What is asset tokenization?

Asset tokenization is the process by which an issuer creates digital tokens on a distributed ledger or blockchain, which represent either digital or physical assets. Blockchain guarantees that once you buy tokens representing an asset, no single authority can erase or change your ownership — your ownership of that asset remains entirely immutable.

What is the difference between digitalization and asset tokenization?

You may be thinking that the concept of digitalization is nothing new, but the biggest difference between conventional digitalization and asset tokenization is the use of blockchain technology. Blockchain is precisely what delivers the main benefits of tokenization. Let’s take a closer look at some of them.

What is tokenization in blockchain?

The emergence of blockchain technology has birthed the tokenization of assets, enabling the digitization of real-world and digital assets. Read on to learn what tokenization is, how it works, what its most promising use cases are, and discover a list of real-world examples.

Does tokenization increase liquidity?

Tokenization of assets would increase an asset's liquidity, as it facilitates fractional ownership, which eliminates illiquidity discounts. Moreover, selling small fractions of ownership enables owners to charge a fair market price.