Good Morning guys hope everyone is having a great week!
Today I am going to introduce to you guys but also to myself the world of Tokenized Assets.
From art to buildings, the way we invest in assets could be about to fundamentally change with the arrival of Tokenization. The act of tokenizing assets threatens to disrupt many industries, in particular the financial industry, and those who are not prepared risk being left behind.
What is Tokenization?
The tokenization of assets refers to the process of issuing a blockchain token (specifically, a security token) that digitally represents a real tradable asset. These security tokens are created through a type of initial coin offering (ICO) sometimes referred to as a security token offering (STO) to distinguish it from other types of ICOs. An STO can be used to create a digital representation—a security token—of an asset, meaning that a security token could represent a share in a company, ownership of a piece of real estate, or participation in an investment fund. These security tokens can then be traded on a secondary market.
Benefits
A new “token economy” offers the potential for a more efficient and fair financial world by greatly reducing the friction involved in the creation, buying, and selling of securities. We see four key advantages that tokenization provides for both investors and sellers:
- Greater Liquidity
- Faster & Cheaper Transactions
- More Transparency
- More Accesible
Importantly, tokenization could open up investment in assets to a much wider audience thanks to reduced minimum investment amounts and periods. Tokens are highly divisible, meaning investors can purchase tokens that represent incredibly small percentages of the underlying assets. If each order is cheaper and easier to process, it will open the way for a significant reduction of minimum investment amounts.
Challenges
Some obstacles need to be overcome, however, if tokenization and the broader token economy are to take off. A big problem revolves around regulatory alignment, especially considering the fact that blockchain-based platforms are de facto decentralised. Consequently, many of the advantages of tokenization are undermined if regulations prevent the free and international exchange of security tokens. What is needed are compliant methods of creating and exchanging tokens in a domestic and, ideally, international scope.
Opportunities
Chances are that you might have heard of Harvest.Finance and its sweet Interest Rate % Returns (APY). Recently Harvest developers have integrated the Mirror Protocol (MIR) into their crypto-farming platform. Why is this so important one would ask, why would we care?
Well because the harvest APY for Mirrror-tokenised Assets are the ones you see above for todays date. When I saw these level of returns my interest shifted to tokenised assets and how to benefit from this Crypto-niche. First we will have to understand how does the Mirror protocol operate and the risk associated with its tokenised assets.
Mirror Protocol
MIR is the governance token of Mirror Protocol, a synthetic assets protocol built by Terraform Labs (TFL) on the Terra blockchain. Mirror enables two markets with well-balanced incentives: a market for minters to safely issue overcollateralized synthetic assets, and a market for traders to gain exposure to them. Mirror has the potential to democratise finance by making assets of all shapes and forms accessible to anyone, anywhere in the world.
MIR price opened at 14.5$ on BINANCE and is currently trading at 9.57$ , a little over 1.5$ form its bottom Price line.
MIR protocol is also available for staking on Binance, which brings overall value to the Chain.
Let's understand a Mirrored Asset and how to obtain it, in order to be able to farm and earn those returns.
Mirrored Assets are blockchain tokens that behave like "mirror" versions of real-world assets by reflecting the exchange prices on-chain. They give traders the price exposure to real assets while enabling fractional ownership, open access and censorship resistance as any other cryptocurrency. Unlike traditional tokens which serve to represent a real, underlying asset, mAssets are purely synthetic and only capture the price movement of the corresponding asset.
Let us Consider mAAPL :
Mirrored Apple (mAAPL) is a synthetic asset tracking the price of an Apple stock. It can be minted on the Mirror Protocol, which references on-chain prices provided by Band Protocol's decentralized network of oracles. mAAPL exists as CW20 and ERC20 versions, which can be traded on Terraswap and Uniswap, respectively.
Now you have the information needed to understand in depth the Mirror protocol and the potential growth this project is facing in forthcoming years. I am going to take the time and find out how to set-up a Harvest.Finance and link it to our METAMASK wallet for the MIR protocol, in order to have the tokenised assets on our wallets and start farming those sweet APYs. As always please do not YOLO everything , be mindful and do your own DD.
I will be bringing updates with respect to this niche and
In the meantime I hope you all have a great day!
If you don't have a Harvest.Finance linked Metamask wallet, I have explained it here step-by-step :
https://www.publish0x.com/biskuit/maximising-personal-percent-returns-harvestfinance-metamask-xpngerl
