How Tokenization Can Change Asset Management
The world has changed a great deal, thanks to Bitcoin. The crypto age has brought about new innovations in how almost every industry is run, including and especially financial services.
With concepts like decentralized finance (DeFi) becoming more prominent, it is worth remembering one of the core concepts that started this jump — tokenization. Today, anyone — or any organization — can create a token and offer it up to people. If they believe so much in it (or the project that backs such a token), they purchase it and create a market.
Tokenization used to be a novel concept.
Now, it’s the order of the day.
However, what really is its benefit?
The concept of tokenization is simple — you have a physical asset, and you can create tokens and assign them values representing fractions of the asset.
Imagine you own a building worth $1 million. You need $50,000 to cover some debt payments, but you don’t have enough cash. At the same time, you don’t want to sell the building you own because you think its value will still surge in a few years.
With tokenization, you can kill two birds with one stone — create tokens representing ownership of the share, and someone can purchase $50,000 worth of those tokens. Like that, you get the $50,000 you need to service your endeavors, and the investor gets a 5% ownership stake of your building.
Everyone leaves happy.
Why Tokenization Works
Today, anything can be tokenized — assets, equity in companies, and even services and goods. However, why should you consider tokenization?
Tokenization allows you to create a market for an asset that has otherwise become illiquid.
Refer back to the example of the building worth $1 million. Even if you decide to sell the building, it might take you months to get a buyer that will offer a fair value. With tokenization, however, you can create a market in minutes.
Also, since most people would prefer to invest small sums of money, they will be more comfortable investing for an ownership share of your building. They don’t need to buy up the whole thing — just as much as they need. At the end of the day, everyone benefits from a more liquid and freer market.
Tokenization is also beneficial since it allows the forces of demand and supply to act on an asset’s value. Selling small portions of your asset will increase fractional ownership, allowing a fairer price to prevail. There is no manipulation involved — just the free market acting.
Another critical benefit of tokenization is that it reduces the cost of asset management.
Today, several professionals and processes are involved in transferring ownership of an asset. Lawyer and bankers will take their cut of the costs, and their processes will waste a great deal of time. With tokenization, you can cut these professionals and processes out.
Thus, everyone saves money.
With tokens everywhere across the crypto market, it is always important to invest in something with solid backing. This is why interested investors will be more than impressed with $SCC.
$SCC is a token backed by ScaryChain Capital — a Finance-as-a-Service protocol. ScaryChain Capital allows investors to optimize their returns and yields by investing in some of the most profitable tools in the crypto market. However, it works even better because it picks protocols across some of the most popular blockchains.
With cross-chain functionality, ScaryChain Capital opens investors to a new world of profitability. The platform offers its native token, $SCC, to investors, and this might be the best time to buy. If you’re a fan of undervalued assets, $SCC will be beyond attractive to you.
Audited and Kyc’d by Assure Defi