Funds

Tokenization

Investment fund tokenization is the practice of dividing financial assets into digital units, or tokens, on a blockchain.

In few steps

Digitization of funds

The process starts with the digitization of the investment fund. This means that the value of the fund is represented in digital form on a blockchain. To do this, the fund is valued and a defined number of tokens are created to represent the total value of the fund.

The division into tokens

Once the asset is digitized, it is divided into tokens. Each token represents a fraction of the total value of the fund. For example, if a $10 million investment fund is tokenized, it could be represented by 10 million tokens, each token representing one dollar of the fund’s value.

Marketing the tokens

Tokens are then sold to investors on token exchange platforms. These platforms allow investors to buy and sell investment fund tokens in a manner similar to stocks or other financial instruments.

Legal management

Token holders have rights in proportion to the number of tokens they hold. These rights may include a share of the fund’s returns, voting rights on certain decisions about the fund, and so on.

Exemples

Index fund

An index fund, which tracks a certain market index, could be tokenized to allow easier and broader access to various markets for investors.

Bond Fund

A bond fund could be tokenized, allowing more investors to gain exposure to bonds without having to purchase each bond individually.

Venture Capital Fund

A venture capital fund could be tokenized, allowing more investors to access investments in startups and other early stage companies.

Infrastructure fund

A fund that invests in physical infrastructure, such as roads or bridges, could be tokenized, allowing more investors to benefit from the returns generated by these investments.

Commodity fund

A commodity fund could be tokenized, allowing investors to gain exposure to commodities without having to buy and store the commodities themselves.

Main advantages

Increased Liquidity

Tokenization facilitates quick transactions and opens the market to more investors, thereby increasing liquidity.

Fractionalization

Tokenization makes funds investing more accessible by allowing the purchase of small fractions of an asset.

Transparency and Security

Thanks to the blockchain, tokenization offers greater transparency of transactions and enhanced security.