Tokenization helps in bridging the gap between real-world business cases and global investors. The tokenization of assets represents a real-world tradable asset, a value, stake, or anything in the business ecosystem. Once derived and formulated, these tokens could be traded, and the ‘ownership’ and the ‘value’ associated with each token would be transferred accordingly. This kind of ownership with customer-centric features like high liquidity, blockchain immutability, real-time executable smart contracts, higher accessibility, and the easily manageable platform has created an interest in today’s economy.

Why it is required: Digital assets are mainly emitted by tokenizing an underlying asset with money-like properties (medium of exchange, storage of value, and unit of account). These are then deployed to a blockchain network for security and verification purposes. Once the process is complete, these assets could be swapped on a primary or secondary market exchange with the necessary infrastructure to realize these assets’ trading, settlement, and custody.

Industry 4.0 Breakthrough: The tokenization of assets represents the next significant milestone for blockchain technology.

Types of Tokens: There are many ways to classify the tokens; they can be single-use or multi-use, reversible or irreversible, authenticable or non-authenticable, cryptographic or non-cryptographic, and numerous other combinations are available. Although at a systemic level, Tokens are often divided into the following basis:-