The Tokenization Of RWA – A Natural Progression

The Next Chapter

I have often spoken about the tokenization of real-world assets going forward, and how I envision this idea to eventually become a central and integral part of the new economy that is busy being built. Some may think that it is perhaps somewhat of a “stretch”. On the contrary, it’s actually more of a natural progression than anything else.

When, as mankind, you are literally standing on the doorstep of CBDCs, it’s somewhat of a logical conclusion that digitization is in fact the next chapter of man’s development and progression within societal structures. There have been numerous predictions made in relation to the future of tokenization. One of the more well-known predictions is that the tokenization of real-world assets will reach $10 trillion by 2030. This is actually not that difficult to envision.

Remember, this is not the creation of value, but rather the reallocation of value, in terms of “storage” and “custody”. It’s an upgrade when it comes to proof of ownership and comes with a few additional benefits. For instance, look at how many entities are now introducing and embracing the tokenization of real estate. That’s an enormous market right there and has already begun to experience an acceleration in terms of tokenization.

At The Heart Of Tokenization

Tokenization, in terms of real-world assets, comes down to the portability of ownership, and the ability to transfer that value without friction, and void of time-consuming practices and procedures. Essentially, it simplifies and consolidates the process of ownership, and the transference of ownership. Provided, there is a legal and structural undergirding in place, it’s a far superior way of transacting.

Certain blockchains are not only well-suited for this chapter of ownership but are already geared up and ready to begin the “Great Transfer”. NFTs could have been a great introduction to this way of thinking. However, in many ways, the initial NFT movement was a rather inaccurate point of reference. I addressed this back in 2020 and 2021. However, only now are people beginning to realize they were played.

In other words, authority, or value needs to exist in order to validate an NFT holding any meaningful value. Simply minting an NFT with a random jpeg does not produce value. However, depending on who is minting the NFT, and what they are minting is where the true value lies. This is the “undergirding” that I previously mentioned, and needs to be in place to authorize, assign, and confirm value.

More Than NFTs

The tokenization of real estate, commodities, and other collectibles is now beginning to validate this idea, where previously, NFTs did more harm than good. The introduction of elements of ownership that require legalities is proving that there is a lot more to the idea of tokenization than was previously understood. I am not saying that there is no place or market for NFTs. On the contrary, there is, provided they meet specific criteria.

In the same breath, tokenization is a lot more than NFTs, especially in terms of how they are currently perceived. One of the greatest barriers to Crypto adoption, as a whole, is perception. When talking to no-coiners, I am able to easily identify where the problem lies… and it usually comes down to perception. They see, but don’t understand, and as a result, have a skewed and inaccurate view or perception.

As time passes, a slow adjustment begins to take place. This is why the adoption of new ideas is never overnight. Mankind is inherently stubborn, and a creature of habit. It takes time to realize and embrace a superior way, and unfortunately is always an unavoidable part of the journey that can often become somewhat frustrating for those who have realized. However, after a prolonged period of resistance, realization tends to accelerate and become more prevalent.

Final Thoughts

There is tremendous scope for tokenization, and real-world assets are merely one expression of where this idea is able to simplify and enhance transactional interaction and ownership. Personally, I am rather excited about this particular aspect of Crypto and see it becoming a very definite trend in the upcoming bull market. In actual fact, tokenization is likely to unfold and experience significant adoption over the next decade. In my opinion, it’s an expression of Crypto that definitely deserves some research and investigation. All the best, catch you next time!

Leave a Reply

%d bloggers like this: