This post will go through how and why you should tokenize actual assets, as well as the Coingosh method for doing so.
Contents:
(1) Why Tokenize Real Assets?
(2) The Coingosh Platform
(3) Tokenization of Real-World Assets
Until recently, many actual assets, like real estate, mining operations, renewable energy projects, beverage distilleries, sports royalties, infrastructure, and valuable works of art, have been tokenized.
1. Why Real Asset Tokenization?
At the time of writing, the financial industry is experiencing a considerable increase in tokenization initiatives, as well as tokenization solutions and service providers. Coingosh is a primary issuance platform that allows for continuing corporate administration of the actual asset as well as trading through the built-in OTC market.
Other businesses provide secondary security token trading markets, custody solutions, legal services, and other services. Many parts of the security token puzzle are beginning to fall into place, resulting in a more efficient, transparent, and secure blockchain-based infrastructure for securities transfer, settlement, and trading.
Real estate, which accounts for more than $200 trillion in total assets, is the largest single asset class where tokenization may add value. Real assets are part of the broader securities market’s value proposition. One of the most significant advantages of real asset tokenization, in our opinion, is the opportunity to lower ticket sizes by many orders of magnitude (from USD 100,000 to USD 1,000). This is made feasible by the high level of automation in the issuance and post-issuance procedures, which will greatly expand the pool of investors who may invest in a specific fund. Another key benefit is the increased liquidity of actual assets as a result of their being traded.
Real assets have several characteristics that make them ideal for STOs, such as being generally safe investments that need large quantities of money, being relatively easy to compare and quantify, and being notoriously illiquid investments. As a result, real assets will benefit from “standard” blockchain value properties such as (1) the ability to automate and reduce the cost of issuance, transfer, settlement, and trading processes; (2) the ability to automate and reduce the cost of governance processes such as cross-border transfers, cross-investor-type trading, lock-up periods, investor count caps, and so on; and (3) the ability to automate and reduce the cost of governance processes such as cross-border transfers, cross-investor-type trading, lock- (3) the increased ability to attract foreign investors and larger numbers of (smaller) investors, thereby expanding the pool of potential investors for any given project, (4) the ability to reduce or eliminate various types of intermediaries, such as CSDs, transfer agencies, broker-dealers, and so on, due to the blockchain trust layer, thereby increasing efficiency and lowering costs even further, (5) the increased ability to attract investors due to the previously mentioned benefits (additional liquidity), and (6) the ability to significantly reduce investor ticket sizes by an order of magnitude to cater for retail investors due to the automation of the process.
As a result, good projects will be able to raise capital more easily, quickly, and at a lower cost, investors will have more liquidity on their investments, good projects will receive a liquidity premium, and investors around the world will have access to previously unobtainable types of investments. The other reason is that, as compared to the proprietary digitization of securities, blockchain technology is a considerably more contemporary, safe, and efficient way of executing securities transfer, settlement, and trading.
2. The Coingosh Platform
Coingosh is a white-label platform for digitizing securities (shares, bonds, etc. ), issuing them to generate funding for a project, managing a group of tokenized investors over time, and trading them on an OTC market. The Coingosh platform is “white-label,” which means that it is only sold to partners that provide it under their own brand. The Coingosh platform may be used for fundraising, but it can also be used for tokenizing existing real estate funds to increase liquidity among existing investors and make onboarding new investors easier.
The Coingosh platform has a lot of features, but the most important is that it supports three main processes: (1) the issuance of tokenized securities to raise funds for a project, (2) the longer-term management of a group of investors who are holding tokens to document their ownership of securities within the project, and (3) token trading via the built-in OTC marketplace.
We enable a bespoke onboarding procedure for the issuing process, where KYC and AML solutions may be tailored to the issuer’s and investors’ individual jurisdictions. The investor gets his own dashboard, where he can see his token holdings, connect with the issuer, vote on important matters like how to rebuild a property, and buy more tokens, among other things. The issuer has a dashboard where he may check the KYC paperwork submitted by investors and approve them to participate in the STO. Once an investor has been accepted, he can purchase tokens using a variety of payment methods. Because the solution includes an e-signature module, the contract procedure may be automated and digitized to the greatest extent feasible. The KYC verification process can be conducted in-house or outsourced to a third-party service provider.
3. Tokenization of Real-World Assets
So, how exactly does one tokenize a property? To generate money for a new development project or to sell an existing home?
When a customer employs Coingosh in this process, we also enlist the assistance of our legal partner to assist with legal issues related to the issuance. As a result, two processes, legal and technological, begin and operate concurrently. (If the client’s internal legal department or legal partner is sufficiently informed in STO rules, it is also feasible to cooperate with them.)
The creation of a project plan/roadmap for both legal and technical work is one of the first steps in every project.
1) Deciding on the project’s jurisdiction.
2) After deciding on the jurisdiction, the legal entity (SPV = Special Purpose Vehicle) should be formed and a bank account established.
3) Planning the fund-raise itself, taking into account the amount to be raised and the sort of investors to be sought.
4) Create the security that will be tokenized.
5) Creating an onboarding KYC (Know Your Customer) procedure for investors.
6) Examining and deciding the kind of reports and updates that must be sent to public transfer agencies, CSDs, and other entities.
7) Different forms of legal documents are required depending on the type of raise.
The technical procedure is as follows:
1) Tailoring the KYC process based on the legal process’s input.
2) Choosing which contracts to utilize for investor signup and subsequent token purchase by customizing the contract procedure.
3) Customizing the material and information accessible to display the property in an appealing manner, such as images, financials, and so on.
4) Payment choices may be customized, including credit card, bank transfer, and cryptocurrency payments.
5) Customizing custody alternatives – either through integrated custody partners or simply by establishing arrangements to custody investor tokens that are paid and handled by the issuer or the investors themselves.
6) Installing and configuring server software, as well as instructing issuer administrators on how to use it.
7) Verifying that everything is in order for the STO to go live.
8) Start the STO by pressing the “start” button.
9) A typical STO lasts around two to three months.
In addition to the processes mentioned above, Coingosh can also assist with marketing and investor relations workflows. Coingosh has relationships with marketing firms and investor relations service providers all across the world that have expertise in dealing with real estate fund-raising.
For more information, please contact DigiShares at admin@coingosh.com