There have been many Trends in Crypto over the past Decade, some of which have stuck, and others of which have faded away. While I certainly believe BTC/ETH are true stores of value now, and will always have value and will continuously grow as time passes, I do believe we are upon a new Trend in Cryptocurrency. The trend is "Tokenization" and I believe it is here to stay.
If we look at the way legislation around the world surrounding Blockchain, it is no mystery if BTC and other Blockchains will be around in the future. Blockchain is here to stay and the world is currently acclimating to that notion.
There is a reason that the United States is currently setting up Crypto Legislation in an attempt to regulate it. They understand that most businesses that will make it to the next generation will heavily rely on the functional components of Blockchain Technology.
Some areas which I believe will be heavily reliant of Blockchain include, Finance, The Stock Exchange, Real-Estate, Energy etc. Every Major sector can benefit in some way through Blockchains speed, affordability, and security. It's not *IF* these sectors will be tokenized/reliant on Blockchain, but *When* they will be tokenized.
With that said, I would like to Bring your attention to two Projects that I believe are ahead of the game when it comes to Tokenization. Those projects are Smartlands and Polymath.
What is Smartlands?
With more and more investors coming in, I think it is important to clearly explain the function of Smartlands and where it is starting. Feel free to share this article when trying to describe how Smartlands work and is trying to achieve.
The first thing to consider is the difference between the Smartlands Platform and the SLT Token, as those are two different things. Let's start with the Platform and come back to the Token.
Smartlands describes itself as a Digital Platform to Raise Capital and Trade Tokenized Assets.
So, what does that mean exactly? We will break it down one by one:
• Tokenizing an Asset:
A Token is simply the “crypto” word representing a “share”, or a portion of something.
For example, 1 x TSLA is equivalent to a share of the company Tesla Inc.The same way 1 x BTC is a portion of the supply of total Bitcoins that exist.
An Asset simply means a resource or valuable thing such as a commercial building, a company, a Picasso, a container full of wheat grains, etc.
Tokenizing an Asset would then mean the ability to split an Asset into tiny shares.
Let’s say you own an apartment building worth 1 Million $, on paper it would say that you own just this: 1 apartment building worth 1 Million $.
If you Tokenize this building, this building would be split into lots of mini portions and you would now own 1000 mini shares of that building, or Token in our case, each worth 1/1000 of the Building so 1000$ each.
Obviously, the building will not be physically cut apart into 1000 small pieces, it’s just that after registering the Building on Smartlands, it would say you own all 1000 portions of 1000$ each instead of owning 1 building of 1 Million $.
Now, why would you do that you might think? Well, raising capital ↓
• Raise Capital:
Let’s take this 1 Million $ apartment example again. You might suddenly see an opportunity to invest in a company, you decide to get married and go on a honeymoon, you see a very cheap house for sale on the market, Bitcoin is in a bear market and you want to buy some, etc.
If all you had was that 1 Building, you could not take part in those opportunities unless you sell the full building. In regards to real estate, yes, you could mortgage the building and borrow money from the bank, but then you would be in debt, owing to the bank money and have to pay it back with interest.
I am sure you’re seeing it coming, but the other solution would be to list your building on Smartlands, have it split into mini tokens, and only sell the amount you need. This is what the sentence: get liquidity out of an illiquid asset actually means.
Before listing your building, a licensed broker-dealer will appraise the value of your building to give it an evaluation of 1 Million $. It is all regulated and done through joint Ventures and Partnerships, it's not a Smartlands employee who does this.
Let’s say you need 100 000 $ right away, then you could sell 100 shares of your building and keep the other 900 shares worth 900 000 $.
Of course, to sell 100 shares, you need buyers.
Once you list those 100 shares on Smartlands, investors will have a chance to acquire them. If you are familiar with the concept of the website Kickstarter, it will be fairly similar. The Owner will have to launch a “funding campaign” where his 100 shares will be up for grabs at 1000$ each. Once/if they are all bought, then the funding is successful: the investors then pay and receive their shares, while the Owner receives his 100 000$.
This also means the Owner does not have to find one big buyer, he now has a pool of thousands (or millions eventually) of potential buyers. Is it easier to sell one big pie or 10 pieces of a pie?
As an investor looking to buy shares from assets, when going on the Smartlands Platform you will get to choose to participate in the initial Asset funding rounds or purchase asset shares that older investors are re-selling.
Many different Assets will be listed there. Let’s say someone owns the Empire State Building and tokenizes it, you could then purchase some ESB tokens. Let’s say a Florist lists his business, you could then buy FLRT tokens.
So, what’s so nice about buying small portions of big assets you might think? Let’s explore it below ↓
• Trade Assets:
There are 2 reasons why you would want to buy the token of an asset:
- Re-sell it after it has appreciated in value
- Gain passive income if that asset is generating revenue
You would own a portion of an asset for the same reason you would own shares in the stock market. Your goal is for it to go up in value over time and then re-sell it. As we all know, the Real Estate market keeps climbing up. A building worth 1 Million $ 10 years ago might now be worth 2 Million $. It’s very high returns, but you need money to make money, 1 Million $ ain’t cheap.
What happens if you do not have enough money to buy a large asset like this then? Thankfully Smartlands is here to let you buy small portions.
Reselling it is not all though, assets listed on Smartlands will likely be revenue-generating assets and by owning a share of it you are entitled to receive those as well.
In the case of an apartment building, it collects rent every year and although there are some management fees to it (taxes, Janitor, Plumber, etc.), profits left will be distributed pro-rata to the shareholders.
This is huge since it now means doors are opened for small investors to own something else than bonds and stocks, they can be in the same real estate game as the rich folks, which has a higher yield.
Keep in mind that in some cases, you might only be lending your money to the owner in exchange for a portion of the collected rent and interest rate.
An Asset is not limited to Real estate and we will look at some examples below, but first, let’s explore what the SLT Token has to do in all this.
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SLT Token:
The first thing to consider is that the SLT Token has absolutely nothing to do with all the Asset Tokens. When someone goes on Smartlands to buy some Empire State Building Tokens (ESB), they don’t see any SLT on there or anything related to crypto. The crowd that will invest in those Asset tokens is not the crypto crowd, it’s just regular individuals (from poor to very rich) that want to invest their money somewhere. When they buy Asset Tokens, they buy them with Fiat (€, $, etc.). The who owns what is all determined by Blockchain in the background, but they don’t see it, it stays simple for them.
Now, Buying and Holding SLT is simply a way to receive revenues from fees that the Smartlands platform collects since using the Smartlands platform is not free. There are fees when you list an asset and when you resell your asset shares.
The Owners that list their Real Estate assets on Smartlands will have to pay 5% of the tokenized value and 5000 € . Smartlands is mostly aiming at big commercial buildings worth over 10M, so 5% fee ends up already cheaper than the regular broker/legal fees.
So for listing a 10 Million € Building tokenized at 10% you would pay 50 000 € +5000 € . Also, whenever an investor re-sells his share he has to pay 1% in Fiat as well. All this Fiat $ is then used to buy SLT on the crypto market. 1/3 of all the SLT collected is then redistributed pro-rata to the SLT holders, the rest is sent to the Smartland company to finance the business activities.
The more Assets are getting Listed and the more Assets are being Traded, the more $$$ you receive for each SLT that you hold.
So, when buying SLT, you are betting that Smartlands will be used by owners to list their assets and by investors to buy and trade the asset shares, and thus generate fees. Because the more fees Smartlands generate, the more passive income you receive. You are not owing any shares in listed buildings or other assets.
When buying the token ESB, you are betting that the Empire State Building will be worth more in a couple of years and that they are able to rent their office spaces to generate revenue.
If you want more details in regards to the actual Tokenomics behind all this (fee detail & revenue potential), please have a look at this other article:
https://www.reddit.com/r/SmartlandsPlatform/comments/lty4tm/smartlands_potential_genius_tokenomics/
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The 4 Pillars of Smartlands:
Since an “Asset” can be pretty large/vague, let’s look at the different market verticals that we know Smartlands is tackling. Those initial projects will serve as use cases to then expand to other countries and avenues.
1) Real Estate:
The first big project that Smartlands will launch with its platform this month will be with 3 big Real Estate buildings in Ukraine. We are waiting for the exact details, but estimate a couple of millions in tokenized shares. It is only the start though, Smartlands is partnered with Colliers International, a global estate service and investment management company.
Ukraine was chosen since it’s one of the most crypto-friendly countries out there and Stellar is working with the Ukraine Government to establish a national digital currency (SLT is based on the Stellar network). They went with the path of least resistance as we know legality is the toughest hurdle to overcome, but Ukraine is just the starting line.
We even recently learned that the legal framework for this Ukraine project is finalized and ready for launch, which is excellent news as it clears the only thing that could halt this project.
Details here: https://smartlands.io/blog/the-fee-pool-and-ukraine-explained/
2) SMEs:
Smartlands has recently announced a collaboration with the Ukraine startup incubator BigU, which is supported by the Ministry of Economic Development, Trade and Agriculture of Ukraine.
This will offer a way for startup companies to raise capital via the Smartlands platform. For the first time, smaller companies can now easily sell shares of themselves without having to go public on the stock market. They have access to a bigger pool of private investors and don’t have to sell large equity of their business to predatory Venture Capital companies.
It opens the door for Smartlands to list any SME (Small and Medium-sized Enterprises), and not only Real Estate (if you had not realized it, this is huge).
Details here: https://smartlands.io/blog/business-incubator-group-ukraine-big-u-and-smartlands/
3) Bulk products:
Smartlands has entered a Joint Venture with the Agriculture trading platform Agroxy, which lets farmers buy agricultural products from other sellers. Small farmers have trouble competing against mega-farms that are able to buy their product in bulk (for example, complete silos of seeds and compost at a time).
Merged with Smartlands, farmers will be able to band together and each buy small shares of bulk product and pay a much lower amount for it. Each trade will generate a fee for Smartlands. This shows that Smartlands can also be used purely as a trading platform, and not only for investments.
We recently learned (last Friday) that Smartlands decided to introduce Agroxy to a large chain of companies and scale the agricultural ecosystem. They are negotiating several big partnerships for quite a long time and are hoping to release good news very soon.
Details here: https://smartlands.io/blog/farming-in-a-blockchain-enabled-world/
4) Art (Similar to NFT craze):
Smartlands recently participated in the latest NFT roundtable event in Kyiv. This confirms Smartlands can be used to literally tokenize everything, including something like a physical piece of Art. Imagine being able to buy a share of a Picasso, held in trust in a museum or vault. It would not generate income but would certainly appreciate in value over time. You can also say you own a Picasso, along with being a Real Estate Mogul owning properties all across the planet..
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Future Catalysts:
With that said, I hope this helped clear out things about what Smartlands is all about, and how far it can go. By opening Blockchain technology to real use cases, which has monetary benefits for asset owners and investors, it can truly be disruptive.
I will leave you with future events we are awaiting, which could attract more investors in the short term:
- Details on the Real Estate properties (Available)
- Exact Date of the Platform launch of Smartlands (Launched)
- Details about the new Agroxy partnerships
- AMA of the CEO on r/Stellarbets and r/Altstreetbets
- Tier 1 Exchange (Before the end of 2021)
- Marketing campaign (Soon to start)
- Smartlands has worked closely with the Ukrainian Government and Large Law Firms for the past 3 years to ensure compliance with standing and new Legislation
- First Real Estate projects Set to close in the Next Couple of Months ($M's in tokenized Real estate)
Oh one last thing, it has a Marketcap of 30 Million.
When it comes to Polymath it needs no introduction.
This project has been around for a good amount of time and has received much attention. If you have been paying attention to the CryptoNews you know about their recent setback, I still believe the Idea that Polymath has is a solid one, and Polymath still has a very good future.
In an effort to keep this post short, please check out the numerous posts on Polymath to further understand the Project.
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