A Full Dive Into Tokenization #004

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Hello great minds,

With a heart filled with joy I humbly come before you all today to continue our discussion on the Important topics we have at hand.

I trust everyone is enjoying his activities in the community because I am enjoying mine.

Today being another day, we shall be diving deeper into tokenization and I will love to carry you all along, please stay tuned.

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APPLICATION OF TOKENIZATION

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• SECURITY TOKEN:

Tokenization in the context of security tokens is known to be a transformative process that deals with the convertion of real-world assets such as ownership rights, debt, equity into digital tokens that are managed and issued on a distributed ledger technology or on a blockchain technology.

This Innovation advances the world of finance in several ways, thus offering greater security and accessibility.

As we continue this discussion, we shall examine more application of tokenization in security tokens.

ASSET DIGITIZATION

The conversion of tangible traditional assets into digital token is only possible due to tokenization.

These assets can range from bonds, real estate properties, company's stocks and even fine art.

The ownership and transfer of this token becomes more transparent and efficient through the representation of these assets as tokens on the blockchain.

FRACTIONAL OWNERSHIP

The ability of security tokens to be divided into smaller tradeable units remains one of it's most valuable benefits.

For example, the tokenization of a high value real estate property is possible, thus allowing for some fractional part of it to be purchased by multiple investors.

This thus makes investing more accessible to various individuals, in other words, we can say that it democratizes investing.

LIQUIDITY

Traditional assets such as private equity or real estate often appear to lack liquidity and this implies that they cannot be easily transferred or sold

Security token helps in providing liquidity to this tokens by giving room for them to be traded on secondary markets.

And here, investors can easily sell or buy these tokens and in the process provide more liquidity to it.

REGULATORY COMPLIANCE

Security tokens are designed in a way that they are compliant with existing financial regulation, ensuring that the law protects investor and issuer.

This compliance with regulatory regulation makes tokenized security more attractive to investors and traditional institutions.

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CONCLUSION

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We have learnt Important aspect of tokenization, we have seen how it can be applied and the Importance of it's application.

In our next meeting, we shall learn more about tokenization, please stay tuned.