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TOKENIZATION SOLUTIONS
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8 Key Factors for Choosing an Asset Tokenization Platform
Linh Tran

Asset tokenization is a process of converting the ownership of real-world assets (RWAs) into digital tokens on the blockchain. This process requires robust technological infrastructure, including token issuance, investor onboarding (KYC/LML checks), trading, custody, and post-tokenization management. Hence, companies, or issuers, often seek asset tokenization platforms to access these technological capabilities.

In case you missed it, we also created a comprehensive 8-point tokenization checklist for issuers here. 

In this article, we delve into the top 8 factors to consider when selecting the right asset tokenization platform. We'll also use InvestaX's tokenization SaaS platform as an example to illustrate how these factors play out in practice.

What To Look For In An Asset Tokenization Platform?

1. Regulatory Compliance

Real-world asset (RWA) tokens, abbreviated as RWA tokens, are part of the digital asset market and are often classified as digital securities. This means they're subject to securities laws, which vary by jurisdiction. Therefore, look for a tokenization platform that has the requisite licenses and registrations to issue and manage security token offerings and secondary trading of tokenized assets in the regions where you plan to launch your offerings.

For instance, InvestaX’s tokenization SaaS platform is licensed by the Monetary Authority of Singapore (MAS) with Capital Markets Services (CMS) and Recognized Market Operator (RMO) licenses to issue RWA tokens and manage RWA token offerings and trading for global investors.

2. Capital-raise Solution

A successful token offering hinges on efficiently connecting issuers with a broad, compliant investor base. Look for a platform that offers:

  • Global Reach: Access to global investors through a regulatory-compliant platform, such as InvestaX's Singapore-licensed tokenization platform.
  • Seamless Investor Onboarding: Streamlined KYC/AML modules and user-friendly interfaces for a frictionless investment experience.
  • Flexible Investment Options: Support for both fiat and stablecoin investments to cater to diverse investor preferences.
  • Targeted Marketing Assistance: Tailored marketing tools and resources to help issuers reach their ideal investors.

This comprehensive suite, as offered by InvestaX, ensures a smooth capital raise process for issuers and a convenient investment experience for global investors.

3. Liquidity Solution

One critical challenge that the tokenization industry is facing today is the lack of liquidity solutions. While tokenization promises greater transparency, efficiency, and accessibility, a liquid secondary market is crucial for these benefits to fully unfold. Therefore, the asset tokenization platform should provide licensed secondary marketplaces and liquidity solutions for RWA tokens.

‍Unlike traditional exchanges reliant on market makers for a central limit order book, RWA tokens exist on-chain and can leverage smart contracts to enable liquid secondary markets through automated market makers (AMM) and liquidity pools.

InvestaX and our sister platform IX Swap provide licensed secondary marketplaces and the first-ever compliant AMM solution for RWA tokens. Tokenized RWAs can be listed on our secondary market for trading after the initial issue. Additionally, through IX Swap’s AMM solutions, we allow any issuers and investors to start liquidity pools legally and compliantly to facilitate token swaps.

4. Interoperability

Interoperability is crucial for enhancing the accessibility and liquidity of tokenized assets. Choose a platform that integrates with traditional banking systems for seamless conversion between fiat and tokenized assets, featuring bank account linking, wire transfers, and fiat gateways. Additionally, the platform should offer API solutions for integration with issuers’ systems.

For broader accessibility, the platform should support token issuance on public blockchains like Ethereum and its layer 2 solutions (e.g., BASE, Polygon) and integrate with popular digital wallets such as Coinbase and Metamask.

‍Also read: Public vs. Private Blockchain For Tokenization.

5. User-friendly interface

An asset tokenization platform should offer a seamless experience for both issuers throughout the entire RWA token life cycle, which typically includes token issuance, primary offering, secondary trading, custody and on-going management post-tokenization. 

Take our platform for instance. InvestaX’s tokenization platform simplifies the tokenization process, allowing asset managers to easily customize RWA token offering, customize tokenomics and offering terms, define target investor profiles, and more. 

6. Security measures

Asset tokenization platforms need strict security measures to protect tokenized assets against unauthorized access and avoid losses. Key security measures include:

  • Know Your Customer (KYC) module: To comply with Anti-Money Laundering (AML) laws and ensure user verification.
  • Two-factor authentication (2FA): To prevent unauthorized access.
  • Compliance with licensing requirements: To adhere to regulatory standards and maintain platform integrity.
  • Robust smart contract audits: To ensure the security and reliability of the smart contracts used in tokenization.

InvestaX’s platform incorporates all these security measures, and we conduct regular software audits to maintain the highest standards. Additionally, we comply with the Monetary Authority of Singapore -Technology Risk Management Guidelines, ensuring a robust and trustworthy environment for your tokenization needs.

7. Customization

The tokenization platform should also provide customization options, such as customizable smart contracts or branding elements. 

For example, InvestaX provides a co-branded section that allows issuers to use the IXP platform on a custom domain with a custom logo and launch their own tokenization platform. This allows issuers to showcase their brand to investors while leveraging our robust tokenization technology and licenses. 

8. Cost-efficiency

Tokenization encompasses multiple phases, each associated with distinct types of costs. An outline of the tokenization cost structure is presented below, with a comprehensive explanation available here.

Beware of fragmented solutions in this early stage of the RWA industry! Many tokenization platforms may require issuers to manage multiple vendors, leading to hidden fees and inefficiencies.

InvestaX offers a simpler, more cost-effective approach.  Our  Software-as-a-Service (SaaS) model streamlines the entire process with a transparent monthly fee. This gives you access to everything you need to tokenize assets and reach global investors, all in one place.

Tokenize Your Assets On Top Of Our Infrastructure

InvestaX's Licensed Tokenization SaaS platform offers a complete and regulatory-compliant solution for tokenizing real world assets (RWA). Built by industry veterans and licensed by the Monetary Authority of Singapore (MAS), we enable the transition of real world assets into digital RWA tokens for global accessibility.

Contact us for a consultation on your asset tokenization strategy.

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Real-world asset (RWA) tokens are digital representations of real-world assets like equity or debt in real estate and private equity. Utilizing blockchain and smart contracts, they revolutionize investments by enhancing transparency, security, and efficiency. This innovation simplifies financial transactions and expands the range of financial instruments and structures.
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