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Tokenized Assets

Complete Overview of Asset Tokenization

Tokenized Assets - ScienceSoft

ScienceSoft applies 33-year experience in IT and proven expertise in blockchain development to help companies in 30+industries tokenize their assets.

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Tokenized Assets - ScienceSoft

Tokenized Assets: the Essence

Tokenized assets are blockchain-based tokens that represent the ownership over particular tangible and intangible assets.

  • Capabilities of tokenized assets: Allowing for secure and transparent transfer of asset ownership, fractionalized ownership of assets to increase their liquidity and reduce investment barriers, fast and cost-effective asset trading with no intermediary services.
  • Steps to tokenize assets: Selecting an asset to tokenize, creating a tokenomics model, choosing a blockchain platform for asset tokenization, developing smart contracts, crypto wallet integration, token launch for trading on primary and secondary markets.
  • Cost of asset tokenization: $30,000 – $100,000+.
  • Average timeframes for asset tokenization: 3-6 months.

Key Capabilities Tokenized Assets Provide

Asset-backed tokens and underlying smart contracts provide unique capabilities to meet specific asset management needs, improve asset liquidity, and streamline asset management.

Fractional asset ownership

A digital token can be created for a user-defined portion of an asset. This introduces the capability for shared ownership of an asset and partial asset trading.

Peer-to-peer asset trading

The ownership of tokenized assets can be transferred directly between asset owners and investors without the involvement of third-party intermediaries, such as governmental entities or financial institutions.

End-to-end asset traceability

Asset owners and investors can trace the whole history of activities performed over tokenized assets in a distributed ledger. It helps verify asset origin and provenance and prevent fraud and counterfeiting.

Compliance

Tokenized assets can be programmed to comply with required global, country- and industry-specific standards and regulations, such as AML/CFT and KYC regulations, ISO 27001/27002, SEC, GLBA, PCI DSS, GDPR (for the EU), HIPAA (for healthcare), and more.

Smart contract-based automation

Self-executing protocols (smart contracts) automatically enforce fixed actions related to tokenized assets upon particular events pre-defined by token issuers. For example, asset ownership is transferred to the investor upon payment for the asset, compliance of tokenized asset transactions is checked against required standards and regulations.

Automated recordkeeping

All transactions on tokenized assets, including those initiated by smart contracts, are automatically validated, timestamped, cryptographically encrypted, and recorded in the immutable distributed ledger available to asset owners and investors.

How ScienceSoft Tokenizes Assets

Based on ScienceSoft’s experience in asset tokenization projects, we’ve summarized key steps ScienceSoft’s team covers to introduce tokenized assets.

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An illustrated example of Ethereum-based asset tokenization by ScienceSoft

Ethereum-based asset tokenization - ScienceSoft

Success Factors for Asset Tokenization

ScienceSoft keeps to the following practices to increase the chances of asset tokenization success:

  • Thorough analysis of the available blockchain platforms for asset tokenization to choose the one that provides optimal transaction prices and ensure economic feasibility of asset tokenization.
  • Cross-chain interoperability of tokenized assets to ensure their smooth performance across different blockchain systems, trading platforms, and crypto wallets.
  • Maximized automation across issuing, managing and trading tokenized assets to eliminate manual processing of asset transactions, increase their accuracy and safety.
  • Seamless integration of the tokenized asset management solution with relevant corporate software (e.g., ERP, an accounting system) to eliminate double data entry on asset transactions.
  • Focus on security to ensure protection of tokenized assets and sensitive financial and business data stored in the blockchain.

Get Expert Help on Asset Tokenization

ScienceSoft’s team is ready to tokenize your assets to enhance their liquidity and tradability, enable fast, secure, cost-effective and fully traceable transfer of asset ownership.

Asset Tokenization Cost Factors

The cost and duration of asset tokenization vary greatly depending on:

  • The type of assets to tokenize.
  • The required type of a token (a utility token, a security token, NFT, etc.).
  • The chosen blockchain platform for asset tokenization.
  • The number and complexity of smart contracts.
  • Cross-chain interoperability requirements for digital tokens.
  • The number and complexity of applications (web, mobile, desktop) for token issuers and investors to manage their assets.

According to ScienceSoft’s experience, an asset tokenization project of average complexity lasts 3-6 months and requires $30,000 – 100,000 in investments.

Financial gains you get with tokenized assets

Increase in revenue

due to enhanced liquidity of a company’s assets, which drives their growth in value and reduces barriers to investment.

Reduction in costs

of transfer of asset ownership rights and settlement due to peer-to-peer asset trading and no need for third-party services.

Minimized risk

of financial losses associated with fraud and penalties for non-compliance due to token development, issuance and trading in accordance with relevant standards and regulations.

Eliminated human involvement

with token-related transactions processing due to smart contract-based automation, which provides an opportunity to optimize employee workload and cut labor costs.

Blockchain Platforms for Asset Tokenization ScienceSoft Works With

Ethereum

Description

Open-source protocol

The most popular blockchain to tokenize assets. Ethereum offers a range of established standards and frameworks to easily design and launch various types of tokens. However, Ethereum’s popularity results in low transaction processing speed and drives high transaction costs, which makes the platform economically unfeasible for smaller businesses.

Best for

Large enterprises looking to tokenize a range of different fungible assets.

Stellar

Description

Open-source protocol

Enables fast transaction processing and instant platform scalability while charging significantly lower cost per transaction, comparing to Ethereum. Stellar employs the provably safe and fault-tolerant Federated Byzantine Agreement (FBA) consensus protocol and offers the proprietary compliance protocol to ensure tokenized asset transactions meet AML/KYC requirements.

Best for

Midsize and large companies that need to tokenize highly regulated assets.

Tezos

Description

Open-source protocol

Relies on the Proof-of-Stake consensus protocol, which provides low transaction fees. Michelson, a Tezos’s domain-specific language for writing smart contracts, is designed to facilitate formal verification of smart contracts to assure their high-level security.

Best for

Midsize businesses that need cost-saving tokenization of fungible or non-fungible assets.

ScienceSoft’s Asset Tokenization Services

Having proven expertise in building blockchain-based solutions, ScienceSoft provides consulting and development services for your asset tokenization project.

Asset tokenization consulting

  • Analyzing your business needs and eliciting requirements for tokenized assets.
  • Suggesting an optimal token type, architecture design and tech stack for a tokenized asset solution.
  • Providing a detailed feature set for the tokenized assets.
  • Introducing an integration plan with required software (e.g., a crypto wallet, accounting software, payment gateways).
  • Tokenized asset security consulting.
  • Documenting a tokenomics model for the asset-backed tokens.
  • Delivering a roadmap for the tokenized asset implementation, including a risk mitigation plan.
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Tokenized asset development

  • Analyzing your asset tokenization needs.
  • Architecture design for the tokenized asset solution.
  • Tokenized asset development.
  • Integrating the tokenized asset solution with required software (e.g., a crypto wallet, accounting software, payment gateways).
  • Testing and quality assurance.

Optionally:

  • Drawing up user training materials or conducting user training on the management of asset-backed tokens.
  • Support and evolution of the tokenized assets.
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About ScienceSoft

ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. Having proven expertise in the development of blockchain-based solutions, we provide consultancy and development services to help businesses tokenize various types of assets. In our asset tokenization projects, we employ robust quality management and data security management systems supported by ISO 9001 and ISO 27001 certificates.