Hot trends for tokenization in 2021
Hi,
This is Maciej Zieliński from Nextrope’s Insights. In one of my previous newsletters, I explained to you why tokenization of real estate is such a big thing in 2021. But are there any other tokenization tendencies worth observing? Today we will again take a closer look at tokenization and discuss the most promising trends for this year.
If your company has never thought about tokenization, maybe you will be interested in our free consultation. All you need to do is write to contact@nextrope.com.
So today we’ll discuss:
🔒 How does tokenization work in supply chains?
🌱 How tokenization will bring agriculture to XXI century?
🏎 Tokens secured by alternative assets
The year 2020 turned out to be extremely surprising and basically eluded all predictions. Although for many it was a historically difficult period, for the blockchain industry and tokenization itself it turned out to be a time of dynamic development and rapid growth in popularity. Tokenization has permanently marked itself in the consciousness of the public, becoming the object of interest even for people who have never before been associated with Blockchain.
What will the further development of tokenization look like this year? What trends will have the greatest impact on the world economy?
Tokenization in the supply chain
The numerous disruptions in supply chains in 2020 have increased the need for solutions that secure the origin and transportation of products. Tokenization has the potential to become one of the leading answers to this problem.
Over the past few years, several projects have managed to prove the enormous potential of using tokenization in the supply chain. For example the TradeLanse platform created in cooperation between Maersk and IBM, which tracks containers transported by sea, is currently used by entities representing approximately 85% of the global market.
By assigning non-fungible tokens to products, it becomes possible to trace their entire path in the supply chain - from raw material extraction, through production, to sales to retail customers. This not only makes it possible to secure their origin but also to control transport conditions, especially important in industries such as food. If a spoiled chicken arrives at the supermarket, thanks to tokens it is easy to determine at which stage of the chain the deficiencies occurred and which entity is responsible for them.
Tokenization in agriculture
One such new area is agriculture. What can become a tokenized resource in it?
For example, the SmartLand company tokenizes Spanish cherry orchards - each token secures 1 square meter of the orchard. Thanks to the proceeds from the sale of tokens, the owner of the farm receives funds to purchase necessary plantings, machinery, and more land for cultivation.
Another idea is a peer-to-peer (P2P) marketplace created by CoreLedger, that provides the framework for a digital barter economy. The platform enables farmers to redeem and trade tokenized assets with any other tokenized asset on it. For example they can trade soybeans for cattle, corn or other items, which are used like asset-backed currencies.
Such and similar solutions may turn out to be especially important for developing agricultural countries, where in the future they will contribute to increasing the dynamics of the development of agricultural enterprises.
Tokenization of alternative assets
For example:
Exotic cars
Art
Gems and jewellery
Vintage wine
They not only satisfy people's whims but also turn out to be a safe deposit of funds and can even generate investment returns. For example, according to a Knight Frank report, investments in vintage cars returned over 330% in the 10 years to 2017.
The need for portfolio diversification and the comfort that comes with owning uncorrelated assets are nothing new in the investment world. But it's in times of market stress that their role becomes especially important. Markets such as that of exclusive wine during the coronavirus pandemic have proven to have far less volatility than global stock markets. It is the tokenization of luxury goods that will make them accessible to a wider range of investors.
" If we look at works of art or collector cars we see that they have historically been seen as safe havens for investment, " says Fernando Verboonen, founder and CEO of CurioInvest, a car tokenization company. “Today they are held by very few. By introducing new technology, we are enabling everyone to fully benefit from the features and functions that define this asset class as a whole."
Tokenization not only lowers the barrier to entry, but also dramatically increases the liquidity of such investments. We are trading tokens, only "part" of a collectible item - so we don't have to look for a buyer for the whole thing. Besides, it solves the extremely important problem of accurately determining the value of such assets. For example, after tokenization of the car, the correction of its current market value occurs in real time. This will create several new opportunities and simplifications, especially in the insurance industry.
Hungry for more? Simply check our blog! 🚀