Tokenization — Scallop Learn
Modern investments as we have today can be dated to the distant past however over the years investments have taken different forms with securities and real estate investments being very popular.
Investments in securities and real estate assets are categories of physical tradable financial assets subject to regulations and in most cases due to unavailability of liquidity providers, making them only accessible to institutional investors. The materialization of blockchain technology, web 3.0, and decentralized finance (DeFi) has refashioned the traditional investment ways of exchange of value.
Real Estate assets such as lands and houses and securities such as but not limited to mutual funds, stocks, equities, and bonds can be tokenized and traded effectively on the blockchain. The potential blockchain offers on this note is a prospective modification of how physical assets are traded, this is done by tokenizing physical assets to digital ones and hosting decentralized apps and marketplaces through which those tokenized or digital assets can be stored and traded respectively.
What then is Tokenization?
Tokenization therefore would serve as a proof of ownership and store of value of assets (such as a building or shares in a company) in digital tokens. Given that securities and real estate trading of real and physical assets are governed by regulatory bodies then the same should be expected on the blockchain.
Scallop as blockchain
The Scallop Chain is a complete single-binary blockchain distribution focused on simplicity, and speed, and it’s easily adjustable by its developers. The Scallop chain supports both EVM and WASM smart contracts.
More opportunities are opening up with the emergence and continuous development of decentralized finance (DeFi) systems, the aim of which is to shape traditional finance (TradFi) into a globally accessible form.
Scallop is the world’s first regulated Decentralised Finance (DeFi) banking application, allowing both retail and institutional participants to effortlessly access the benefits of decentralized ecosystems, with the convenience of their traditional bank accounts.
Tokenization: A Case Study Using Scallop
To better understand the importance of Tokenization of real-world assets, let’s look at a case of a non-liquid asset (i.e assets that cannot easily be converted to cash), let’s say a land valued at $2M. Investing in this type of asset can only be carried out by institutional or large investors.
However with the tokenization of this asset, it can be split into 100,000 units of tokenized or digital assets valued at $20 each, and with Scallop’s custodial services one can tokenize their assets making them theirs and store it safely using their custodian privileges (i.e they have access to their tokenized assets).
One can also put up their digital assets in Scallop’s secondary marketplace; where these tokenized assets can be traded using smart contracts to ensure everyone who invests gets their share of their tokenized asset(s).
Scallop and its opportunities
Given Scallop’s unique design, institutional and retail partners will be able to work directly with Scallop, allowing them to create secure custodian services and a marketplace for their tokenized securities or digital real estate.
Custodian services enable issuers to have total control of their tokenized assets or digital assets.
Read more on Tokenization on the Scallop Learn Platform: https://scallop-1.gitbook.io/scallop-learn/guides/defi/tokenisation
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