Tokenized Real World Assets, The New Paradigm In Crypto

By: Jan Strandberg

When I started my crypto journey in 2011, my ideas were centred around digital currencies and digital products. I was a hardcore evangelist of everything digital. I remember thinking you won’t need anything physical in the future, and everything will be virtual. I remember having arguments with many intelligent people about why you should invest in digital products instead of physical products and how stupid and old-school it was to think of owning something physical. I had all the arguments; why gold is a foolish investment (I eventually invested in gold in 2019), why investing in apartments was senseless, and how the physical world will ultimately be the old-school way of making money. 

Despite being correct in many of my arguments, especially about digital currencies, I realized that I still could have better diversified my money. The older you get, the more valuable your savings become. Young me was naive and thought the money markets were small and getting crypto at the same level would be an easy job. Fast forward to today, and I can see that there is so much work to be done before digital currencies and DeFi overtakes traditional currency and baking. 

The old money is still far superior to the new one, but the change is coming. I have had a big realization during the past few years; we need to close the HUGE gap between old-school money and new money and have them join forces. This is where I see the tokenized real-world assets become the game changers. We can already see this happening with some of the most significant projects starting to utilize more and more RWAs.

Projects like PAX Gold, which is a digital token backed by actual, physical gold. If you want to own physical gold but want to own it digitally, Pax gold is where you go. You can buy PaxG in both decentralized and centralized exchanges, and PAXG investors own the physical gold stored by Paxos Trust Company, one of Brink’s secured vaults. And Synthetix, a derivatives liquidity protocol that focuses on creating synthetic assets. They were among the first to explore stocks and real world assets to the blockchain. And since they launched, they have grown their TVL to more than 300 million.  

The second part is education. I have been very fortunate to work with some of the top crypto and traditional finance industry leaders. They have taught me that the financial world is a complex animal and that there are endless topics to learn about. And still, after years of studying, you walk away feeling that you haven’t covered much ground.

What is Asset Tokenization? Crypto and Real-World Assets

Tokenization is the process of converting a real-world asset into a digital token or a digital form. Tokenization has many benefits; greater liquidity, fractional ownership, and 24/7 trading (yes, we need speculation in this world). Tokenization also opens up new investment opportunities and makes it easier to transfer ownership of assets.

One of the critical benefits of tokenization is increased liquidity. It becomes much easier to sell or trade an asset by tokenizing it. For example, if someone owns a tokenized share of a painting, they can readily sell that token to another person without having to go through the hassle of finding a buyer for the entire painting. Tokenized assets can also be traded on digital exchanges 24/7, which is impossible in traditional markets.

Another benefit of tokenization is that it allows for fractional ownership. With tokenization, an asset can be divided into small pieces, each of which can be owned by a different person. This makes it possible to invest in assets that would otherwise be out of reach due to their high price tag. For example, someone who tokenizes a building can sell individual tokens representing one-tenth of a 1% ownership stake in the building. Tokenization makes investment in real estate much more accessible.

 Let’s look at where we are today

I think tokenizing real-world assets is one of the most exciting developments in crypto. By tokenizing assets like gold, real estate, and other commodities, retail investors and plebs like you and me can trade these assets using crypto. This opens up a new world of opportunities for building more sophisticated portfolios, and you can start diversifying your assets digitally. As an investor, this also means that you have access to far superior investment opportunities than your parents. 

Until now, investing in real-world assets has been the domain of institutional investors, banks and hedge funds. However, with tokenization, retail investors and regular people like you and me can now get involved in these markets. This is because tokenized assets can be traded on decentralized exchanges and are accessible to anyone with an internet connection. Imagine people in the third world having access to these assets. 

Tokenization also brings many other benefits. For example, it can help to reduce counterparty risk and make transactions more efficient. It also has the potential to usher in a new era of trustless investing.

So, as more and more assets are tokenized, it is clear that retail investors will play an increasingly important role in the world of cryptocurrency.

How does Acquire come into play? 

Now that you understand the potential of tokenized real-world assets, you also start to see the potential and the gaps. There is a clear need for companies that can bridge the gap between the real world and digital. Acquire.Fi wants to build a bridge where we can put any assets on the chain and tokenize it. Some of the Real World Assets can be

  • Real estate
  • Stock or equity
  • Video game assets
  • Collectibles

And the list goes on. Imagine owning a fraction of different assets and diversifying your portfolio without having to own the asset entirely. That reduces risk majorly because you are taking the risk with a community. Imagine owning a part of a luxury watch that you would not have to afford to own alone? If you look at the luxury market, it’s been going up every year, and this would enable us to participate in that lucrative market. 

The more we can expand RWAs to the blockchain, the more we can build wealth worldwide.

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