How AMPnet is Digitizing $24 Trillion in Real-World Assets
The AMPnet Protocol is the world’s first truly decentralized tokenization startup. AMPnet allows anybody to create a fully verified tokenized asset through a wholly decentralized ecosystem with no centralized third party or intermediaries.
Tokenization is a broad term that refers to the process of taking a real-world asset, such as real estate, company equity, or traditional financial instruments, and representing it on a blockchain with a blockchain token.
We’ve covered the key obstacles that must be overcome in order to facilitate rapid, widespread tokenized asset adoption in a previous article — Solving the Asset Tokenization Scalability Problem. AMPnet overcomes the key problems presented by asset tokenization such as scalability, verification, and governance.
Understanding the potential impact of asset tokenization on a global scale, however, means we’ll need to take a look at the most tangible use cases of tokenization technology. What are the potential use cases of tokenization, how much value is locked up in the markets and industries that tokenization is positioned to disrupt, and how do we measure the economic impact of tokenization?
Tokenizing Real-World Assets with AMPnet
AMPnet is the first decentralized tokenization platform that solves the key obstacles faced by large-scale tokenization ecosystems. Prior to launch, AMPnet already facilitated the tokenization of over $130 million in assets.
Rather than issue STOs or tokenized assets that are not independently verifiable, AMPnet leverages a decentralized finance approach that incentivizes fair behavior in the AMPnet tokenization ecosystem. This guarantees that the assets issued on the blockchain are matched to real-world assets in a manner that is independently verifiable without centralized arbitration.
AMPnet makes it possible to verifiably tokenize any asset, such as real estate, traditional financial instruments, renewable energy, and much more. These asset classes are currently locked away from the blockchain market, representing hundreds of trillions of dollars in value that — when tokenized — hold the potential to transform the flow and storage of value.
Tokenization Industry Size
The core concept that drives tokenization is relatively straightforward — bring real-world assets onto the blockchain. How can we measure the potential market size of tokenization?
Conservative tokenization market trajectory analysis indicates that the global tokenization market reached a total value of $1.2 billion in 2020.
Contemporary tokenization market analytics, however, take into account only the value represented by centralized tokenized asset issuers.
The market impact of completely decentralized tokenization ecosystems is far greater. Research and data published by McKinsey and the World Economic Forum predict that up to 10 percent of the entire global GDP will be tokenized and transacted via blockchain technology by 2025 to 2027.
Following the methodology presented in WFE and McKinsey data, the potential market value of asset tokenization is staggering — blockchain-driven disruption is positioned to facilitate the creation of a tokenized asset market in excess of $24 trillion by 2027.
The market growth of asset tokenization is driven primarily by growth in a variety of the different types of assets stored and transacted on the blockchain. Tokenization use cases already significantly impact traditional issuing products, such as equity or bonds.
Similarly, the tokenization of non-fungible to illiquid assets such as real estate or small to medium enterprise shares fractionalizes ownership and dramatically increases market accessibility.
Examples of the immense value potential of asset tokenization can already be found in the market today:
- $30 million of Manhattan property tokenized by Amiran Group on the Ethereum blockchain in 2018
- €100 million in debt tokenized through a test project executed by Landesbank Baden-Württemberg (LBBW) and Daimler in 2017
- Swiss fintech startup Mt Perelin tokenizing shares on the Ethereum blockchain in 2018, now representing an $88 million market cap
- Environmental platform Moss tokenizing carbon credits tokenizing over 1 million tonnes of CO2 in 2020
The use cases for asset tokenization are virtually limitless — any real-world asset can be represented by blockchain tokens. In order for widespread asset tokenization to represent 10 percent of the global GDP as per WFE predictions, however, economic systems demand a standardized process that allows anybody to create independently verifiable tokenized assets.
AMPnet provides asset issuers with a framework through which these assets can be issued, verified, and governed through a decentralized, transparent, and auditable ecosystem. Let’s take a look at the potential market reach of AMPnet.
Disrupting the $1.5 Trillion Renewable Energy Market
AMPnet brings the ownership of renewable energy sources onto the blockchain. Using the AMPnet framework, it’s possible to create global, decentralized systems that digitize the physical power plants.
Deloitte and International Energy Agency (IEA) data indicate that the global renewable energy market will exceed $1.5 trillion by 2025. AMPnet tokenization brings this value on-chain, mirroring physical assets on the blockchain in order to decentralize and democratize renewable energy sources as the money of the future.
Digitizing $20 trillion in Collateral
The decentralized finance or DeFi ecosystem has exhibited explosive growth over the last year, skyrocketing from $686 million in January 2020, to $15.6 billion in January 2021. The DeFi paradigm shift focuses on mirroring traditional financial services on the blockchain, decentralizing virtually any centralized financial service or platform.
The crypto lending market alone exceeds $10 billion in value and primarily focuses on loans secured by collateral in the form of cryptocurrency or fiat currency. AMPnet already partners with SmartCredit.io to allow AMPnet users to use real-world asset-backed tokens as collateral for crypto loans
Data published by crypto data analysis platform Arcane Research and crypto exchange BitStamp indicates that the total value of the global market for collateral represents over $20 trillion in assets. AMPnet holds the potential to digitize and decentralize collateralization, minimizing friction between stakeholders in the debt ecosystem.
Democratizing Business Capital
Capital rashes are complex and inefficient. Small to medium enterprises seeking capital to expand or scale typically seek capital from traditional lenders. SME’s that are unable to access traditional finance, however, often turn to private investors and sell share capital.
The process of structuring a business for issuing share capital, however, can be costly — projects under $100,000 in funding experience negative ROI when taking the cost of issuance into account. Crowdfunding offers SMEs an alternative to selling equity or traditional finance, but typically only rewards low-risk projects.
AMPnet allows businesses to independently raise capital through a streamlined funding platform, decentralizing the $200 billion global crowdfunding market. Read more about how AMPnet empowers businesses with the ability to fund their own projects here.
Asset tokenization holds the potential to decentralize and democratize access to over $24 trillion in assets within the next decade. Future tokenized asset ecosystems demand reliable, transparent, and verifiable asset issuance protocols such as AMPnet in order to scale and achieve widespread adoption.
Tokenization represents a paradigm shift in the operation of the financial ecosystem as it exists today. AMPnet functions as the foundation of future tokenized asset markets, establishing a framework through which the tokenized assets of the future will flow.
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