Bitcoin and other cryptos have fallen for a while, during this period, global ICOs fell to its smallest size since its boom. According to ICORating, the total number of ICO projects has dropped from 275 in June, to 159 in September, and the proportion of projects that have successfully achieved ICO targets has fallen from more than half to about 30% today. According to statistics from Autonomous Research, the total ICO financing in August of this year was 326 million US dollars, the lowest amount recorded since May 2017, about one-tenth of the total monthly 3 billion US dollars in the first quarter of 2018.
Fortunately, there is not only bad news. During this period, several stablecoins were introduced into the market, causing a heated discussion in the industry. The USDT is a digital currency pegged to the US dollar. All USDTs are issued by the Tethers under the Omni Layer protocol on the Bitcoin blockchain. Each token issued by Tethers is linked to one US dollar. Because USDT endorses the credit of Tethers, there are some risks. To provide safety, TrustToken launched TUSD for USDT informational opacity. TUSD can be looked at as an upgraded version of USDT, enhancing supervision by increasing KYC (user background checks), and AML (anti-money laundering), and improving information transparency.
JPMorgan Chase is building a blockchain platform based on Ethereum—Quorum. As gold bars were packaged with electronic ID and the gold bars can be traced from the mine to the client, if the investor believes that the mine is credible, someone will pay a higher price for the gold bars than what is known. Many startups are trying to make the supply chain more transparent and make goods more liquid. The Quorum platform will help tokenize various assets, including precious metals, real estate, and prized works of art. The financial industry does not seem to have stopped the pace of adoption of new technologies.
tZERO is a blockchain startup from Overstock. tZERO is issuing 500 million tokens called “tZERO”, and investors can use tZERO to pay for goods purchased on Overstock. tZERO completed its securities token issuance (STO) on October 12th, becoming one of the first STOs to be issued based on the decentralized network, (Ethereum’s main network).
We can think of these projects as the first in digitization of assets. The goal of these projects is to identify all kinds of real assets in the digital world, then manage and trade them on the Internet. We can digitize currencies such as the euro, the dollar, and even assets such as gold, silver, and platinum. People hope that the digitization of assets will increase the liquidity of assets and greatly improve the operational efficiency of enterprises. From a financial perspective, asset digitization provides a more effective means of financing SMEs (small and medium-sized enterprises).
With blockchain technology, asset digitization has further developed into asset tokenization. Implementation of hash and timestamps ensures the uniqueness of digital assets. All transactions are transparent and traceable. With the introduction of smart contracts, contracts will be highly automated, while tokenized assets can be traded globally and payments can be completed within a few minutes. Asset tokenization also allows asset ownership to be divided between multiple people, and smart contracts can automatically collect and distribute revenue.
The TrustToken mentioned above is a platform for creating digital assets. TrustToken hopes to tokenize real estate, corporate patents, copyrights, collectibles and assets such as gold and oil, in the future. Asset tokenization is often a compliance process. TrustToken holders can use the auditing system provided by TrustProtocol. TrustToken can be used to purchase and attain mortgages, and each of the tokenization assets can issue its own tokens.
The IDA project implemented artificial intelligence and IoT technology into its platform. A significant partner of IDA is MAN (MATRIX AI network). MAN’s technical features include self-learning and evolutionary AI algorithms. These AI solutions will play an important role in the future of digital asset trading and management. IDA is accelerating ecological construction of its digital platform and tokens will be issued as soon as possible. The forest resources currently being logged by Derun (Laos) Investment and Trade Co., Ltd. will be added to the IDA Ecology as the first assets backed by the IDA token. If the program is successful on the market these solutions can be applied to tokenizing assets such as ore, oil and gas.
Look at AlphaPoint, for instance, AlphaPoint provide institutions with enterprise-grade solutions based on blockchain, making illiquid assets liquid. Their investors digitize assets, launch markets, and reduce operational costs, the whole process takes no more than one month. AlphaPoint also offers a complete set of tools for digital asset management. From digital asset portfolios to performance evaluation.
The impacts of asset-backed tokenization will be far-reaching. Real-world assets worth $256 trillion US dollars, will benefit from asset tokenization due to: global transactions, increased liquidity, reduced costs, shared ownership and program control. This is indeed a very big opportunity and will become mainstream in the next few years.
Bitcoin brought blockchain to the world ten years ago, drafting the blueprint for asset digitization. There is a huge uncertainty in token values, which has deterred investors, the whole industry has been in a downturn. Blockchain is still in the early stages of development and requires a lot of investments. New technologies require early adopters. Under these circumstances, tokens backed with assets are more easily accepted by investors, and will play a leading role in the development of blockchain and the empowerment of traditional industries in the coming years.
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