4 Bold Candidates For Tokenization’s Defining Use-Case 

David Azaraf | June 1, 2023
4 min read
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Tokenization, a groundbreaking technology, is projected to reach trillions by 2030 according to industry experts at Citigroup and Boston Consulting Group (BCG). While Initial Coin Offerings (ICOs), Decentralized Finance (DeFi), and Non-Fungible Tokens (NFTs) have captured significant attention and investor interest, security tokens are yet to achieve the same level of enthusiasm. As the momentum for tokenization continues to grow, the search is on for the one killer app that will propel tokenization into the mainstream.

The Tipping Point of Web3 Investment Narratives

Over the past few years, we have witnessed significant shifts in the narrative of Web3 investments, with ICOs, DeFi, and NFTs emerging as transformative phenomena. Each narrative starts off as a mere idea, before a single project breaks the chasm and turns it into a bona fide star. Take DeFi for example. Decentralized Finance (DeFi) emerged as early as 2018 as the next big thing, offering innovative financial services on the blockchain. Yet it wasn’t until Uniswap, the first widely-used decentralized exchange, came on the scene a couple of years later that DeFi truly exploded, leading to hundreds of billions of dollars locked in DeFi protocols. 

More recently, in 2022, Non-Fungible Tokens (NFTs) had their own tipping point thanks to the Bored Ape Yacht Club, the first NFT collection to penetrate the wider pop culture. These tipping points highlight the dynamic nature of Web3 investments, where new trends quickly emerge and reshape the landscape of tokenization and blockchain technologies.

Top 4 Candidates for Tokenization’s Use-Case 

Tokenization, while sharing similarities with previous Web3 trends like DeFi and NFTs, diverges significantly in terms of regulatory considerations. Tokenization primarily focuses on securities, which introduces unique use cases compared to other forms of digital assets. With this distinction in mind, let’s explore the top four candidates for tokenization’s killer app.

  1. Tokenized Real Estate: Tokenizing real estate assets provides an avenue for fractional ownership and increased liquidity in the traditionally illiquid real estate market. By allowing investors to own a fraction of a property through digital tokens, tokenization can unlock broader access to lucrative real estate investment opportunities. Examples of companies successfully implementing tokenized real estate include RealT, offering fractional ownership and transparent investment opportunities.
  1. Tokenized Startup Equity: Tokenizing startup equity offers a streamlined approach to raising capital and facilitates global investor participation in early-stage ventures. By representing ownership stakes through digital tokens, startups can unlock liquidity and fractional ownership, providing investors with more accessible and diverse investment options. 
  1. Tokenized Public Company Shares: Tokenizing shares of public companies provides a pathway to enhanced liquidity, programmable ownership features, and efficient settlement processes. Through the representation of ownership on the blockchain, tokenization democratizes access to investing in public companies and introduces new avenues for trading. INX is pioneering the tokenization of public company shares through its work with Greenbriar Capital, a leading developer of sustainable real estate that will list shares as security tokens on INX. 
  1. Tokenized Yield-Bearing Assets: Tokenizing yield-bearing assets, such as treasury bonds or other income-generating instruments, offers investors the ability to access income streams in a digital form. These tokens can be traded seamlessly, providing increased liquidity and enabling their utilization as collateral in decentralized finance (DeFi) applications.

Tokenization The INX Way

Tokenization offers numerous benefits that can revolutionize the financial landscape. The ability to trade tokenized assets 24/7/365 brings unprecedented liquidity and accessibility to traditional markets. Moreover, these assets can be utilized in decentralized finance (DeFi)-like applications as collateral for loans, unlocking new avenues for financial inclusion and innovation. As tokenization continues to gain momentum, it has the potential to reshape investment practices and empower individuals globally.

In the realm of tokenization, INX stands out as a notable player. INX is a platform that combines the advantages of traditional securities offerings with the benefits of blockchain technology. By facilitating compliant tokenization and trading of security tokens, INX is contributing to the growth and development of the tokenization ecosystem.

David Azaraf June 1, 2023

Crypto enthusiast, help businesses plug into the token economy

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