July 22, 2022 by Editor's Desk
4724
After analyzing quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others
After analyzing quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others missed capitalizing on the market.
Let us look at the various tokens offered in Q2 of 2018.
Utility Token: As the name signifies, these tokens create utility for the token owners as these were the tokens of a protocol. They are basically two ways of providing utility to token owners –
- By giving access to network or service feature
- By allowing token holders to actively contribute work to the system
Some tokens are capable of giving both facilities to the holder while a few others don’t provide any utility. Q2 of 2018 saw the capitalization by Utility token. There was a surge of 32% in projects offering utility tokens. The token to raise the highest mean funds was a utility token accounting for approximately $22 million.
Security Token: These tokens are issued on the promises of dividend payment, receipt of company shares, credit tokens, etc. These tokens are subject to federal security regulations and failure to abide results in penalties and even derailment of projects. Security tokens accounted for 4.88% of project shares in the ICO market. The Q2 of 2018 was quite upsetting for security tokens as there was an 8% decrease in projects offering security tokens. The mean fundraised by security tokens was bleak and far less than $5million.
Vote Token: These are the tokens that make the token holder powerful and give them the right to vote and the ability to influence the development of a project. Vote tokens accounted for only 0.27% of the total number of ongoing projects in Q2 of 2018. The share of mean funds raised by vote token was less than $1million.
Also, read –The new age blockchain-powered phone
Service Tokens: Now we are talking about the tokens on which maximum projects tried seeking funds. The service tokens are exchanged in place of the services offered by the project. Though the number of projects offering service tokens decreased by 24% even after that 42.5% of all projects were based on service tokens. The market capitalization of service tokens lags far behind of utility tokens and it grossed the mean funds raised accounted to about $6million only. On the contrary, the maximum number of unsuccessful projects were marked as service tokens. Q2 of 2018 saw more than 150 service token based unsuccessful projects out of total 827 projects initiated in Q2.
Reward Tokens: These are the tokens which are awarded to the contributions of the participants of the network. A total of 0.81% of projects was based upon reward tokens. The performance of Reward tokens was better than service tokens, hybrid tokens and vote tokens. The funds accumulated by reward tokens were more than $6million. The probability of success and failure was equal in reward token meaning almost equal number of projects succeeded and failed in Q2.
Hybrid Tokens: This is one fascinating type of token where the token is given for the services as well as for work performed for the network. 15.04% of total projects were giving Hybrid tokens to network participants in Q2 of 2018. The mean funds raised by Hybrid tokens were about $6million. There were about 60 successful projects which gave Hybrid tokens and the number of failed hybrid token projects were less than 50.
Cryptocurrency: Now we are talking about the buzz of the decade.
Paul Vigna once said, “The whole human populace is now taking charge of the means of production and changing the rules of the game. They’re making their own freaking currencies, for God’s sake!”
This is very evident with the pace of ICOs coming up with their own currency. 1.36% of total projects launched their own cryptocurrency with no additional exceptional features. These new cryptocurrencies raised a mean fund of about $7million. Most of these projects were unable to succeed.
The second quarter of 2018 was evident in the fact that innovations in the Blockchain industry are the new normal. Experts are following the trend and investors are cashing out the opportunities. Entrepreneurs are getting new ways and means to implement their ideas. We expect the same trend to continue in the rest of the year.
FAQs
Now, many in both the crypto world and mainstream finance are working to bring those benefits to traditional assets, in an emerging sub-field of digital assets called asset tokenization. At its core, asset tokenization means putting the record of ownership for traditional assets on blockchains.
What problem does tokenization solve? ›
Because tokenization will allow for easy and efficient collateralization of many more financial assets, tangible assets and intangible assets. It will also allow for the creation of more assets and significantly expand the asset base of individuals, firms and the world, which can be used in financing transactions.
What is the future of Tokenised assets? ›
Future Outlook
In conclusion, tokenization is not merely a trend but a transformative force shaping the future of finance. From enhancing liquidity and accessibility to fostering innovation in traditional sectors, tokenization continues to unlock new possibilities in the evolving digital asset landscape.
What are the benefits of tokenization in crypto? ›
Tokenized assets benefit from permissionless liquidity, open access, on-chain transparency, and reduced transactional friction compared to traditional assets. Tokenized assets require high-quality off-chain data from secure and reliable Chainlink oracles.
Which crypto is best for tokenization? ›
Ondo Finance (ONDO) stands at the forefront of the Real World Asset (RWA) tokenization movement, offering innovative solutions that bridge traditional finance with decentralized finance (DeFi). It provides a platform for tokenizing real-world assets, making them accessible and liquid on blockchain networks.
What is the difference between crypto assets and tokens? ›
Cryptocurrencies are the native digital asset of blockchain networks, and a core part of how the networks function. Crypto tokens are secondary assets built on top of existing blockchain networks, but not a core part of how the networks function.
What are the common issues with tokenization? ›
Issue: Tokenizers may treat numbers inconsistently, breaking them down into separate tokens or keeping them as part of a token. Challenge: Inconsistent tokenization of numbers can impact the interpretation of numerical information, especially in tasks involving mathematical or quantitative analysis.
What are the disadvantages of asset tokenization? ›
Regulatory Uncertainty
The regulatory landscape for tokenized assets is still evolving, so it involves a lot of uncertainty and complexity. To a company or an investor, that presents a challenge! Because getting around diverse regulatory frameworks usually requires strict adherence to compliance standards.
What is the risk of tokenization? ›
Another risk associated with tokenization is the lack of regulatory framework. Since the technology is still relatively new, many governments have yet to establish clear regulations around tokenization, leaving investors and businesses open to legal risks.
Which real world assets are being Tokenised? ›
Tokenization uses digital representations — also known as “tokens” — of hard assets, such as money, real estate, art or even contractual obligations. It embeds them into data that moves between parties through a blockchain.
In 2024, we can expect to see a surge in institutional adoption of real estate tokenization. Large investment firms, asset managers, and real estate developers are increasingly recognizing the benefits of tokenizing properties, including increased liquidity, fractional ownership, and enhanced transparency.
How do you Tokenize real assets? ›
How To Tokenize An Asset
- Select the Asset to Tokenize. The first step is to identify the asset that you want to tokenize. ...
- Define Token Type. ...
- Choose the Blockchain You Want to Issue Your Tokens On. ...
- Select a Third-Party Auditor To Verify Off-Chain Assets. ...
- Use Chainlink Proof of Reserve To Help Secure the Minting of the Tokens.
The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure. The disadvantages of cryptocurrencies include their price volatility, high energy consumption for mining activities, and use in criminal activities.
What is the difference between tokenization and crypto? ›
Cryptocurrencies are decentralized, have no real-world asset backing, and are often used as a medium of exchange and a store of value. Tokens, on the other hand, are created on top of an existing blockchain and are subject to the control of the company or organization that created them.
How does tokenization make money? ›
Blockchain tokenization and 'airdropping'
This is where blockchain tokenization comes in. With the fund ownership represented on a blockchain, investors benefit from same day payments and have any income automatically reinvested. In this case, the income is “airdropped” to investor accounts as new tokens.
What is an example of tokenization? ›
Payment Tokenization Example
When a merchant processes the credit card of a customer, the PAN is substituted with a token. 1234-4321-8765-5678 is replaced with, for example, 6f7%gf38hfUa. The merchant can apply the token ID to retain records of the customer, for example, 6f7%gf38hfUa is connected to John Smith.
What are the risks of tokenization? ›
Financial stability risks of tokenization
Risks include: a firesale in tokenized markets impacting TradFi markets. volatility from crypto markets transmitted to underlying reference assets. concerns around under-collateralization triggering a run.
What does it mean to tokenize real-world assets? ›
Tokenization is the process of creating a digital representation of an asset through a blockchain-based token. Explore this trillion-dollar market opportunity.
