Tokenised Asset Classes

Tokenised Assets.

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TLDR below. This is not financial advice.

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General Conclusion

Like asset classes, the tokenised asset class is a way of grouping the types of tokens that exhibit similar characteristics. The way of grouping the tokens is based on the value it represents.

A tokenised asset class is a group of tokenised representation of value which has similar characteristics and behaves similarly in marketplaces. In this article, we focus primarily on tokens created on blockchain by decentralised ecosystems. It is possible for similar tokens to exist that are created by the government (central bank digital currencies, CBDC) or tokens issued by banks. We are only focusing on tokens created by the decentralised community.

Market Size

In research and surveys from institutions such as WEF, they forecast that up to 10% of GDP will be stored and transacted with the help of blockchain technology by 2025.

At the same time, Finoa Banking also forecasts that the tokenised asset market will reach ~$24trn by 2027. This does not include currently not measured (or not existing) asset classes or unidentified tokenization use cases of intangible assets (eg patents, where they expect significant usage rights, where they expect significant usage innovation and growth.

Source: Finoa Banking

Tokenised asset classes

• Commodities: tokenised silver, tokenised gold, Bitcoin

• Tokenised Securities: off-chain securities on blockchain like real estate, equities (stocks), fixed income (bonds), derivatives (i.e., structured products)

• Security token: tokens that represent on-chain securities like equity of a revenue generating protocol

• Exchange (Money to trade and exchange inside the ecosystem): cash and cash equivalents (money markets)

• Stable token (to trade and exchange outside the ecosystem): tokenised USD, tokenised GBP

• Utility: the ability to get a discount, social token of an individual, loyalty points

• Intellectual property: music, art, patents, copyrights, licenses

There are many ways you can define the specific token functions, especially from a legal perspective, and start specifying what the token can and cannot do. But we are not there yet. This is a general classification of tokenised asset classes, based on the design of token-based ecosystems.

What Else Did You Miss?

• Commodities

• Tokenised securities

• Security Token

• Exchange

• Stable

• Utility

• Intellectual property

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TLDR:

Tokenisation of assets includes physical assets and digital assets. Tokenisation of digital assets is very simple and currently is not too difficult a problem, it is just that they have a value equal to the value of the original asset.

The tokenisation of physical assets is a new thing and a good direction for development. Currently, tokenisation of securities is the most successful application, and in the future we will have many types of tokenised assets. However, in order to tokenise physical assets like real estate or gold, they must be secured at another party with transparency. Right now this is still a problem.

Imagine if we had a good enough solution to bring physical assets into the DeFi space how powerful this market would grow. Hopefully we will soon have the optimal solution to tokenise physical assets into the DeFi space and turn it into the most vibrant financial market on the planet.

Ps: Order the textbook "Economics and Math of Token Engineering and DeFi" today!