⛓️Tokenization

Introduction

The advent of blockchain technology has revolutionized the way we perceive ownership and trading of assets. Real-world assets (RWAs) on the blockchain are at the forefront of this transformation, bridging the gap between traditional financial markets and the burgeoning realm of decentralized finance (DeFi). Tokenization of real-world assets allows for tangible and intangible assets to be represented as digital tokens on the blockchain, thus facilitating their participation in the digital economy.

What Are Real World Assets (RWAs) in Blockchain?

RWAs in the blockchain context are digital representations of traditional assets, both tangible like real estate, and intangible such as bonds or carbon credits. They can take the form of fungible or non-fungible tokens (NFTs) and are secured by blockchain technology. The tokenization process turns these assets into security tokens, which means they are subject to regulatory compliance just like other securities.

How Does Real World Asset Tokenization Work?

Tokenization is a method by which rights to an asset are converted into a digital token on a blockchain. For instance, a single property can be tokenized and its digital equivalent can be fractionally owned by multiple investors on the blockchain. These security tokens can be managed by custodians off-chain or can exist solely on-chain, depending on the asset and the structure of the tokenization.

The process enables assets that were once difficult to divide or transfer to be easily accessible and traded, much like stocks on an exchange. The on-chain representation of these assets means that their ownership and transfer can be recorded in an immutable ledger, offering unparalleled transparency and efficiency.

Benefits of Tokenizing Real World Assets

1. Efficiency: The blockchain provides a single source of truth for ownership and transaction data. This can drastically reduce the need for manual reconciliation and enable atomic settlements, thereby enhancing the speed and efficiency of asset transfers.

2. Reduced Cost: By automating processes through smart contracts, the need for intermediaries is greatly reduced. This not only minimizes the risk of human error but also leads to a significant reduction in transaction costs.

3. Transparency: With blockchain, all on-chain activity is transparent and can be audited in real-time. This visibility allows participants to assess the quality of asset collateral and exposure to systemic risk more accurately.

4. Liquidity: Tokenization facilitates the fractionalization of assets, improving liquidity for assets that are traditionally considered illiquid. This opens the market to a broader range of investors and can significantly increase the asset's marketability.

How it works at Thovt?

Every asset on the platform is backed by a legally binding contract and agreement. This means that ownership isn't limited to just token possession; it extends to legal rights over the actual asset. By owning the tokens, you are not only a stakeholder in the virtual realm but also a recognized owner in the eyes of the law.

Every property under Thovt's umbrella is overseen by a dedicated property management firm. This firm handles, rent collection, tenant acquisition, and maintenance duties for the rwa token holders.

Thovt facilitates weekly rent payments, leveraging blockchain technology to bypass the traditional 30-day bank transfer waiting period.