Introduction to Tokenization

A token represents the ownership of something. A majority of blockchain use cases start with a token. Fungible tokens are all identical and cannot be distinguished from each other; currencies are an example of fungible tokens. Non-fungible tokens (NFTs) are all unique. They’re adapted to represent legal documents, luxury goods, pieces of art, and so on, whereas hybrid tokens are a mix of both as they introduce token classes. A class can be tranches of a pool of securities, a container on a ship, and so on. Adopting a modular strategy provides the necessary adaptability to meet the needs of both conventional stakeholders and crypto-oriented audiences, thereby facilitating the merging of decentralized finance (DeFi) and centralized finance (CeFi) into a tangible reality.

In this chapter, we will discuss the possibilities of creating a real-world asset with tokens, creating new business models with tokens, and looking at examples of digital assets...