Tokenization: Mapping Real-World Assets onto the Blockchain
Tokenization is the process of representing ownership of, or related rights to, real-world assets as digital tokens on a blockchain, with the aim of improving asset circulation, fractional ownership, and transparency of transaction records.
How Tokenization Works
Tokenization creates corresponding digital tokens for assets such as real estate, artworks, commodities, equity, or intellectual property. Tokens represent ownership of or specific rights to the underlying assets, while ownership and transaction histories are recorded on the blockchain, creating a transparent and tamper-resistant ledger.
Fractional Ownership and Liquidity
Assets can be divided into smaller token units, enabling multiple parties to each hold a portion of a high-value asset. Tokens can also circulate on blockchain-based platforms, reducing the operational complexity of asset transfers and potentially improving transaction speed, efficiency, and liquidity.
Automated Execution and Intermediaries
Smart contracts are programmable scripts that run on a blockchain and can execute processes such as dividend distributions or contractual agreements when predefined conditions are met. Combined with blockchain ledgers, tokenization may streamline asset transactions, reduce reliance on certain intermediaries, and lower related costs.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/tokenization
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