Tokenization of illiquid assets such as real estate has several advantages:
Significantly increasing number of buyers increases liquidity.
Speed & Reduced Costs
Because tokens are designed with smart contracts (based on predefined parameters), some parts of the buy & sell process are fully automated. This automation can reduce the administrative burden of buying and selling, with fewer intermediaries required, leading to faster transactions with very low costs.
Increased security & transparency
A token integrates the rights and duties of the holder in an immutable way. These characteristics make it possible to considerably increase the transparency of transactions, making it possible to know with whom the buyer deals, what are the rights and duties associated with each party as well as a history of who has already owned this token.
Accessibility & fluidity
Tokens make the underlying virtually divisible (investors can buy tokens that represent incredibly small percentages of the underlying). The minimum amount to invest is very small with a much larger number of potential buyers. The holding period is also reduced because buyers can trade their tokens in real time on the secondary market.
The current distribution network remains costly and time consuming for the end customer. Here’s an example of buying a fund’s shares through the traditional channel:
Trend Only will reduce intermediaries and save time & money thanks to the Blockchain and tokenization of funds. Here is an example of a purchase of shares in Carmundi Patrimoine C through an innovative channel:
Benefits for asset management companies
No intermediaries (no retrocessions of commissions)
No borders, fluidity in transactions
Simplification of the subscription/redemption process increasing the potential number of subscribers
Lower transaction costs
Benefits for clients
No intermediaries (No entry, exit & account management fees)
Significantly increased flexibility in allocation
Possibility of investing small amounts, fairness in terms of costs, equal treatment
For both parties : security, transparency and integrity of orders and transactions!