What is Tokenization?

In simple terms, tokenization is the process of taking an asset and representing it digitally through tokens on a blockchain. These tokens are cryptographic units that serve as a representation of ownership, value, or rights. For example, a company can tokenize its real estate portfolio, with each token representing a fractional share of property ownership. This enables investors to buy, sell, or trade these shares, bringing liquidity to traditionally illiquid markets.

The tokens can represent various asset classes:

- Real estate: Properties or developments can be tokenized to allow fractional ownership.

- Securities: Equity shares, bonds, and other financial instruments can be tokenized.

- Commodities: Physical assets like gold, oil, or agricultural products can be digitized.

- Art and Collectibles: High-value art or rare items can be fractionally owned by multiple parties.

- Intellectual property: Patents, copyrights, or licenses can be tokenized and traded as digital assets.