The essence of digital transformation has always been the act of breaking down traditional barriers and boundaries in search of more equitable, efficient systems. This principle has never been more pertinent than in the current rise of asset tokenization, a process of dividing ownership of physical or intangible assets into multiple shares, or ‘tokens’. Tokenization, underpinned by blockchain technology, presents an intriguing prospect for a vast array of industries, promising to overhaul conventional systems from real estate to franchising, renewable energy to Hollywood.
As far back as 2019, the potential of asset tokenization was recognized by major entities like BNY Mellon, which suggested that it could “dramatically change the dynamic” for investors. Now, four years later, we are beginning to see the potential unfold in various domains.
The real estate industry, rife with obstacles for many investors, is one of the first to feel the benefits of tokenization. The high cost of real estate has long been a deterrent for many would-be investors. Tokenization, however, promises to make ownership of these expensive assets accessible to a wider demographic by dividing them into affordable fractions. This fractional ownership can dramatically reduce the time taken to close a purchase, catalyze transactions, and encourage market liquidity.
Tokenization is also primed to revolutionize the world of franchising. The exorbitant start-up costs associated with opening a franchise, often reaching $5 million, have historically formed a barrier for many entrepreneurs. With tokenization, these costs can be distributed among multiple stakeholders, democratizing access to business opportunities.
In the realm of renewable energy, tokenization presents an innovative spin on crowdfunding. By tokenizing pricey infrastructure projects, new funding could be unlocked for green initiatives, reducing carbon emissions and lowering energy bills. As a democratized investment tool, tokenization could mobilize global commitment towards a sustainable future.
Hollywood is also experiencing the effects of tokenization. Filmmakers and musicians are beginning to utilize tokenization to raise funds for their projects, allowing ardent fans to hold a financial stake in the content they care about. By tokenizing their work, creators are empowered to break free from traditional production houses and record labels, pushing the boundaries of creativity. The success of projects like Stoner Cats, an animated series launched by Mila Kunis in 2021, hints at the future impact of tokenization on the entertainment industry.
However, as with any disruptive technology, tokenization comes with its own set of challenges. Regulatory frameworks, volatility, and a lack of historical data can pose difficulties. Enter new problem solvers like Brickken, a platform that enables businesses to create their own custom Token Store. Brickken aims to demystify the process of tokenization, enabling the creation, sale, and management of digital assets seamlessly.
As Brickken’s chief revenue officer, Ludovico Rossi, points out, “Fractional ownership is the transformative progression of the sharing economy, and asset tokenization is its powerful enabler.” While the mainstream adoption of tokenization may still be on the horizon, Brickken and other pioneers in the space are steadily laying the foundation for a more democratized, equitable financial future. Tokenization, it seems, is poised to revolutionize the way we do business, one fraction at a time.
