Learn about various investment opportunities created by tokenization.
In November this year, Hybe, the South Korean agency behind the world-famous boy band BTS, announced its plans to enter the Non-Fungible Token (NFT) business. The agency plans to buy a 2.5% stake in blockchain-based startup Dunamu, and release BTS NFTs in a joint venture with the startup’s crypto exchange, Upbit. These NFTs will feature moving images and voices of the artists.
Under this venture, BTS fans will also be able to exchange virtual photo cards with each other. BTS is not the only one jumping in on the tokenization trend. Many other celebrities like Shawn Mendes, Snoop Dogg and Azealia Banks have all hopped on the trend to make the most of the rising popularity of NFTs.
With more and more artists and industrial sectors dipping toes in the blockchain waters, it begs the question: can everything be tokenized? Let’s take a look at some sectors that could benefit from tokenization.
Real estate is one of the biggest sectors that can benefit from blockchain and asset tokenization. Tokenization allows a property to be divided into tradable digital assets on a blockchain network. This mitigates the entry barrier into property investment, as one no longer has to buy an entire building to invest in a property.
The blockchain technology removes middlemen from the process of purchasing real estate, which not only cuts costs but also speeds up the investment and transaction process. Another benefit of tokenization is that it would allow all properties to be listed on a centralized exchange, making it simpler for one to find suitable properties to invest in.
Tokenization facilitates the trade of property-like stocks and increases the accessibility of the real estate market. It also allows investors to buy tokens from a wide range of property assets and diversify their investments.
The Hong Kong-based property investment company, Stan Group Holdings Limited’s Buy-a-Brick program is a great example of effective real estate tokenization. Under this program, the company’s employees can buy a “brick” (a digital token) to invest in properties owned by the company. Once the property is sold, those who possess bricks of said property are entitled to a share of the profit.
Another sector that has been thriving from tokenization is the sports industry. Tokenization adds to the fan experience by allowing fans to cash in on the growth of their favorite sports franchises.
Sports tokens also allow young athletes to benefit from their likeness. For instance, in 2019, American basketball player Spencer Dinwiddie announced that he would be tokenizing part of his contract with the sports team, Brooklyn Nets. Through the tokenization, investors would be able to purchase shares of his contract and would earn an annual return of 2.5%. While this plan eventually fell through, Dinwiddie was still able to make US$1.35 million from the sale of his tokenized contract. This is a clear example of the possibilities that tokenization has to offer in the realm of sports.
The gaming industry is also actively adopting tokenization. Much like the sports industry, tokens add to the fan experience in the gaming world as well. For instance, in May this year, Satoshi’s games unveiled the Elixir Marketplace, on which players can trade in-game NFT items in Bitcoin. Satoshi’s Games believes that since these in-game items actually carry values, which means players can make money by playing games, they would “feel in control of their gaming world”.
Esports teams are also an aspect of the gaming industry that could benefit from tokenization. Tokenization would allow for fractional ownership in teams, making it possible for not just prospective investors but also fans to purchase tokens from their favorite teams. These tokens can provide fans with special privileges, like opportunities to meet their favorite players, priority status when it comes to purchasing tickets for events and access to exclusive merchandise.
While this list only includes a few investment opportunities, the possibilities offered by tokenization are truly endless. As technology develops, a world where everything can be tokenized might be closer than we can even imagine.
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