Tokenization in Action: Commodities, IP, and Art

Transcript

so next up running right away to the next keynote we will have a keynote about tokenization in action Comm Commodities IP and art and I'm very happy to welcome and honor to welcome last schling from lexify on stage the floor is yours thank you very much so hello every body um today I wanted to present you a real case of tokenization we are speaking a lot of blockchain crypto web3 but how can we use this technology what how can we use this technology to change the business model that we have or our clients have

so um what I want to show you is this token in action and the example that I wanted to show you is real world asset tokenization that means we take some assets that exist that could be tangible but even untangle assets and we tokenize them to create more Market more liquidity to be able to unfreeze the power and the liquidity of assets that maybe are not so liquid so the definition of a real world asset tokenization is you can read it representing physical assets on a digital token on a blockchain that can be a commodity that can be a artwork that can be the um even shares of of of

of companies and even tangible assets uh we are right now working also on a project to tokenize intellectual properties so you can tokenize a little bit of everything and the purpose of doing this tokenization is really to allowing the to increase the liquidity of the asset think about of real estate for example selling a real estates you need a lot of money to sell it but maybe we can fractionalize the real estate and sell tokens that represent the ownership of a part of this real estate to a lower price and having more liquidity to the market and having people and investor that can purchase this token for a fraction of the price so there are

advantage and there are also disadvantage that I will show it later of doing uh of token tokenizing real world assets what are the Avengers first Global access um if I tokenize an assets and I sell the token representing these assets so representing the ownership of the assets I can sell the token everywhere in the world I can sell it to a client in Argentina to a client in Japan to someone in Australia to someone in Canada because they don't have to I don't have to move the the the the real asset the real asset remain in custody by the issuer of the token which take the liability of holding this Assets in

this custody what I sell is just a token representing this asset that is in my custody uh as said I can improve liquidity because I can really have all the market interested in this asset I can fractionalize the assets take a luxury car and sell just a part of it um cost reduction because the transaction I have I can transfer the the ownership of a real world asset just for the cost of a blockchain trans action so very cheap and finally democratization I can open very expensive asset the ownership of very expensive asset to everyone thanks to fractionalization there are also some

disadvantage we must be aware of it um could be some security concern so we are still speaking about something digital so we know that we have to make be a little bit careful for cyber threats um there are some limited market acceptance nowadays the best will be to purchase a real world asset token with another token which make the experience very fast very smooth but no not everyone has crypto asset in this wallet so we still need to use some Fiat money that increase a little bit the complexity of the transaction um payment limitation if you use Fiat money transfer to Fiat it's from from Japan from Canada from

Australia yes it's possible but from cler country maybe a little bit more difficult and then the inter interoperability between the users so um if I want to use if I want to tokenize a real world asset and I use a blockchain but I have the token on another blockchain and this blockchain doesn't speak which is doer um there could be some some some extra complexity to the to to to the situation however this is something that can be done and what I can share you from our perspective is that there are a lot of project with asset tokenization right now and um there are some rules that you have to to to to follow so it's not something is not the Far West okay

that's is a a regulated activity so there are three condition that you have to fulfill if you want to make a real world asset token I take it here on on the screen so first of all the token that you have must really represent the asset so you cannot sell a token to take the money and with the money put purchase the the asset afterward you have to already have the asset uh available and you you when you sell the token you really sell the ownership of the assets then when you transfer the token that you must have the legal documentation that confirm that by transferring the token you are also transferring the ownership of uh the asset and finally the the custody the deposit of the asset must be um must be

done on a non-fungible way so if I have for example a a specific car this is the specific car that I am selling I cannot do real world asset token for example for um fungible um um um object if there is without some exception that I will right see which is gold of course and commodities and when I transfer the real world asset token um that's very good in Switzerland we have the laws that all of us really to transfer the ownership of the assets without the need to transfer the asset itself so I can have as I say the the asset stay in custody between by the original owner of the assets which

want them to tokenize it because they want to create more liquidity for this assets maybe keep a part of the Assets in in in ownership but selling the rest so the assets remain within the owner of the of the asset which will act as a custodian and it will be liable of course as a custodian for the oer token holder and in case it will then sell the asset the money will then flow to the to the um token owner the sale price will then flow to the Token owner in in in in percentage if this is a fractional um token then I said we can have co-owners of these assets so every token represent a percentage of the assets or a specific part of the assets that's also something that we do for Arts if you have a

paintings you can choose which part of the painting you want to tokenize and maybe you are tokenizing a part particular part of the paintings that is much valuable than uh the right corner which is just blue sky and is a blue token and you can give to him a less um less a minor value if compared to uh the particular part of of the painting um and you can see also is since 2018 uh the federal Council recognized the fact that by transfering a token we can really transfer the um ownership of the asset so I wanted very quickly to show you some example of tokenized asset that we are doing the easiest one is commodity

so you can tokenize commodity you can sell tokens which represent commodity this is something that you have already on the market there are a lot of gold token on the market out there but you really can tokenize everything they related to to Commodities and not only um gold and I said one of the one of the regulatory requirements is you need to have the the goal with you so normally what you do is that you recognize that the owner of the token can give you back the token and you have to give him the gold um as a Redemption then a very interesting to example is that you can use token also to tokenize a process in this case uh we tokenize

recycled water but in reality we tokenize a process which were able to uh count how many liters or how many Cubit meters of recycled water a company an industry could produce and that's then we create a token and this token is a sort of carbon credit for water and what you need is you need this because for ESG requirements some companies need to offset their use of water and then they can pese this token representing the Recycled water done by um other other other industry and the very interesting part is why we have to tokenize this

because we can also put it on the marketplace and give a real value to these tokens so we have a market value of recycled water because we can put this water on a exchange and then we see what what value the market go give to this to this token and that is a value of all the for all the process and finally as I was saying we tokenize also I we can also tokenize IP rights uh the difference between IP rights and the case that I showed you before is hyper rights are securities I'm tokenizing a right so and this right include a financial right the rights to receive some royalties so here we are speaking of Securities and therefore we have some

a little bit more of low and requirements that are requested by by by the regulator but it's something you can do so so you can tokenize shares it's also a you have also a financial right there the dividend you can tokenize bonds you have also a financial right there the interest but you can tokenize also IP rights and even tokenize IP rights for for an artist or for something that you don't really know what in the future this this rights will bring so it's a good means for artist to get some revenues before they really became famous that's it that was my short present ation to show you um how blockchain can be used in different

fields in order to uh increase liquidity to create new markets and uh yeah to make business thank you very much for your attention