Tokenization South Africa

Tokenization is the process of converting physical (and non-physical) assets into digital tokens on a blockchain. The concept has become relatively popular in the cryptocurrency space and is beginning to gain ground in traditional industries. Real estate, artwork, events - this is just a short list of assets that companies or individuals are starting to token.

What is tokenomics

GLOBAL ASSET TOKENIZATION PROCESS

Tokenization is a new form of business digitization based on decentralized Blockchain technology.

Advantages of tokenization

All values can be placed on the Blockchain

Imagine you want to invest in real estate, but your initial investment is modest – for example, 10,000 EUR. You may want to gradually increase your investment, but you don’t have that option.

For example, you decide to invest a few thousand every three to four months. Obviously, it will not work with the traditional real estate market, because real estate has a high price. How do you buy an apartment or a house?
Let’s turn the situation around. Imagine you have some property – say an apartment. You need cash fast. The apartment is valued at EUR 200,000, but you only need EUR 10,000. You can do it quickly without having a lot of office around.

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Tokenization is a method that converts rights to an asset into a digital token

Suppose you have a property for 200,000 EUR. Tokenization can turn this property into 200,000 tokens (the number is completely arbitrary, so it can be 2 million tokens). Thus, each token represents 0.0005% of the underlying asset. Finally, we issue a token on a platform that supports smart contracts, such as Ethereum, so that tokens can be freely purchased and sold on various exchanges.

When you buy one token, you are actually buying 0.0005% of the ownership asset. You buy 100,000 tokens and own 50% of your assets. You buy all 200,000 tokens and you are a 100% owner of the asset. Obviously, you are not becoming the legal owner of the property. However, because Blockchain is a public book that is immutable, it ensures that once you purchase tokens, no one can “erase” your property, even if it is not registered in the land registry. It should be clear why Blockchain allows this type of service.

The tokenization of other assets works in a similar way. If there is a EUR 50 million Picasso image, it can also be tokenized. The same applies to gold and diamonds and other movable and immovable values.

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