Tokenization Showing How Exclusive The Present Financial System Is

in LeoFinance3 months ago

Would you like to make a nice return on some of your money? How would you like to get involved in an opportunity that many have profited from over the years?


Source

What is it you ask? It is being a part of a premium whiskey blend called "Casks of Distinction". It is not being tokenized on the Zilliqa blockchain.

Here is what was said about it:

“The Casks of Distinction represent a collection of rare, high-quality single-malt scotch whisky casks being held and matured at Scottish distilleries, including a Port Ellen 1979, Mortlach 1993, Caol Ila 1990, Benrinnes 1992 and a Talisker 1989 — each of which are estimated to mature between 2022 and 2025.”

Sounds like something we might want to look into. After all, the idea behind tokenizing assets is to make them liquid (no pun intended) while also enabling a larger group of individuals to get involved.

Commenting on the listing, HGX chief operating officer Willie Chang said:

“Our listing of the world’s best whiskies as a security is a great example of this. Powered by Zilliqa’s technology, this project also signals the importance of blockchain in democratising investments.”

Source

Sorry Willie, as good as this all sounds, nothing is really being democratized.

The challenge with this is the fact that it is only open to accredited investors. So unless you fall into that category, you are out of luck.

Certainly, I have no idea if a basket of whiskey is a great investment. For all I know, this could net a 5 bagger in a couple years; or it could be a 90% loss.

It would not be prudent to put one's savings into something like this without knowing what the industry is like. However, if it was truly democratized, perhaps thousands of people would throw a few bucks at it as a flyer. Investors, even small ones, often have "what the heck" money that they are willing to speculate with. Something like this would fit the bill perfectly for many.

Alas, only if you are in the "inner circle" of investing.

Possibilities Of Tokenization

Over the past couple years, we started to get a few examples of the possibilities that tokenization holds. Unfortunately, whether it is art, real estate, or alternative investments such as this, we see the same lined followed: accredited investors.

This is maintaining the exclusiveness that persists within the existing financial system. Often, the best investments are either not open to the public or not available until later, after the "insiders" make a significant profit.

Tokenization is designed for democratization and it is something that we are going to have to fight for. There is little debate the technology/system being presented is better than what is available. It is one of the reasons why the banking and investment industry is adopting some of the technology. It simply surpasses what the banking system can offer.

However, their goal is to hijack as much as they can. The focus is not democratization but, rather, maintaining the exclusivity that presently reigns supreme. The "Casks of Distinction" exemplify that concept.

Nevertheless, the power of tokenization is starting to show through. To start, anything can be tokenized. This will lead to a lot of individual innovation and creativity. Over the next couple years, many will experiment with different ideas, possibilities that we can pick up and duplicate if successful.

Also, when looking at the process, if we provide people with a means to get rewarded, and then offer opportunities in which to grow those rewards, it will operate not only as a source of income but a means of building wealth.

Building From Within

One interesting aspect of tokenization is that it takes the network effect and distributes the value to those involved in it. This is not something we saw before.

We all know how the likes of Facebook and Google became so wealthy. They are were platforms that required the users to provide value. Unfortunately, the financial benefits of said value was distributed only to a select few. The ones mostly responsible for making the platform a success did not share in anything.

This same holds true for the likes of Uber, Airbnb, Twitter, Snapchat, and a host of other applications that served to extract great value.

With tokenization, we are able to do a similar thing, build value, but doing it from within. While venture capitalists are involved in this industry, they are not required. It is a bit slower to start from the bottom, but if something grabs a great deal of users, it can escalate in value very quickly.

Over time, as more value, and the financial benefits thereof, are distributed to the people who are creating it, then we will see the doors of opportunity starting to open up. The entire situation starts to compound when the payoffs are reinvested into other projects. After all, this is exactly what the venture capitalists do.

It is also an inclusive system whereby those participating benefit. The problem with the traditional system, especially with apps just mentioned, is eventually the interest of the users and investors deviate. Since they are different parties with needs that basically oppose each other, there is a point where the platform flips. It is no longer about the users but, rather, payment to the investors.

With tokenization, for the most part, they can be one. Thus the user base can be the ones who have the financial interest. This means that they can balance between their needs as investors compared to being users. Not everything is about maximizing revenues which we see with most of the traditional platforms.

Nevertheless, whatever financial benefit is derived can then be poured back into projects that also grow. This is essentially a form of "user-financing". People are able to participate in the early stages without having to be accredited or meeting any requirements. Perhaps all that is needed is an interest in the project and a few tokens to get involved with.

This is the model being constructed. It is only a question of control and who is allowed to participate.

Here is where we see the tug-o-war that is being waged.


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I prefer to drink my whiskey!

The fact that they use a word like distinction in the title tells me that they are probably going to exclude about 90% of the population from the investment! It is pretty awesome how tokens are making things accessible for people all over the world. I just finished reading the post about what 10 LEO can get you in Venezuela and it is mind blowing.

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I don't think it's a decentralized project, it's something more exclusive to benefit a few investors, I wouldn't risk

Sounds like an elite club for a selected few and that's exactly what they want.

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Very good explanation, it is very good to talk about tokenize if everything will be distributed among a few. It is better that we keep our investments in projects that benefit us to avoid losing our money.

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Yes, the whole accredited investor thing is massive discrimination against the less well off and perpetuates wealth gaps.

Poorer people have only government approved lotteries with a 1 in a million chance of getting rich.

Rich people have early stage startups and tokenised assets that have around a 1 in 20 chance of making them much richer.

Its immoral and unfair.

But Whiskey is a very poor investment.
Whiskey production is massively capital intensive (including need for large amounts of land with only one use - peat bogs) and has a very long timeframe from investment to return.
It is a classic case of misallocation of capital in times of very low interest rates.

There is going to be a massive Whiskey bust.

A whiskey born the same year as me. Now that sounds lovely. And expensive. The idea seems similar to crypto in general, just tied to whiskey. You buy it now, and it "matures" in a few years, and that's when you're glad you did. I don't really know that I have enough free funds to invest it this myself, but the idea is interesting and I thank you for sharing it.

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One interesting aspect of tokenization is that it takes the network effect and distributes the value to those involved in it. This is not something we saw before.

I like this part the most.

I know this has been tried in the past but it has not been a success. The TSU experiment. Is it because they didn't have their own currency?

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Truly, the venture capitalists moving into this space have no idea what they are doing. Everyone seems to think it's a good idea to peg crypto to physical assets. This is an impossible task. Whoever owns the physical asset owns it... and information on the blockchain is pretty meaningless in that context. The ability to counterfeit physical goods is a trivial task even if the digital side is solid.

The only valid use of NFTs is proving ownership over digital assets.
It becomes quite obvious to me that the biggest use-case is online gaming.
I'd be surprised if crypto gaming wasn't a trillion dollar industry within a decade.

Tokenization gives a sense of being part of a community or of something in the making or meaningful for each of us. This way goals align or simply we are seeing the project as a gamification which is more attractive than ever. I just can't imagine how the Leo Finance would have grown or evolve without LEO tokenization...

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I feel that tokenization is far more appealing than using Venture Capitalists and this will create a tug of war effect. I know a firm that used Venture Capitalist's and couldn't wait to pay them off as they definitely earn more than they should. Tokenization would be the better way I believe as everyone benefits including the business which is not always the case with a VC.
look at my example yesterday with Storedot and the batteries for Electric vehicles. Companies Invested $156 million and are sitting very pretty now as they will be the ones to benefit. I would love to have seen them tokenize that type of investment as it is slightly different as the future rewards would be massive.

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Sometimes I get a little "scared" thinking about the possibilities involving tokenizations.

It's kinda crazy.

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