Game Theory Group

The Blockchain Brief

Trust Token: Tokenizing $256 Trillion Worth Of Real World Assets

Imagine if you had an investment property that was producing rental income and you wanted to pull out 35% of your ownership to fund another project.

What would you do?
Or, imagine if you wanted to buy a couple percentage points of different rental properties in Europe, Asia, the United States, and collect cash flow based on your ownership? What if you wanted to quickly trade that fractional ownership to someone else?
There really is no simple way to do that because real estate is an extremely illiquid asset class.
However, that is all about to change. With the TrustToken Platform, you could tokenize ownership of that property and quickly sell it to interested parties. You could buy the token equivalent of some percentage ownership of rental properties all around the world. Through tokenization, you completely change the game by making illiquid assets, far more liquid…
The implications for this are massive! The idea spans beyond just real estate. Think about tokenized fractional ownership of art, music, books, stocks, bonds, businesses, intellectual property and talent (just to name a few).  
There are companies other than TrustToken that are attempting to tokenize real world assets, but none address the following key problem:

How do you tokenize real world assets with legal enforceability, audit trails and insurance?

TrustToken solves this by creating legally enforceable protocols for blockchain-based ownership and control of real-world assets. They do this in a very clever manner by using trusts and providing the following: (I pulled this directly from their white paper):
SmartTrust – A type of legal contract that appoints asset beneficial ownership and control to a smart contract on a blockchain.
TrustMarket – Where clients can hire fiduciaries who interface with legal-financial institutions, and are legally bound to manage assets as instructed by smart contracts.
TrustProtocol – A protocol that specifies how smart contracts can direct fiduciaries.
TrustVault – A decentralized, secure storage system for complete audit trails of asset management.
TrustToken – the platform’s incentive layer to reward trustworthy behavior, create an audit trail and insure property.
The steps to tokenize an asset are:

  1. Create a SmartTrust
  2. Put assets into the SmartTrust
  3. Distribute tokens from the SmartTrust’s smart contract

TrustToken is used to purchase and insure fiduciary services. Each tokenized asset will issue its own new coin (e.g. BobsHouseCoin, GoldCoin, ETFCoin, BlockchainBriefCoin…etc).

Token 3.png

With asset tokenization using the Trust Token platform you allow for the following as well:  

  • New Asset Classes
  • Liquidity Premiums
  • Investing Without Borders
  • Democratization of Investing
  • Network Effects of Ownership
  • Micro-Securitization of Products and Services 

I had the chance to sit down for a video interview with Rafael Cosman (CTO & Co-founder) where he dives into more detail about the project they are working on and how they plan on changing the world. This is one you do not want to miss.

NOTES: If you are wondering why the TrustToken team decided to use trusts, you should check out the post that their co-founder (Stephen Kade) posted here

Trust Token just re-enforces my belief that we are going to have millions of different tokens. You can check out my old post here about how we are going to manage all of them.