How to tokenize your assets
Anyone can tokenize personal assets and list them on an NFT exchange. Just follow the simple steps in the article below, you can immediately own your digital assets.
I/ What is asset tokenization?
Asset tokenization is a process of creating digital characters (called tokens) that represent real-life ownership of assets (or NFTs). The token creation process is based on blockchain technology, allowing you to store and trade tokens freely and securely, just like you would with other cryptocurrencies.
A token can represent ownership of a movie ticket, a digital painting, or even 1/100 of a piece of art. After generating the irreplaceable token of an asset, you can list it on the NFT exchange (if you want to sell ownership of the asset).
II/ The Global Billion Dollar Tokenization Market
The cryptocurrency market is expected to grow from $2.3 billion in 2021 to $5.6 billion in 2026. North America is predicted to hold the largest share of the tokenization market in 2021. Asia Pacific will grow at the highest CAGR (Compound annual growth rate) during the forecast period. Retail and E-commerce will be the industry with great opportunity and is expected to grow at the highest CAGR.
With the extremely strong development speed of this market, if you know how to seize the opportunity early, you will gain worthy achievements. Here are the steps to help you know how to tokenize your assets.
III/ How to tokenize your assets
Below are the steps to tokenize assets such as paintings, photos, drawings, digital artworks, in-game items (CryptoKitties, Decentraland), domains (ENS names)… You can completely tokenize your personal assets with these types!
1/ Select the asset you want to tokenize
Some of the most common things that individuals typically tokenize are:
- The most popular encrypted assets: artwork, music collections, graphic designs, pet photos, antiques…
- Intangible assets such as copyrights, trademarks, copyrights, patents, etc.
My advice to newbies looking to tokenize assets: Choose something that has the potential to fit the economy and technology in a couple of years. Besides, keep an eye out for news about the regulations and laws of your country in the blockchain field.
2/ Determine the revenue model
After you have identified the asset tokenized, choose the model. For example, if you are going to tokenize a picture, list them on an NFT Marketplace like OpenSea, Crypto.com, or Orica.
You can tokenize ownership of your tunes if you’re a musician. As a result, a copyright violation can be quickly identified.
After the audit is finished, a smart contract will be created. The price and quantity of tokens must correspond to the value of the asset.
If assets are widely traded such as gold, silver, etc, the valuation is not too difficult. However, if the asset you tokenize is not on the market yet, you need to consider the actual value of the asset and price it accordingly.
4/ Tokenomics/Smart Contract
Tokenomics is token + economics, which is the economics of tokens. The success of crypto-assets is largely due to tokenomics. If more people invest in and are interested in your NFTs, the value of the tokens will rise. As more people acquire your token, the supply shrinks, raising the token’s value.
5/ Create NFTs Online
Creating NFTs online is not as complicated as you think. You need to fill out an online form, detailing the NFT you want to tokenize. The information included can be name, symbol, supply source, token type… You will have to pay gas fees, and commission fees depending on the different platforms using.
6/ Legal regulations
When you tokenize assets, you should follow these guidelines:
- Laws on trading NFTs in your country
- Pay the necessary taxes when transacting online
- Laws on currency transactions where you live
Knowing the legal and tax regulations will help you create confidence for investors.
7/ Use a monitoring platform
Imagine, what happens when you transact through unmanaged e-wallets and forget the transaction code? The remediation process is both time-consuming and can threaten the integrity of the property you own.
The best solution is that you should manage NFTs and tokens through a custodian platform. When you lose your transaction codes, the manager can easily help you get your account back.
8/ Distribution of tokens
The ITO (Initial Token Offering) is a great time to start issuing NFTs. People who are interested in the new project can purchase NFTs when they are issued.
You can sell it to a select group of investors. If you want to distribute to a wide group of people, you’ll need to set up the smart contract from the start.
You can now tokenize your own digital assets, like paintings and pictures. Tokenizing copyright ownership, real estate, and other assets, on the other hand, will necessitate a more involved procedure. As a result, hiring consultants and professionals in this field is a feasible option for guiding tokenization in the proper way.
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