Against all odds, despite a market downturn, the FTX scandal, regulatory freezes, and more, there’s a renewed sense of optimism in the blockchain sector due, in large part, to the rise of tokenized traditional financial assets.
It helps significantly that major web2 organizations are getting in on the action. From financial institutions and corporate borrowers jumping into the world of bond tokenization to asset managers following suit by tokenizing their funds, all seem to share the goal of extending distribution to the masses, reducing the barriers to entry for new investors, and drumming up new sources of investment dollars.
A new age of investing is upon us, largely thanks to traditional businesses waking up to the power of asset tokenization. This technology is by no means new. Even in 2019, BNY Mellon was pitting the opening of illiquid assets to “dramatically change the dynamic” for investors — but finally, it seems, tokenization’s time has come.
The Market Potential & Benefits
Analysts from Citibank estimate that as much as $5 trillion in tokenized securities could be issued by 2030. And this figure looks pretty conservative. Broadridge, a US-based fintech infrastructure company, already boasts over $1 trillion in tokenized repurchase agreements on its Distributed Ledger Repo (DLR) platform. And in August, the total value of tokenized real-world assets reached a record $3.1 billion.
Lufthansa UpTrip (Photo by Sean Gallup/Getty Images)GETTY IMAGES
The app empowers their passengers to turn their boarding passes into NFTs, unlocking exciting experiences and rewards — gamifying the travel process and creating a new layer of engagement. Flight upgrades, exclusive lounge access, reward miles, and frequent flyer badges give a glimpse into what can be achieved with this Web3 app.
Utilizing tokenization, any business can implement similar loyalty rewards campaigns with a minimum of effort and no previous knowledge of Web3. Tara Fung, cofounder and CEO of Co:Create, a company who’s APIs enable all brands to build gamified, self-owned reward experiences, added, “Tokenization represents the future of customer acquisition and retention for consumer-facing businesses. However, they need the tools that allow them to focus on the story they are trying to tell and the experience they want to provide to their customers, without having to build out all of the underlying infrastructure from scratch.”
Normalizing Tokenization Through Carbon Credits
Where we were five years ago, where we are now, and where we will be in five years are simply worlds apart. Society is still not ready to buy and sell vehicles, homes, and other major assets on the blockchain, but they will be one day, and it will feel very normal. For now, it’s crucial to find the low-hanging fruit and use the blockchain to provide solutions, such is the case with carbon credits, for example.
A great example of this tokenization is Nori. Nori is a platform that creates a massive marketplace for carbon removal, starting with regenerative agriculture projects that store carbon in the soil, we can repair our climate and fund a better future. In the realm of sustainable investing, Nori's Marketplace pioneers a transformative approach to carbon removal. When you purchase carbon removal through Nori, you're not just offsetting emissions; you're actively supporting regenerative farmers committed to sequestering carbon dioxide for at least ten years, with re-verification every three years.
The innovative Nori Carbon Removal Certificate accompanying each purchase provides transparency, showcasing the exact amount of carbon removal funded and the specific location and timing of the environmental impact. This tokenized process not only empowers individuals to make a tangible difference but also aligns with the increasing demand for transparency in sustainable investments, turning environmental commitments into actionable and shareable contributions.