KSM Starter IDO Deepdive: AssetFi
Kicking off 2022 in style, KSM Starter is absolutely thrilled to shine a warm and welcome spotlight on the year’s first IDO, AssetFi, an industry leader in ownership and tokenization.
AssetFi is a groundbreaking solution aimed at solving financial exclusion by providing a platform for converting physical assets, NFTs and companies to tokens for micro-ownership by small investors. In effect, this opens up a world of opportunities that have previously been exclusive to exceedingly deep pockets.
They don’t intend to reinvent the wheel when it comes to ownership, but only to provide an environment where ownership can be made maximally accessible. Their platform is underpinned by three tenants; that ownership be more efficient, accessible and transparent.
The current issue is as follows: there are trillions of dollars locked in assets which cannot be exploited, as they are famously illiquid. This includes markets such as real estate, art, IP, scarce and valuable resources, which are predominantly owned by institutional investors, leaving little room for the retail investors to benefit from these markets.
Through tokenization, AssetFi will open new markets to anyone in the world, allowing readily available capital to flow into illiquid markets, opening a world full of opportunities.
The benefits of tokenization are liquidity, programmability, and fractionalization. Let’s break down each of them. Increased liquidity means that investors will be able to offer their now liquid valuables to a global pool of investors across multiple secondary exchanges. Second, programmability allows assets to include self-executing utility functions, definitions, and specifications across asset classes, which allow for high caliber automatic actions and strategies. Lastly, fractional ownership lowers barriers of entrance for retail investors and allows anyone from anywhere in the world to own stakes in tokenized assets.
In terms of infrastructure, AssetFi is designed and developed to support the financial industry’s needs by providing a decentralized, secure, and transparent registry and exchange across multiple financial assets and markets. By utilizing their ecosystem, a diverse community of asset originators, fund managers, servicers, bankers, and investors can execute a wide array of financial functions while enjoying an unprecedented level of liquidity, programmability, and fractionalization through tokenization.
Tokenized assets can be broken down into three main categories: Real estate, equities, and commodities.
Real Estate tokenization allows fractional ownership, which opens the doors for high capital and increased market participation. This provides an opportunity to expand real estate investment markets to a global community — from a select group of mega wealthy developers, to humble individuals with only a couple dollars to invest.
In terms of commodities, illiquid assets, including artwork, wine, ownership interests in private companies, partnership shares and more, can be tokenized to offer provenance, lending and price discovery through the blockchain’s transparency.
Lastly, tokenization of equity shares allows companies to interact with shareholders by providing information on a single shared and immutable ledger. This means that for the first time ever, shareholders will have ownership transparency and authenticity to run trades on the secondary market.
This will be an incredibly powerful contribution to DeFi, because tokenized assets present a clear path towards making numerous assets more valuable, accessible, and useful relative to their legacy counterparts, as well as creating a vehicle by which off-chain data can augment their utilization within the DeFi ecosystem.
Broken down simply:
→ Liquidity → Accessibility → Fractional ownership → Composability → Transparency → Convenience
KSM Starter’s third article on AssetFi, concluding the three part series before IDO launch, will continue to explore the specific technology that makes AssetFi such a game changer.
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About KSM Starter
KSM Starter, the primary launchpad on Kusama, is built to provide early-stage support and public funding for projects building on Substrate. KSM Starter’s incubator modeled launchpad is driven by the community and shared values of fairness, transparency, and decentralized organization. Unique to the KST ecosystem, community members are incentivized to participate in the pre IDO selection process through higher allocation rewards. Also unique to KSM Starter, collaboration is fostered among launched projects by incentivizing community members to support previous launches by awarding them with improved lottery odds. This along with the KST Ecosystem Council generates a synergistic network effect that empowers all projects to succeed and leave a lasting impact on Kusama.