Tokenization, ICO and Cryptocoin

MyNeofintech allows the access to capital programs through the tokenization of assets and the different possibilities of use that blockchain technology offers us are involved in all sectors, including the financial one.

The platform with all the digital technologies applied autonomously can propose to a corporate user one of the revolutions of the traditional financial sector, the tokenization of assets.

The tokenization of assets makes blockchain a platform that allows the trade of goods and services, thus overcoming the difficulties of the negotiations of the parties involved.

In addition to the agility in the negotiation, the tokenization of the assets allows the parties to save time reaching a fast, secure, transparent negotiation with clearly defined responsibilities.

Exchange tokens have been around for some time and are currently proving very successful, as they have been offering high liquidity despite the general stagnation of the global market.

In blockchain, tokens are the units of value, which are transmitted digitally, like bitcoins, and can be bought, sold or used in exchange for all kinds of goods and services, such as the purchase of cryptocurrency.

A token is a substitute for a real value, such as a currency or a cryptomoney. We can compare it to the chips of a casino or the chips of an amusement fair, each token or chip has a value associated with it, which can be exchanged for liquidity or for a trip in an attraction.

For example, in a token exchange transaction, a buyer wants to acquire tokens with value A in exchange for tokens with value B. This transaction involves the seller of type B tokens receiving a certain number of type A tokens in exchange for the type B tokens. The transaction will involve a minimum conversion rate for both parties. When deciding on such a rate, the buyer can consult the exchange rate when deciding to make the transaction.

At the time of the operation, through an intelligent contract, the network consults all the reservation requests and looks for the best conversion rate. When it finds a suitable rate that meets the minimum requirements of the buyer, it proceeds to carry out the transaction.

Most tokens are distributed through an ICO, which in Spanish is known as oferta inicial de la moneda. This is a mechanism to obtain funds for the financing of projects where new projects sell their tokens in exchange for cryptocurrency.

There are few, if any, restrictions on who can participate in an ICO and, given that money is acquired from a large number of investors, the sums obtained in ICOs can be astronomical. One of the fundamental drawbacks with ICOs is that many of them receive money before the product actually exists, which makes the investment high risk. In contrast, this method allows and encourages the creation of products and the development of new ideas.

Cryptocurrency, in short, is a type of token. The pioneers in the world of cryptomonies were the so-called "colored coins", which were nothing more than bitcoins that included a specific line of code that made them useless in order to represent a real value which could be transmitted through blockchain.

Security tokens are those that derive their value from an external good, which can be traded. However, these tokens are subject to laws regulated by governments. Failure to comply with such laws can result in fines and penalties.

On the other hand, security tokens can offer a wide range of applications, one of them and the one that offers a better prognosis, is the ability to offer tokens as a digital representation of what would be the actions of a company.

In addition, security tokens give the owner the right to claim his investment interests.

Utility tokens are simple applications or platforms based on a blockchain and allow their owners to access them easily. These platforms allow future access to the products or services offered by the company issuing the tokens. Therefore, these utility tokens are not designed to make an investment.

Just as a store can accept orders for a product that will be launched months later, a startup can create utility tokens and sell digital coupons for products and services that are still under development.

Hybrid tokens borrow elements of utility tokens (or even cryptosystems). As with utility tokens, a limited supply is created. It combines the two models to create a token structure (supply) that takes advantage of the best of both worlds. These tokens can be used to unlock the utility of a decentralized network or application, acting as a means of exchange within a given network. As with utility tokens, the early lack of utility for token holders in such applications or networks is mitigated by the additional potential for financial gain through appreciation of the value of a hybrid token when the network is more widely adopted.

Token hybrid gives token holders economic rights. This could, for example, take the form of additional profit rights or capital rights in the issuer's business. However, it can also take the form of a right to certain sources of income within a network.
A hybrid token can provide stock-like features, such as voting rights, dividends, and share ownership, as well as retain the most important feature of utility tokens: increased platform usage still leads to a direct increase in the token's price.

More importantly, the linking of economic rights to a utility token (resulting in a hybrid token) brings the token into the realm of securities law. This means that issuers must comply with all requirements generally applicable to the offering of securities (or security tokens). ​

Smart Contract

Asset tokenization is a process that allows you to convert some real-world assets into tokens. This process is carried out through a Smart Contract.

The great advantage of this process is that the tokens created can be registered, exchanged or stored in a blockchain. In this way, real-world trade, in which the parties had to sit down to negotiate and carry out numerous bureaucratic procedures, is transferred to the digital world, where everything is just a click away.

Tokenized assets are those that generate or can generate an economic return or increase their value, such as real estate, securities, products, art, intellectual property and objects, among others.

Why tokenize assets for Smart Contract trading versus the traditional model?

Other information

What are crypto coins?

Crypt coins are virtual currencies. They can be traded and operated like any other traditional currency, but are beyond the control of governments and financial institutions.

There are a large number of crypto-currencies available, all with their own characteristics and applications. Those with the largest market capitalization are, at least for now, a minority including bitcoin, bitcoin cash, ether, litecoin, ripple and dash.

Cryptocurrencies can be considered an alternative to traditional currencies, but were actually conceived as a completely conventional payment solution. At the moment, a good number of shops accept cryptomoney as a form of payment.

While it is true that their validity as a method of payment is critical to their value, crypto currencies usually look more like commodities such as gold than the forex market. Just like commodities.

This means, at least for now, that crypto-currencies are treated mainly as a commodity, i.e. an investment whose return comes from speculation on the ups and downs in its value.

What is an ICO?

An ICO is an operation aimed at raising capital for a startup, using blockchain technology, by means of a prior issue of tokens or value representations in a block chain.

When people participate in an ICO they are not acquiring equity or company assets, as is the case with crowds, but rather the tokens necessary for the operation of an application developed by a company. In this way, what is being done is a pre-sale of the service that is going to be offered and what people are doing by contributing their money in this pre-sale is acquiring the tokens that will allow them to use the service once it is developed.