Over the past five years, the cryptocurrency industry has made an enormous breakthrough. The digital asset industries have evolved so rapidly that they have spearheaded a new wave of digitalization. As a result, people who were skeptical about cryptocurrencies are gradually changing their minds about this. They see enormous potential for the entire global financial system as a whole.
However, besides cryptocurrencies, there is another class of digital assets – tokens (utility, security, and NFT). Unlike cryptocurrencies, tokens are not considered a means of payment, but some types of tokens can be regarded as securities on the blockchain. The popularity of tokens has become so great that many companies have started issuing so-called brand tokens. Let's talk about business tokenization and why your company may need brand tokens.
Definition of brand tokens
Both cryptocurrencies and tokens are subclasses of digital assets based on cryptography. Cryptography is the latest encryption technology that ensures the authenticity of digital assets.
The key difference between a cryptocurrency and a token is that the cryptocurrency is the native asset of the new blockchain. Tokens are issued on an already existing blockchain. The most popular network for issuing such digital assets is Ethereum, which offers simple token creation and smart contracts. Smart contracts guarantee the fulfillment of obligations by both parties to the transaction. The contract is executed after both parties fulfill the conditions only.
Due to the advanced technologies used in the blockchain, asset tokenization has become popular. The business tokenization process implies that some underlying asset is encrypted in the form of a token, and it is possible to buy or sell it. Tokenization is possible for tangible assets, such as real estate, art objects, and securities. It can also be used for intangible assets. For example, for computing power, cloud storage space, selling ownership of domains, etc.
You can tokenize business to promote your brand. It allows you to increase brand value for customers who can become shareholders. In addition, tokens can be used to receive certain benefits within the platform or attract investments. You can also use NFT to create various collectible assets.
Brand tokens are digital assets backed by the reputation of a brand, community, or individual. This niche is actively developing, and experts consider this technology promising.
How to tokenize a company and issue brand tokens.Speak to Stobox Expert
Launching brand tokens will require the involvement of professionals. First, you will need to clarify some legal issues, decide which token type you want to issue, develop a clear tokenization business model, and hire blockchain developers. One of the most popular options for token kinds is security tokens since they are regulated and considered securities in many countries. Still, there are other options like utility tokens and NFTs. It is also essential to have a community to support and promote your brand. If it already exists, it's good; if it doesn't exist, you will have to carry out the appropriate work. The factors entrepreneurs need to launch a brand token include innovation, skilled development, an advisory team, and a digitally ready community.
As part of the project's development, tokenization is carried out - the transfer of assets to the blockchain. Corresponding entries are created in the registry, after which tokens are tied to them.
As part of business tokenization, it is necessary to prescribe the conditions correctly. Smart contracts can only be executed if both parties have fulfilled their obligations. This point is essential to consider carefully. For example, if brand tokens imply the holder's voting right, you must specify the conditions under which this right will be exercised. For instance, you can tokenize the company so that the holder will be able to participate in the voting if he owns the token for three months, shows any activity on the network, has a corresponding confirmation in the blockchain, etc.
After the development is completed, an emission is carried out. If you want to offer security tokens to potential investors, you need to conduct an STO (Security Token Offering). As part of the STO, an initial sale of tokens is carried out for interested investors (similar to an IPO). In the future, tokens can be traded between community members. The token's value is pegged to the asset's value but can also grow with increased interest among potential buyers. In the event of an increase in the token's value, the holder can sell the tokens and receive an instant profit.
Business tokenization allows you to increase the liquidity of assets. Expensive assets can be divided into fractions, making it easier for retail investors to buy them. Buying or selling such a token has also become more straightforward. All these factors contribute to the growth of liquidity. In addition, the tokenization technology is transparent and reliable; the blockchain securely stores all encrypted information. It is impossible to forge a token or remove information from the blockchain. All this contributes to increasing interest in this technology.
The future of brand tokens
Brand tokens can improve your brand awareness. With their help, you can increase profits for your company and increase authenticity for collectors. In addition, business tokenization allows you to issue assets to attract investment – it depends on the type of token you choose.
The use of brand tokens allows you to combine innovative technologies with traditional methods of attracting customers. For example, tokens can be used to accumulate points in a loyalty program or as gift cards. All this contributes to increasing customer loyalty and interest in the brand and its products.
It is important to remember that brand tokens and NFTs are still a new area. At the moment, there is a lack of experts. Innovation is a constant search for an experience that can give a new impetus to your business. Change is the key to developing and promoting a brand in today's economy. Blockchain technology can bring essential changes, and our company is pleased to be one of the first to tokenize businesses worldwide.
Modern people care about constant interaction with the world, including virtually. They are concerned with issues such as the right to make decisions in various fields; they are interested in matters of ecology, sustainability, and authenticity. As a result, rigid systems characteristic of the 20th century ceased to exist.
It's important to remember that if you can't provide opportunities for the "customers of tomorrow," your business will become obsolete and irrelevant. These rules apply in all areas, without exception. The future is in modern, high-tech systems, which include brand tokens. If you want to be one of the first companies that enter the new tokenization era and tokenize company, feel free to contact us. Our experts will tell you more about tokenization options for your business and different types of tokens within the first complimentary consultation.