Real World Asset Tokenization: What It Is & How it Works?
What Is a Smart Contract and How They Work in Tokenization
How Avant-Garde Capital utilises technology
Technical reference architecture for tokenized asset:
Real World Asset Tokenization: What It Is & How it Works?
How Real World Asset Tokenization Works:
Role of Smart Contracts:
- Enable the creation of digital tokens that represent real-world assets on the blockchain.
- Automate the execution of transactions and enforce the terms of the agreement.
- Provide a transparent and tamper-proof record of ownership, transfers, and transactions.
- Facilitate fractional ownership and enable the division of assets into smaller tradable units.
How Avant-Garde Capital utilises technology:
Avant-Garde capital’s idea is to create a platform for Real Estate rental business where all properties are tokenized, and those who purchased tokens could receive proceeds from rental activities and property sale. This idea is based on the fractional ownership business model, where a group of investors pools their funds to purchase a high-value asset, and the revenue and expenses associated with such assets are shared among the investors. Fractional ownership allows creating an additional source of passive income without the need to maintain properties and be involved in rental operations.
Revolutionizing Real Estate Investments:
Transforming Access and Ownership:
The democratization of real estate investments represents a groundbreaking shift, enabling individuals to invest in assets that were traditionally illiquid. This innovative approach breaks down barriers to entry and allows for fractional ownership, opening up new possibilities for investors.
Unveiling Market Potential:
The market for real estate tokenization is currently experiencing remarkable growth and is projected to be valued in the trillions of dollars by 2030. This presents a substantial opportunity for players in the blockchain industry to explore and capitalize on.
Financial Industry Focus:
The tokenization of financial assets, particularly real estate, is gaining momentum due to its potential to revolutionize the digital representation and trading of these assets. As a result, it has become an attractive proposition for participants in the financial market.
Efficiency and Transparency at the Core:
Tokenized real-world assets offer a range of benefits, including enhanced efficiency, transparency, liquidity, and decentralized ownership. These advantages streamline asset management processes and improve accessibility for investors.
Regulatory Clarity:
Regulatory frameworks have evolved to accommodate the tokenization of real-world assets over the years, providing a more conducive environment for companies entering this space. This clarity helps foster a more robust and secure ecosystem for tokenized assets.
Technological Advancements:
Advancements in blockchain technology, scalability, security, and interoperability are simplifying the process of tokenizing real-world assets efficiently and securely, paving the way for further innovation and development in the industry.
Innovation Opportunities:
The development of infrastructure for real estate tokenization presents a wealth of opportunities for founders to capitalize on the increasing demand for tokenized assets and to create innovative solutions in this dynamic and evolving market.
Technical reference architecture for tokenized asset:
To Prepare and launch security tokens Ethereum is the blockchain of choice specifically the ERC-3643 protocol that will help the expansion of security tokens thanks to its interoperability. With a standard interface, all relevant parties can exchange and use security tokens.
The ERC-3643 token shares many of the same characteristics with fungible tokens (like the ERC-1400, ERC-20) and non-fungible tokens (like the ERC-721).
ERC3643 is ERC-20 compliant, allowing it to take use of Ethereum’s current ecosystem and infrastructure. Decentralized exchanges or lending platforms, for example, may interact with ERC-3643 tokens as well as other protocols and programs that allow permissioned tokens.
ERC-3643 makes sure that only authorized users are able to store and transfer tokens by comparing their on-chain identities and credentials to preset regulations. This lowers the possibility of breaking the law and improves investment safety.
As historically Ethereum established base foundational layer for security tokens—smart contracts—making tokens programmable and automated.
But, there are more foundational layers required to ensure regulatory compliance and institutional confidence, better enabling security token creation, issuance, management, and liquidity. That’s the main reason to look into usage of a purpose-built blockchain for security tokens like Polymesh. Polymath Capital Platform has all required tools for tokenization: from Token Studio to Broker-dealer toolset, including ability to integrate corporate governance requirements, identity&confidentiality tools and ensuring compliance on all stages of security token lifecycle.
Polymath easily integrates into larger bespoke ecosystem with regulated custody; regulated exchange, KYC/AML regulated providers, tax and Legal.
It streamlines outdated processes and opens the door to new financial instruments by solving the challenges inherent in public infrastructure around governance, identity, compliance, confidentiality, and settlement.