Sean White, XDC Network: Why is tokenisation so important? Three use cases
Tokenising is widely used for the fractionalising once non-divisible asset units, as well as bequeathment to prove legal rights to an individual or organisation (think: property ownership, qualifications, and personal identifiers). But tokenisation offers so much more than this, cementing its importance in this new digital era. In this piece, Sean White, Head of Business Development at XDC Network, Australia, talks us through some other successful use cases.
Tokenisation allows for a variety of use-cases, broad as they are deep. The examples outlined here cover everything from the buying and selling of gold to financial management, securities, and NFT-based identifiers, all supported by the XDC Network.
Simplifying the gold trade network
Gold has been part of the fabric of trade and capitalisation throughout recorded history with one of its idiosyncrasies being the burden of carrying and storing the shiny stuff securely and easily. Further, there are many third parties involved in the process – namely miners, governments, financial institutions, and individual owners.
XDC Network is primed for deployment of this use case, as the transaction costs are very low, even for the tiniest gram of gold. The Network’s Smart Contract versatility allows for myriad trading and payment permutations with the corresponding scalability to absorb the immense liquidity of units and bearers.
ComTech Gold have been doing this at least a year on the XDC Network – holding over 120 kilograms of gold in Dubai – as has Kinesis Monetary, similarly tokenising gold and silver for retail clients (forking off the Stellar Network).
Traceability and accountability for financial institutions
Financial Institutions and not-for-profits can utilise utilise the traceability and accountability aspects of blockchain. Implementing a Deposit2Deploy framework, treasuries of nations, financial institutions, and NFP entities alike can rigidly guide allocated funds to specified destinations. This gives the communities of such organisations confidence in the proper and intended use of the financial contributions.
XDC Network is proud to have white-label projects that are fit-for-purpose for such requirements.
Secured Token Offerings are a regulatory friendly adaption of the early crypto, Initial Coin Offering (ICO) instrument – which mimicked the Initial Product Offerings (IPOs) of the classic company stock markets framework. What many may consider XDC Network’s Layer 2 Flagship, the Globiance Group, is amidst the sale of such STOs – one of the first on the network. GlobiancePay is offering a profit-share STO that allows individuals, without the egregious red-tape and bureaucratic hurdles, to participate and share a ROI on behalf of the efforts of the Blockchain Bank.
Identity and access management
NFT-based Identifiers are proving to be a real gem in blockchain use-cases. Civic Pass joins the XDC Network after a recent expansion from Solana, Ethereum, Polygon, and Casper Networks. Civic offers a non-transferable token that allows identity and access management for smart contracts, so that dApps can take control over which wallets are allowed to use their services.
Native to the XDC Network, a team from ElitWeb3 has also unveiled work on Soulbound Tokenisation – NFTs that are non-transferrable to be used in Know Your Customer (KYC) use-cases with financial institutions. In the very near future we may likely see how the incorporation of ownership of real estate, qualifications, contracts, patents and more. In fact, LawBlocks, built on XDC Network, is actually in the building process for these exact use-cases.
Hybrid capabilities and challenges ahead
Adding another layer to these tokenisation opportunities is the XDC Network’s hybrid capabilities – that is, having public and private ledger capabilities. The aforementioned use cases and value propositions take on extra meaning for the builders and the end-user. And add to that conversation, with the soon-to-be-released Protocol upgrade, XDC 2.0, which will offer an exciting array of features and functionality.
Of course, there are barriers to tokenisation to be resolved, namely one of universal acceptance – much like a driver’s license, tokens and token use cases are somewhat restricted to the legal and/or network frameworks under which they are founded.
That said, once regulations and legislations catch up to the creativity, innovation and utility of blockchain, progress will pick up steam in many nascent – and yet to be dreamt – applications to tokenisation.
Hear Sean dive into the evolution of blockchain in his talk, ‘The Evolution of Blockchain: Memes, Utility Coins & Tokenisations’, on Day 3 of Blockchain Week 2023. Be sure to also register for the XDC Network’s introductory workshop to blockchain! Find out more and secure your spot here.