From art to buildings, the way people invest is going to be transformed entirely with the arrival of asset tokenization. Asset tokenization is a predominant feature of blockchain that currently threatens to disrupt many industries, in particular, the finance and investment management space.
Let’s get an idea about What is Asset tokenization?
In the simplest terms, you can understand asset tokenization as a process of converting the rights of your real-world physical assets (e.g. gold, real estate property etc.) into a digital token that is prepared and managed via a blockchain.
A blockchain security token is generally a digital representation of a real tradable asset, or typically, it is termed by crypto experts as a unit of value. These tokens are generally issued during the security Token Offerings (STOs) by the companies to investors, allowing them to hold a piece of company shares, equity or ownership rights.
So, you must be wondering what does it all mean for your Business?
Well, the answer is quite intriguing. Tokenizing your company assets like shares, ownership, projects, etc. (typically issuing a security token) increases the investor trust on your firm and the STO organized by you for fundraising.
Security tokens are regulated, it offers investment protection to potential investors of your firm, which in turn help you raise funds easily.
Benefits of Asset Tokenization for Companies
- Tokenizing your company assets provides greater liquidity to your investors.
- Tokenizing assets also brings higher transparency in company fundraising or STO event.
- Businesses can raise funds for early-stage projects that are mostly confined to venture capital funds or accredited angel investors via tokenizing them.
Tokenization Feature: DCI Ecosystem
Tokenization is a very innovative feature of DCI–a unique cross-asset investment ecosystem, that allows the investors to transform their real-world assets into a digital token with immediate market marking function.
The firms looking to raise funds for their existing projects or early-stage projects can take the help of the DCI ecosystem to tokenize their projects or other company assets.
DCI allows companies to generate various types of tokens like Digitized Project Backed Tokens (DBPT), Project Investment Tranches Token etc. for converting their assets into digital tokens.
How will DCI Do it?
The companies looking to raise capital are allowed to generate digitized project backed tokens (DBPT) for their existing projects to avail loan. The loan will be offered to the company based on the project funding needs as well as the annual revenue generated by the project.
The loan will continue until the company pays back 1.5 to 3 times of the actual loan amount (depending upon the initial agreement). This is highly beneficial for small businesses who have annual revenue of around one million to five million dollars.
Similarly, project investment tranches Token can also be issued by the companies to raise funds from investors. In case of project investment tranches token, the payments will be locked, until the company meets the specific contractual agreements.
DCI will ensure that the company receives the payment/funding upon the meeting of specific contractual conditions.
Third-party Support is There Too…!!!!
DCI will also partner with multiple third parties like Accountants, Lawyers/solicitors & legal firms, Fund Managers, Notary businesses, etc. who will assist both the investors and fundraising companies in the DCI Ecosystem.
Any disputes or legal issues that arise between the investor and fundraising company will be resolved by the solicitors/arbitrators.
The companies looking to raise funds via STO can take the help of accountants for financial feasibility analysis, firm auditing, and account management.
Similarly, the lawyers and legal firms will offer expert legal advice to companies about how to conduct their STO properly by staying compliant to jurisdiction.
To unlock more secrets about DCI, please visit the DCI Ecosystem and register on the website: