You perhaps have heard about the behavioral artistics news related to Banksy’s self-destruction art “Girl With Balloon” in Sotheby’s London auction. After the paint was hammered for 1 million pound sterlings, it was shredded automatically by a remote control mechanism inserted by the artist Banksy himself. The price was as three times as that painting was expected to achieve and also a new record for Banksy. Later, Banksy posted the painting’s self-destruction video on his Instagram account quoted Picasso: “The urge to destroy is also a creative urge”. From this piece of news, we are able to take a glimpse into the wild and creative minds of artists.
Tokenizing an asset in real world
Asset tokenization is built up under the principle of blockchain technology. It implies the process of changing the right of an asset to a kind of digital tokens.
Tangible assets can certainly be tokenized but what makes asset tokenization interesting is that even intangible assets or revenue generated from the tangible assets could be fractionalized, meaning that you hold a fraction of an asset.
The excitement revolving around Initial Coin Offering (ICO) is that the access to fundraising is now democratized, anyone with internet access has the opportunity to finance startups and projects. While ICO is an innovative way to get support from retail investors, this type of fundraising activity very rarely satisfies regulatory concerns. Regulators and lead professionals are nervous as the majority of these retail investors do not fully understand where they are investing their money in to.
We are confident that blockchain and cryptocurrency are here to stay. That being said, the glory days of ICO has passed, and the cryptocurrency market is going through a sanitation period whereby many utility tokens will phase out. However, we remain bullish on asset-backed tokens, and security tokens, tokens with real fundamental value have high potentials to be the next big wave of internet finance.
Crypto custody companies are growing to meet the needs of institutional investors, including hedge funds, who are patiently waiting to pounce on the digital currency. However, custody solution will vary depending on whether you are a retail grade consumer, a high net worth individual, an asset manager, a corporation or a recently minted project with a cryptocurrency in your treasury. While self-care is the preferred method for individuals, institutional money needs institutional level care, but the question remains, what is the best solution for crypto custodian service?
Initial coin offerings (ICOs) have raised over $20 bln this year, and are completely changing the way startups gain access to capital, especially for those in the early stage. In the ICO process, startups issue their own digital tokens and exchange them with by contributors worldwide for other cryptocurrencies like Ethereum or Bitcoin. Tokens are accordingly classified by their use cases and functions, the most common of which dichotomizes them into utility or security tokens.
Is it possible to participate in high-return-yet-illiquid assets?
Are you still investing in bonds or stocks regarding Hang Seng Index has dropped from more than 33,000 to about 27,000 in 10 months? How about buying pieces of a Picasso? Fine Art has been emerging as a new asset class for the well-diversified portfolio as it is uncorrelated to the general markets. A piece of art can generate a consistent ROI over a 5 to 10 years period.
The Future of Asset Tokenization
In the evening of the super typhoon Mangkhut’s departure, Plutux successfully held our first community event. Close to 100 friends and guests attended The Future of Asset Tokenization on Monday. We hope our panelists offered some valuable insights to our audience (Ryan Rodenbaugh from TrustToken, Cyrus Wen from Plutux, and Roland Yau from Cocoon Ignite Ventures).
Plutux is excited to announce our upcoming pre-registration along with our comprehensive community program, which offers one of most unique reward mechanism in the industry as we know today.
The Gibraltar Financial Services Commission (GFSC) has taken a substantial first step in providing regulatory clarity and support for the blockchain and cryptocurrency industries. Beginning January 1st, 2018, the GFSC has required that businesses using distributed ledger technologies (DLT) obtain a license to be authorized as a provider of such services.