What is Tokenization-as-a-Service (TaaS)?
Web3 represents the future of the internet — a way for ownership to go beyond the physical, giving fans and consumers concrete ownership of the digital products they love. And thanks to new technologies like tokenization, companies can harness the power of the blockchain to provide extra value for their customers. Analysts expect the tokenization market to grow to $5.6 billion by 2026, and organizations need to understand this exciting new opportunity to get the most out of it.
At a high level, companies offering Tokenization-as-a-Service (TaaS) help owners convert valuable physical items like rare collectibles, one-of-a-kind memorabilia, and other unique goods into digital assets, allowing them to be easily bought and sold on digital marketplaces. Read on to learn how this process works and discover how you can leverage tokenization for your brand or intellectual property to generate additional revenue streams.
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What Is Tokenization-as-a-Service (TaaS)?
Tokenization-as-a-Service is a business model offered by Web3 companies that allows asset owners, brands, collectors, and intellectual property holders to create an NFT backed by physical goods. There is no limit to what type of physical goods can be tokenized, but they’re usually assets of value like rare collectibles, art, or cultural memorabilia. The resulting NFT acts as a collectible in and of itself, as well as a representation of ownership of the physical item. When someone buys, sells, or trades the NFT on a digital marketplace, ownership of the physical item transfers along with the NFT.
In addition to tokenizing real-world assets, tokenization services will often store the physical asset within a vault to keep it secure. Current owners of the NFT can elect to have the physical collectible shipped to them if they choose, or they can keep the item stored in the vault. This option benefits people who buy and sell collectibles for profit, as they can ensure the seller properly transfers ownership without needing to send rare and delicate collectibles back and forth through the mail.
Plus, as younger generations move to urban centers with smaller living spaces or embrace the benefits of remote working, they’re increasingly looking to storage solutions for ways to house their collectibles. NFTs allow those younger collectors a chance to own rare, unique, or oversized items without the need to clutter their apartments, or interfere with moving plans or traveling abroad.
Discover how tokenization can increase the value of your IP and generate additional revenue streams with our guide, How a Tokenization Service Can Bring Your IP to the Digital Sphere.
What Are Physical-Backed NFTs?
Physical-backed NFTs are the actual digital and physical assets that tokenization services work with. These services take in physical objects, mint them on the blockchain to create an NFT, then sell that NFT on the digital market. Physical-backed NFTs contain digital information about the asset — for example, an autographed painting could include information regarding when and where the artist signed the piece, as well as anecdotes explaining why she created this particular work at this point in her life — as well as the provenance of ownership for the physical object. In some circumstances, the original creator will receive royalties each time the physical-backed NFT is sold or traded, creating passive revenue streams for each item on the blockchain.
Many companies in the collectibles market have turned to physical-backed NFTs as a way to make buying and selling easier and more exciting. Nike’s acquisition of NFT creators RTFKT has paved the way for the shoe company to sell exclusive sneakers on its NFT market, which provide owners with a real pair of their digital counterparts. Others have discovered ways to sell real estate or energy production through physical-backed NFTs.
To learn more about converting physical assets into digital goods, check out Physical-Backed NFTs: Everything You Need to Know.
What Is an NFT Vault?
NFT vaults are one of the most important aspects of the assets tokenization process, as they protect the physical asset while its NFT is sold on the digital market. As the value of the digital NFT is largely dependent on the quality and rarity of the physical asset, the collectible must be properly secured and accounted for to ensure that it is not damaged or stolen.
These vaults can take many forms but are often found in high-secured warehouses that organize individual crates into grids. Other assets, like trading cards, are often found in vaults that include smaller lockboxes or safes, while owners can store larger or more valuable assets within repurposed bank vaults. These vaults provide temperature-controlled, windowless, pest-free environments, offering additional protection over personal safes and are operated by private, independently-operated security companies.
Discover how NFT vaults secure physical assets by reading What Is an NFT Vault?
How to Choose a Tokenization Platform
Now that you understand the basics, it’s time to choose a service to manage the tokenization of your intellectual property. At its core, a good tokenization service should offer the following:
Tokenization: The ability to mint and issue digital tokens representing your physical assets.
Token marketplace: A channel to buy and sell digital assets.
Asset storage and security: A secure vault for storing physical assets to prove authenticity and condition while allowing the asset to retain its value.
Depending on your own needs, you may want to investigate tokenization services that also offer the following:
Digital bonuses: Some services offer the ability to embed encrypted bonuses within the minted NFT, like playable MP3 files, concert tickets, or rewards on other metaverse platforms.
Community services: Buying and selling NFTs requires building a community of fans looking to buy, sell, and collect them. Some services have built-in platforms for cultivating an audience and communicating directly with fans.
Fractional ownership: Some platforms can fractionalize NFTs to allow for multiple owners to claim a stake.
For other tips on how to pick a tokenization service that’s right for you, read Choosing an Asset Tokenization Platform: How to Build Your Shortlist.
Which Companies Can Help Tokenize Real World Assets?
These companies specialize in tokenizing assets on the blockchain, bringing their Web3 expertise to different collectibles and asset markets.
Dibbs offers partners with businesses looking to convert their physical assets into digital goods with an all-in-one tokenization service. We’ve brought thousands of collectors together over a passion for hunting down their favorite assets. We want to apply that experience to giving your brand a physical-backed NFT strategy that generates real revenue. Fill out the form below to learn how tokenization can open up new opportunities for your IP.
Tokeny is a Luxembourg-based tokenization vendor that specializes in real estate, private equity, and other investment products for customers across Europe. In addition to offering tokenization for various securities, the platform also provides financial resources and partnerships for customers new to tokenizing financial assets.
For examples of other companies capable of minting NFTs backed by physical assets, check out 5 Tokenization Companies Helping Bring Physical Assets into the Metaverse.
The Best NFT Marketplaces
Once an IP holder tokenizes an asset, it must be listed on an NFT marketplace for users to buy or sell it. Here are a few of the most popular options:
Rarible is one of the largest Web3 marketplaces on the internet, hosting drops from the Bored Ape Yacht Club and Renga, along with original works from thousands of artists.
SuperRare focuses solely on connecting buyers with NFTs of original works of fine art.
Dibbs is the world’s only 24/7 fractional collectibles market, allowing buyers the opportunity to own a portion of high-value trading cards and other collectibles.
Read The 5 Best NFT Marketplaces for Buyers, Sellers, and Collectors to learn about other options for selling your newly minted NFT.
Level Up Your IP Through Tokenization
If your organization is new to the Web3 space, you need an expert to ensure your first drop is successful. At Dibbs, we want to partner with you to bring your physical-backed NFT strategy to life. Get in touch today and discover how our fully-featured tokenization service can help give you peace of mind.