The fourth type of blockchain projects are Asset Tokenization projects. Asset tokenization is the representation of ownership of tangible assets using digital tokens. Notable examples are USDT, tokenizing the US Dollar, DigixDAO, backed by Gold.

Each DigixDAO token represents 1 gram of LBMA standard gold. Asset Tokenization eases trading and safekeeping.

Firstly, asset tokenization has made trading far more convenient as blockchain assets can be divided into smaller units, increasing its liquidity.

For example, traditional real estate has to be transferred in its entirety. If real estate can be tokenized, it can be divided and sold as units, which makes it easier to trade.

Secondly, asset tokenization aids in safekeeping. Assets such as gold can be damaged during physical trades, losing its value. With tokenization, no physical transfer assets are required, ensuring their safety and condition.

Posted by Huobi Blog