If there is a promising future, it is the tokenization of real assets on the blockchain. Startup Defactor Labs has announced the tokenization of $100 million in bonds on the Polygon (MATIC) blockchain. This will make investing in bonds more transparent, quick, accessible and less expensive.
Traditional bonds issued on Polygon (MATIC)
Despite a heavy context for the cryptocurrency industry, threatened by the multiple attacks of the American financial policeman, some good news continues to rain from time to time and prove that nothing seems to be able to stop innovation.
In a recent announcement, Irish company Defactor Labs announced the launch of a project to tokenize 100 million dollars of bonds on the Polygon blockchain (MATIC). For simplicity, a bond is a traditional financial security representing a piece of debt issued by a company and used to borrow capital.
This ambitious project is enabled by a new type of standard, the ERC-3643. It makes it possible to embed all the legal and regulatory rules necessary for the financial product to be in compliance. It is also the renowned law firm CMS which supervised the operation.
To note that this entire initiative has been monitored and validated by Black Manta Capital Partners, who provided his stockbroker license. In particular, Alpha Bonds can be traded directly on their marketplace.
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Tokenization, a sector of the future?
If blockchain technology is to bring about a revolution in our world, tokenization would certainly be the standard bearer. In a nutshell, this concept involves splitting a real-world asset into one or more chunks and converting them into a digital representation inscribed on the blockchain.
The tokenization of real-world assets opens up a vast field of possibility, from the world of art to that of real estate, via traditional finance. Precisely, Defactor Labs intends revolutionize the way of trading financial securities by using the advantages brought by the blockchain.
But what’s the point? First, to improve the fluidity and transparency of traditional bond investments. While usually this requires long validations by a large number of intermediaries, the blockchain will allow this to be done in an automated way via a smart contractwhich will also speed up the process.
Furthermore, by eliminating these traditional intermediaries, tokenization reduces the costs associated with investing in financial securities. Finally, the splitting of assets into a multitude of tokens will allow lift the cost barrier to entry and to include a greater number of investors. As a result, companies will have less difficulty finding investors and thus to raise capital.
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Source: Defactor Labs
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Journalist for Cryptoast, I strive to dissect every detail of the exciting world of cryptocurrencies and make it accessible and understandable to as many people as possible.
Lilian Aliaga
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