level blockchain programming for external development teams, convenient and functional SDKs and APIs for using the protocol and platform elements can significantly accelerate the spread and adoption of new technology.
Legal tech. Compliance, legal support and harmonization of business processes is the edge of the thin ice for many asset tokenization projects. Fascinated by the brilliant and promising models of economic interactions that have become possible due to the characteristics and capabilities of blockchain technologies, many teams are building their projects without regard for the legal harmonization of processes or without paying due attention to the procedures and mechanics of compliance. According to MUST, asset tokenization and especially asset rights management is a legal tech zone, where the norms and principles of law are of primary importance.
Fungibility. The properties of the token used during the tokenization determine both the protocol architecture and its functionality. Keeping in mind the uniqueness of the absolute majority of assets, the task of establishing a trusted connection of a unique token and a unique asset with the possibility of legalizing the right to a specific asset for a specific token, MUST implements the protocol and the tokenization platform using the non-fungible token (NFT) technology. Based on our existing experience in digitization and asset management, we argue that NFT is a technology that allows to organically incorporate the logic of blockchain and tokenization mechanisms into the existing legal systems of virtually any country.
Off-chain integration. The tasks and processes of real business, of course, go beyond the digital world, and the larger the company, the greater the number of external counterparties participate in its activities. Audit, insurance, financial and other services should be provided within the protocol and architecture of the projects aimed at broad acceptance in the field of asset management.
Proof of asset. The idea of increasing the liquidity of assets through tokenization and even the main characteristic of the blockchain — the immutability of the register of information — are leveled if the asset tokens do not have a direct secure connection with the assets themselves (in particular, physical assets). Protocols and tokenization platforms aim to increase investor confidence in low-liquid assets, only possible when remote access to up-to-date asset information and asset management is provided. A well-considered system of proof of an asset is an indispensable element of a prospective ecosystem of tokenization.
Proof of issuer. A number of blockchain projects, especially teams focusing on the tokenization of documents and educational certificates, pay great attention to the authentication of the token issuer. The universal verification protocol for the issuer of tokens is, in many cases, as important as the proof of asset system, providing the members of tokenization platforms with partners trusted by default.
Non-fungible tokens practice of use is shaping up. ERC-721 demonstrated the blockchain potential that is barely used. Assets and assets rights tokenization in blockchain is stimulating new ideas, business models and start-ups that we couldn’t even imagine before.
MUST is mostly dealing with the application layer providing developers with tools to build application based on this new standard. Developers can create MUST Protocol based DApps while end users can take advantage of their solutions to confirm and transfer rights for assets (eg. collectibles, cars, real estate, equipment, securities, currencies etc.). This will make them safe and highly liquid as actual information goes to blockchain in real-time mode.
By the time this document was being created we could not identify competitors focussed on developing an ERC-721 based unifying platform oriented at rights for assets tokenization. However there are competitors in different niches where MUST Protocol and protocol based higher level DApps can be used.
MUST Protocol is a set of construction blocks for every user. This and the potential market of $280 trillion makes us consider the majority of potential competitors as partners and supporters of the idea of NFT wider implementation. Using unique digital assets is a perfect solution in many cases, and we are sure the technology will be largely accepted in the future. MUST Protocol will provide all these projects with basic infrastructure.
MUST Protocol team is aiming at creating a base to form the environment of non-fungible tokens in blockchain that wouldn’t request confidence, to develop and unite developers of NFT solutions and services.