Early 2021, iconic auction house Christie’s held an auction for a piece of digital artwork titled The First 5000 Days by artist Beeple. It was not the first time that the artist would be selling his artwork digitally, having made millions from doing so in the past. However, the art being sold by Christie’s would be a  21,069 × 21,069-pixel JPEG file along with an interesting addition; a non-fungible token.

These non-fungible tokens have taken the blockchain world by storm thanks to their ability to authenticate ownership of everything from collectible toys to arts and are expected to see greater use as blockchain becomes more popular.

Tokenization Around the World

These days, it seems tokenization is the biggest thing all over the world. So far, everything from real estate to art to even wine has been tokenized and monetized and it’s easy to see why so many investors and firms are hopping on what is poised to be one of the next big money-making phenomena.

Token financing is the process of substituting an actual value with a pre-determined synthetic one that represents the initial value. An example of this is physical chips given in Las Vegas that represent large amounts of money. in the world of blockchain, the whole or partial value of an asset can be represented by a digital token, and investors can buy into the asset by buying the token.

Tokenization has the potential to open up and revolutionize the capital market and it is being explored all over the world, including in the Netherlands as more and more ways to tokenize are discovered. There are many reasons for its success thus far.

First, token financing has a very low barrier to entry, especially when compared to traditional means of raising funds such as Initial Public Offerings which require registration with governmental bodies and well as a huge amount of capital. Token financing, on the other hand, costs much less money both to launch and to invest in.

Token financing is also much more inclusive of smaller investors. This is because a single token can be split into many smaller amounts and transferred to new owners. Thus, individuals may invest with very little funds in assets they would ordinarily not be able to afford. In terms of adding security tokens to exchanges and other platforms for purchase, this can be done relatively easily and quickly compared to traditional means of fundraising.

Because the assets in question are based on blockchain, compliance measures can be imputed into the assets’ code to ensure that no laws being broken. The use of smart contracts also means that various corporate processes can be automated. These include the payment of dividends and the reporting of income. All these mean that the use of token financing is more inclusive and financially feasible but also more likely to comply with existing laws without relying on human effort.

How Dusk Network is Changing the Token Financing Space

One of the firms in the Netherlands that has jumped head-first in the token financing space is Dusk Network, a privacy blockchain that is geared specifically towards financial apps. Its platform has also proven to be efficient at helping businesses to tokenize various assets for their customer base. This has also seen it be used by various companies that want to explore the world of token financing such as NPEX Stock Exchange and Investor Ready.

In the case of the latter, Investor Ready News, a business accelerator, tapped the Dusk Network to be used to fight the economic effects of the COVID-19 outbreak by allowing businesses to tokenize their assets with ease. Many of these businesses were small and medium enterprises which constitute a large chunk of employers in the Netherlands and were hit hard by the pandemic.

“We are creating modern funding options and, with it, we will open up investment opportunities to a whole new category of investors,” said Jelle Pol, Dusk Network's Business Director. “We want customers, superfans and the general investment public to be able to invest in the potential unicorn companies of the future.”

Now, Investor Ready news’ over 800 angel investors will have access to Security Standard Contract (XSC)-backed security tokens. The tokens are the first of their kind to natively integrate regulatory requirements. They also take into consideration the needs of investors and companies and are designed to be as easy to use as possible.

And the company continues to expand, with a planned Release Candidate launch slated for April 9, 2021. This launch will be the world’s first privacy blockchain for RegDeFi applications and is part of a larger expansion plan.

There is no denying the part that tokenization will play in the future of finance and investing. Some suggest that it will be the main way that investors put their money into the market. For a country like the Netherlands, it is very important that such opportunities be as accessible and efficient as possible. Firms like Dusk Network are working ahead of this and laying the foundation for the world’s tokenized future.