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How Blockchain Is Redefining Asset Ownership in the Web3 Era
Paris Blockchain Week, April 9, 2024. Photographer: Nathan Laine/Bloomberg
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The digital revolution has ushered in numerous advances across industries, with one of the most significant developments in recent years being the emergence of blockchain technology and its application in asset tokenization. This innovation is not just a technical upgrade; it represents a fundamental shift in the way assets are created, managed, and transferred. In the Web3 era, tokenization is poised to redefine asset ownership, offering unprecedented opportunities for liquidity, accessibility, and security across asset classes.
The concept of tokenization
Tokenization involves converting physical and intangible assets into digital tokens on a blockchain. This process allows assets such as real estate, commodities, intellectual property (IP), and even art to be digitally represented. Each token serves as proof of ownership, allowing for fractional ownership, easier transferability, and greater transparency. The underlying blockchain technology ensures that these tokens are secure, immutable, and traceable, providing a robust framework for managing and exchanging assets.
“Tokenization bridges the gap between the physical and digital worlds, creating new opportunities for ownership and investment,” he explains. Vigen Badalyana leading figure in the field of asset tokenization, co-founder of SoftConstruct and creator of the AKNEYE project. Eye of the Tiger is an innovative platform that combines traditional sculpture with Non-Fungible Tokens (NFTs), offering a unique mix of physical and digital art. Badalyan’s vision extends beyond the realm of art, as he sees tokenization as a transformative force across multiple industries.
As blockchain technology continues to evolve, the scope of tokenization will expand to encompass a wider range of assets. The integration of smart contracts, self-executing contracts with the terms of the agreement written directly into the code, will further simplify transactions, reducing the need for intermediaries and minimizing costs.
Additionally, the advent of decentralized finance (DeFi) platforms is likely to improve the liquidity and accessibility of tokenized assets. These platforms allow users to lend, borrow, and trade assets in a decentralized manner, offering greater flexibility and control.
Real Estate: Tokenization of Physical Assets
Real estate has long been a profitable but illiquid asset class. Tokenization offers a solution by allowing homeowners to convert their properties into digital tokens, each representing a fraction of the value of the property. This approach democratizes real estate investing, allowing more people to participate in real estate ownership without having to have significant capital.
Tokenization not only facilitates fractional ownership, but also increases liquidity, as these tokens can be traded on secondary markets. This innovation opens up new avenues for investors and provides real estate owners with faster access to capital. Here’s what Buya shared ownership platform, is building its business around. CoBuy makes it easy for friends, family and loved ones to co-own their homes by creating a unique tokenized on-chain representation that seamlessly connects decisions, documents, finances and events, saving consumers thousands of dollars in legal fees and providing peace of mind.
Raw materials and intellectual property: broadening horizons
In addition to real estate, tokenization is making waves in the commodities market. Precious metals, oil, and other tangible assets can be tokenized, offering investors a safe and efficient way to trade these commodities. For example, companies like TradeCloud and Paxos have developed platforms that allow for the tokenization of gold, making it easier for investors to buy, sell, and transfer ownership.
Likewise, intellectual property (IP) is another area ripe for tokenization. Patents, copyrights, and trademarks can be digitized, creating a transparent and efficient system for managing IP. This approach can help mitigate issues such as IP theft and fraud by providing a clear and immutable record of ownership and transactions. An example of this is ReinventDAOa platform that allows white-collar creators to tokenize their know-how in the form of tradable IP derivatives and allows investors and sponsors to participate in the future performance of the intellectual capital raising.
The Art of Tokenization: Spotlight on AKNEYE
Art has always been a unique and valuable asset class, often subject to issues of provenance and authenticity. Tokenization addresses these challenges by providing a secure and transparent way to verify ownership and authenticity. The AKNEYE project, led by Vigen Badalyan, exemplifies how art can thrive in the digital age.
AKNEYE is an innovative platform that merges traditional sculpture with non-fungible tokens (NFTs), … [+] offering a unique combination of physical and digital art.
Eye of the Tiger
AKNEYE combines traditional sculpture with NFTs, creating eye sculptures that are both physical and digital. Each sculpture is tokenized and displayed in the AKNEYE digital gallery within Fastexverse, an immersive virtual universe. This innovative approach enables dynamic interactions between the artwork and its audience through the manipulation of light, sound, and movement, enhancing the overall experience. Additionally, each sculpture includes a glass bottle as a tear duct, enhancing its uniqueness.
“Art has always been about expression and connection,” Badalyan says. “By tokenizing art, we not only preserve its value and authenticity, but also create new ways for people to engage and invest in it.”
Vigen Badalyan envisions a transformative future for asset ownership. “With AKNEYE, we aim to demonstrate how art can evolve in the Web3 era, while also highlighting the broader implications for other asset classes,” explains Badalyan.
Conclusion
The era of tokenization is upon us, heralding a new era of asset ownership and management. By converting physical and intangible assets into digital tokens, blockchain technology offers unprecedented opportunities for liquidity, security, and accessibility. Visionaries like Vigen Badalyan are leading the charge with innovative projects like AKNEYE, demonstrating how art and other assets can thrive in the Web3 era. “Tokenization is just the beginning,” he says. “As we continue to develop and refine these technologies, we will see a profound shift in the way assets are managed and traded. The future holds incredible potential for greater transparency, efficiency, and inclusivity in the financial ecosystem,” Badalyan says.
As we continue to explore the possibilities of tokenization, it is clear that this innovation will play a critical role in shaping the future of finance and investing. In this dynamic landscape, staying informed and adaptable is key to unlocking the full potential of tokenization. Whether you are an investor, a creator, or simply an enthusiast, the Web3 era offers exciting opportunities to redefine how we perceive and interact with assets.