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Asset Tokenization as an Industry Game Changer

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Asset Tokenization as an Industry Game Changer

  1. 1. Asset Tokenization as an Industry Game Changer Jongseung Kim SK telecom Blockchain Business Development Unit 2018. 9. 12
  2. 2. Why Asset Tokenization?
  3. 3. Blockchain Initiatives NewBiz. Development EfficiencyPlay Digital Asset Market Record Keeper Crypto-Wallet ID/Authentication BlockchainDisruptor (Startup) Logistics Crypto-Exchange SupplyChain P2PEnergyTrading RealEstateService P2PInsurance Digital Gold Service CarbonTradingSocial Platform HealthRecord LandRegistry Digital Voting BlockchainCorePlatform Legacy Transformation Short-Term Value Driven (Legally approved) ReduceCost (LegacyIntegrated) ICO Driven ReduceFraud Mid-Term <Source:PayAttention to These4TypesofBlockchainBusinessInitiatives(Gartner, 2018)>
  4. 4. What is Asset? <Source:https://en.wikipedia.org/wiki/Asset> ü In financial accounting, an asset is an economicresource. ü Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company to produce positive economic value is an asset. ü Assets represent value ofownership that can be convertedinto cash(although cash itself is also considered an asset). • Current Assets :Cash andcash equivalents, Inventory, Prepaidexpenses • Fixed Assets :land, buildings,machinery, furniture,tools, IT equipment Tangible Assets • Goodwill,copyrights,trademarks, patents and computer programs, etc. • Financialassets, includingsuchitems as accounts receivable,bondsand stocks, etc. Intangible Assets
  5. 5. Asset backed Tokens <Source:https://en.wikipedia.org/wiki/Property_rights_(economics)> Property (Asset) Rights Right to Earn Income from the Good Right to Enforce Property Rights •Needtobe RegisteredLegally •Profit is Divided Security Token Utility Token Right to Transfer the Goodto Others Right to Use and Occupythe Good •TimesharewithoutOwnership •Accessis ControlledbyContract -Tokens are digital representations ofreal- world assets, are thus backed bythem -Rights are grated tothe token holders.
  6. 6. Digitization vs. Tokenization <Source:https://bankex.com/static/whitepaper.214a1621.pdf> • Automated smart contracts for deal execution • Commands for automatic transactions • Formulas forcalculationof the asset price • Automatic validationofthe initialdata Tokenization = +Digitization Financial Components
  7. 7. Tokenizing assets : 60+ blockchain startups <Source:http://researchly.leobosankic.com/2018/06/29/blockchain-companies-tokenizing-the-real-world> Real Estate Realisto,Bitproperty,DomusCoins,imbrex,Brickblock Utilities WePowerNetwork,water.bankex Commodities OneGram, Orocrypt,DigixDAO, ChainTrade,Smartlands,GoldMint People TokenStars Collections: Art andtrading cards Maecenas,EtherLegends Media and Apps: Financing movies, Instagram accounts, Apps MovieCoin,AppToken,MEDIATOKEN Traditional financial assets BlackmoonCrypto,Smartlands,Dharma, CoinLoan,BlockchainCapital
  8. 8. Benefits of Asset tokenization <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson> § Liquidity ofassets / Liquidity Premiums § New economicmodels around asset ownership, such as fractional ownership. § Diversification ofrisk arising out of asset ownership § Eliminating temporal/territorial barriers for asset owners forattracting investments § Reducing entry barriers for trading and investing § Newer models of raising capital, by allowing projects that are under development to issue shares in form of tokens to finance project development § Utilizing network effectfor certain products to increase their popularity in the market, by providing direct financial incentive to fractionalowners § Reducing administrative expenses
  9. 9. Real Estate Asset Tokenization Service Cases
  10. 10. Global Real Estate Universe in Comparison <Source:http://www.savills.com/impacts/economic-trends/8-things-you-need-to-know-about-the-value-of-global-real-estate.html>
  11. 11. Global Real Estate’s Annual Growth <Source:http://www.savills.com/blog/article/216300/residential-property/how-much-is-the-world-worth.aspx>
  12. 12. 44 Real Estate Cryptocurrencies <Source:https://cryptoslate.com/cryptos/real-estate>
  13. 13. Crowdvilla : $24,900,000 in properties’ contributions <Source:https://crowdvilla.io>
  14. 14. Crowdvilla : Model Overview <Source:https://crowdvilla.io>
  15. 15. Crowdvilla : Token Point System <Source:https://crowdvilla.io> ü Each Crowdvilla Token(CRV) denotes ashare of time-value for the use ofall properties in the Crowdvilla portfolio. ü CRV holders earn Crowdpoint Tokens(CROWD) in perpetuity(i.e.on an ongoing basis for as long as the portfolioexists). ü CROWD Tokensare used to book stays in the properties. ü The number ofCROWD Tokens generated is proportionalto the number of CRV Tokens held and the length ofthe holding period.
  16. 16. REIDAO’ Model <Source:https://reidao.io/#benefits> ü Every real estate that is registered will have its own Ethereum address where users can visit and retrieve information about the property, including its ownership details. ü REIDAO’sunique property token will follow acertain standard that makes it usable for otherservices built on the Ethereum blockchain. Affordable,Diversification, Market Liquidity, Versatility, Global, Security
  17. 17. Primalbase: Mission & Business Model <Source:https://primalbase.com> Primalbase is transforming traditional officerental and creating a next-generation community-based ecosystem where it is possible to share, sell or rent out high-quality working spaces using Ethereum and Waves-based digital tokens.
  18. 18. Primalbase: Workspaces <Source:https://primalbase.com> Tokenpossession providesunlimitedlifetimeaccess to all Primalbase workspaces. • 1 PBT — 1 workspace for 1 personat any location. • 4 PBT — 1 private officeformax. 2 weeksdependingonits availability
  19. 19. Imbrex : Vision <Source:https://imbrex.io/#!> Imbrex is foundedon the principle that the real estate industry should be in controlof its proprietary data. Listing agents should have direct access to their leads and exposure on a global real estate network.
  20. 20. Imbrex : Data Escrow Contract <Source:https://www.linkedin.com/pulse/official-guide-real-estate-blockchain-stephen-king>
  21. 21. Asset Tokenization Platforms
  22. 22. Tokenestate : Tokenization as a Service for Real Estate Funds <Source:https://tokenestate.io/index.html> ü Tokenestate provides an end-to-end solution for real estate fund managers to tokenize their fund,issue their own real estate tokens in formof cryptosecuritiesand access to a large poolof retail and institutional investors. ü Tokenestate will take care of all legal aspects, required technical solutions and the fund raising process.
  23. 23. Tokenestate : Conceptual view of Tokenestate.io, TEIVs & RETOs <Source:https://tokenestate.io/Tokenestate_io_Whitepaper.pdf>
  24. 24. Bitproperty : Vision <Source:https://btptoken.io/en> ü Bitproperty is a decentralised real estate platform powered by Ethereum smart contracts. ü Bitproperty has two types of token: the BTP platform token and individual property asset tokens. ü BTP tokens represent the inherent value of the platform and provide holderswith income fromtransaction fees within the platform in proportionto the amount they own.
  25. 25. Bitproperty : How it works <Source:https://btptoken.io/en>
  26. 26. Bitproperty : Real Estate Purchasing Due Diligence <Source:https://realisto.io/files/papers/Whitepaper/REALISTO_Whitepaper_V1.2_EN.pdf>
  27. 27. Bitproperty : Offering Projects <Source:https://btptoken.io/en>
  28. 28. BANKEX : Operating system for capital markets <Source:https://bankex.com/en> • BANKEX is developingatokenizationecosystem, providingtechnology/servicesat everystage. • BANKEX brings bank-as-a-service and blockchaintogetherto transform capital markets.
  29. 29. BANKEX : Tokenization Process <Source:https://bankex.com/static/whitepaper.214a1621.pdf>
  30. 30. Swarm Fund : Mission and Swarm Platform Structure <Source:https://swarm.fund/swarm-basic> ü Swarm Fund is the blockchain for private equity. ü It’s a fully decentralized capital market place that democratizes investing by using the power ofthe blockchain to open up high-return, alternative investment classes to smaller investors through asset-backed funds using cryptocurrencytokens.
  31. 31. Swarm Fund : Basic Structure of the Swarm Token <Source:https://docs.swarm.fund/swarm-whitepaper-eng.pdf> SRC20 security tokens: • represent ownershipofpart ofan object or“asset”, • allowholders to manage that asset through voting, • secure a right to any revenuestreams from the asset, and • are tradable ina regulatory compliantmanner.
  32. 32. What’s the Issues?
  33. 33. Problems and Challenges <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson> Trusted issuers • Asset backedtokens needto be based onthe certainty that usingthe tokens in any future point of the time, the participants can redeem their real-world assets. Regulatory Vacuum • Currentlythere is regulatory vacuum overa big numberof questionsof howwill this space shall be regulated. Legal enforceability ofproperty rights • The fundamentalquestion is whetherowningtokensconfers ownershipoverthe correspondingasset. Digital identity and KYC/AML • Digital ID marketplace needs to beintegrated into thetokenizationplatforms that meet the stringent standards ofbiggest regulatory bodies,such as SEC. Asset valuations/ rating • There is a needoftrusted intermediaries and oracles toprovidesuch valuation and rating data onasset backedtokens.
  34. 34. Technology Issues ü Almost all theAsset tokenization projects’technologyis based on Ethereum Platform. ü If all the access(use or occupation of the asset) controls are executed throughsmart contracts, transaction feeissues are remained. ü For the near real-time transactions off-chaintechnologiesare needed. ü The functionof access controlhas to be integrated to the IoT(Internet ofThings) Technology.
  35. 35. “The technology is still new and many legal questions remain unanswered. But tokenization stands to bring massive opportunities for growth and diversification to the asset market. We will see major breakthroughs in this area soon!” <Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson>

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