According to the results of a recent study conducted by the firm Deloitte (1), 95% of the companies questioned would consider making an investment in blockchain in the course of the coming year.
Confronted with digital transformation and dematerialization, it is no coincidence that so many of them are grasping all the business opportunities linked to this revolutionary technology, which offers an information and value transfer system with specific characteristics. unique.
However, if the blockchain is still often associated with a secure and efficient means of keeping the register of transactions in the context of a consortium or a private network, issues such as the protection of personal data or the updating of scale (scalability), or even its association with “cryptocurrencies” (in particular bitcoin) and their sulphurous image as regularly portrayed by the media, hamper the adoption of business solutions based on the public blockchain.
However, it would be a shame to limit the potential of this technology to this single field of application, as it is already at the heart of major economic transformations.
Among these, “tokenization”, which makes it possible to issue and exchange assets on the blockchain, is a real source of value creation for the company, whatever its sector of activity. Let’s explore some of its many proposals together.
A token, or digital token in French, is an asset issued and exchangeable on the blockchain, via digital market platforms, which represents a unit of value. It can be assigned to anything that makes up the value of a company (digital assets, digital representations of real assets, etc.).
“Materialized” in the form of a small programmable “software” (called “smart contract”), the token makes it possible to execute, at low cost, transparently and automatically different types of transactions between two parties (companies, individuals, institutions, associations, etc.), without requiring the intervention of a third party.
The possibilities of using tokens are, therefore, numerous and varied.
Tokens can be issued to represent all or part of a financial asset. They can represent a commodity, such as gold or oil, as well as real estate or a financial instrument, such as stocks or shares in investment funds. Recently, a luxury condominium located in New York thus became the first asset issued and exchangeable on the Ethereum blockchain.
By reducing barriers to entry for investments, the public ‘tokenization’ of co-ownership has allowed the company to fragment large assets, illiquid in nature, into a multitude of smaller and more liquid assets, while at the same time. limiting the number of intermediaries involved in these processes.
If we can easily imagine the financial savings achieved by the issuing company, we can also imagine the freedom of action and the efficient operating model that “tokenization” offers to the real estate market, broken with high transaction costs. .
In the case cited, the simplicity and flexibility of the “tokenization” process made it possible to reduce illiquidity premiums while opening up to a wider base of potential investors, thus creating a greater source of value.
This operation was carried out on a public blockchain, but, of course, it is possible to “tokenize” on private or consortium blockchains. More confidential, they have a defined governance, require an access authorization, and are often more appreciated by companies. With its Ether Pool solution, the Kaleido company is, for example, able to provide companies with a “token” capable of mapping its assets.
The ability to trade tokens on a dedicated digital platform is also a tremendous opportunity for the markets.
In 2018, as part of its i2i project, UnionBank of Philippines helped connect rural Filipino communities (representing over 50% of the population) and local banks to a reliable and sustainable blockchain payment network. Based on the observation that a large segment of the population of the Philippines, spread over just over 200 islands, could not connect to electronic banking services or to the international money transfer network, UnionBank developed an efficient monetary service. , open, allowing the exchange of tokens at the national level.
With its KrisFlyer loyalty program, also based on an exchange marketplace, Singapore Airlines gives its customers subscribed to the program the possibility of freely exchanging their tokens for flights, or even making purchases at points of sale. sales partners.
In start-ups, but also in companies wishing to accelerate their growth, investment is still very often the prerogative of banks, business angels and other venture capitalists.
In addition to crowdfunding, the arrival of “tokenization” has created a new investment model accessible to all, and especially to players having difficulty accessing traditional financing offers.
Tokenization makes it possible to raise funds in exchange for a promise of access to a product or service, before its implementation. This allows companies to create membership at the time of fundraising, ensuring a more sustainable investment.
For the investor, this system creates new opportunities for action by being granted rights (of value, of use, etc.) on a good or a service. For the entrepreneur, this allows him to significantly increase his capital in a secure manner while taking advantage of a large base of committed potential users (or even beta testers), even before the launch of his product. or service. A boon.
Another advantage, and not the least, if the issuing company so wishes, it can “ask” a token to react, to adapt over time to market reactions. It then suffices for him to register this “character trait” in the smart contract of the token.
From a technological point of view, a token can represent information (the terms of a contract or identity data, for example) or a value, or both. This flexible, variable system makes it possible, for example, to create a standard protocol that will be shared by all the stakeholders of the same business.
Let us take the case of a supply chain in which different actors intervene (suppliers, manufacturers, resellers…), linked by a multiplicity of contracts. Failure to comply with one of these contracts by one of the partners can hamper the proper functioning of the system and sometimes even lead to costly and time-consuming legal procedures.
By including in the smart contract of a token the terms of said contract and by linking it to its value, not only do all the stakeholders gain in efficiency, but they also better control their operating costs and are more risk free. counterpart.
In addition, by “entering” in the “smart contract” of a token the terms of its value – which may be, for example, subject to automatic rewards or, on the contrary, to sanctions – the company is able to to establish a clear and readable contract, capable of regulating itself in real time.
Thanks to the decentralization and disintermediation – reduction or even eradication of the role of intermediaries in favor of direct transactions – inherent in blockchains, tokens have given rise to innovative, transparent, reactive and infallible types of trust contracts.
Companies are gradually considering the opportunities offered by private and consortium blockchains. Examining the subject allows us to see, quite quickly moreover, that they provide users with an incredible multifaceted tool, gifted in adopting a variety of behaviors, capable of improving the efficiency of existing processes, but also of giving birth of new business models.
By including now, in their development strategy, blockchain technology, and in particular “tokenization”, companies therefore clearly have everything to gain.
(1) Survey carried out in 7 countries among 1053 senior executives working in a company with more than $ 500 million in annual turnover.