Startups play a key role in the innovative development of the economy, but finding funding to realize ambitious ideas is often a complex and expensive process. Nowadays, blockchain technology offers a new way of financing – tokenization. This innovative method is becoming increasingly popular among startups and investors alike. Let’s take a look at what tokenization is and how it is changing the game in the world of startup investing.
What is tokenization?
Tokenization is the process of converting real assets such as stakes in a company, intellectual property, real estate or commodities into digital tokens on a blockchain platform. These tokens can be sold to investors, allowing companies to raise capital to grow a project or business.
Benefits of tokenization for startups
- Accessibility to investors. The tokens can be sold to small investors, allowing startups to attract a wide audience. This expands funding sources and reduces dependence on large investors.
- Liquidity. Tokens can be traded on specialized platforms, providing liquidity of assets. This makes investments more attractive to investors who can buy or sell their tokens at any time.
- Transparency and security. Token transactions are recorded on the blockchain, providing transparency and inaccessibility to tampering. This creates trust between the parties to the transaction.
Benefits for investors
- Access to new markets. Investors can diversify their portfolio by investing in startups with different types of assets.
- Low barriers. Tokens can be accessed by investors with different levels of capital, increasing opportunities for smaller investors.
- Liquidity. The ability to trade tokens on specialized platforms allows investors to exit investments quickly if necessary.
Tokenization is not only a new way of financing, but also an effective tool to expand and diversify an investment portfolio. It promises to transform the investment landscape, providing new opportunities for startups and investors. However, it is important to remember that risks may also arise with such innovations, and lawmakers should create rules to ensure the protection of all parties involved in the process.