Tokenization of real-world assets (RWA) is the process in which real-world assets are added to many tokens so that multiple people can own them. The tokenization is a way in which an individual can own a part of an exclusive painting or rare gem, as it might not be easy for everyone to be able to afford the whole.
The real-world asset can be both tangible and intangible, it can be a building and it can also be a carbon credit. These tokens are placed on blockchains so that it increases transparency, lets more people have access to it, lowers the cost, and reduces operational friction.
Anything in the real world can be made into tokens. It can be a vintage car, a crown piece from the royal, an art piece, a gold necklace, and also US Treasuries.
Any real-world asset can be tokenized. A piece of jewelry can be divided into many pieces and many people can own it, or a painting can be considered as many fractions that can be tokenized, a building or property can be tokenized, and even the stakes of a company can be tokenized.
Tokenized Real-world Assets
Here are some examples of real-world asset tokenization:
Why Is Real-world Asset Tokenization Helpful?
Imagine there is a luxury property that you want to own, or let it be the rarest of all gems or an ancient painting that you are passionate about, but you can not afford to buy or own it as a whole. In this scenario, real-world tokenization can help you to own only a fraction of it with many other people who also own fractions of it.
You can tokenize real estate, energy and renewables, and also private equities.
It can also have financial benefits for you such as:
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What Are The Existing Tokenization Projects?
The concept of tokenization has been executed and there are already multiple projects that do this:
Project Guardian is a tokenization project that has tokenized the bonds and deposits of giant banks and financial corporations such as the Monetary Authority of Singapore (MAS), DBS Bank, JPMorgan, and Marketnode.
Harbor is a tokenization project that tokenizes the shares of companies in blockchain technology.
RealT is a tokenization project that tokenizes fractions of real estate properties. This is done using cryptocurrency.
This project creates tokens for the stakes of private businesses.
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