Home collateral Decentralized Financial Ownership Tokens for Real World Assets

Decentralized Financial Ownership Tokens for Real World Assets


One of the interesting innovations about Centrifuge and other similar collateral asset systems is the mix of public and private NFT data respecting confidentiality.

Decentralized finance has profoundly changed our financial world. The emergence of cryptocurrency and consensus verification, the innovation of decentralized lending, and other blockchain-related phenomena are integrating new digital currency systems and making old, traditional banking systems obsolete.

However, one of the biggest concerns of the average investor when it comes to decentralized finance is the volatility of cryptocurrencies and smart tokens.

In the open market, much of the value of Bitcoin or any other type of digital currency is likely to soar and fall depending on changing market factors and the psychology of asset holders. As with individual stocks on the stock exchange, the numbers go up and down a lot.

This makes traders nervous when playing in the cryptocurrency market itself and trying to stay diversified in case the road gets tough.

With that in mind, savvy investors are taking another route to decentralized financial assets backed by real-world assets.

Ethereum and asset tokenization

The basic idea here is that the digital coins and tokens that people hold will have a value tied to real assets such as real estate, royalties, or intellectual property.

These real income streams are tied to the token or digital asset in a way that creates fundamental value in these systems, and especially for some traders, that is not correlated to the core coin market itself.

Take the example of Ethereum, which is commonly known as the second largest cryptocurrency in the market after Bitcoin.

The price of Ethereum’s Ether coin also fluctuates a lot. Just a few years ago, ETH was worth tens of dollars, and now it’s worth thousands. It goes up and down.

But people who truly understand the nature of Ethereum know that it was designed to handle smart contracts that may be of totally different value than the value of ETH itself.

In other words, this type of blockchain and asset holding behavior is more about facilitating a contract than owning a digital coin. For example, if you hold an Ethereum token linked to real estate value and the price of ETH goes down, the housing market does not. And your wallet has a better chance of staying afloat.

Public and private data for NFTs

Let’s talk about another kind of feature that is really helping the secured digital asset market to thrive.

Non-fungible tokens or NFTs are a big novelty in decentralized finance. These digital assets are essentially symbolized in the same way as other secured assets, perhaps a work of art or something with collectible value.

One of the interesting innovations about Centrifuge and other similar collateral asset systems is the mix of public and private NFT data respecting confidentiality. In the peer-to-peer system, sensitive cardholder data remains private, while tracking data, in accordance with blockchain conventions, is public.

Here’s another example of a revenue stream from secured digital asset tokens and smart contracts – it’s called invoice factoring. Invoice factoring companies sell the probability of future customer payments, and new smart tokens can attach to these real values ​​as well.

Benefits of guaranteed tokens / digital assets

It is easy to see some of the real applications of these types of assets. On the one hand, being able to trade something that is backed by consensus-based verification systems offers an alternative to the many unbanked that are not served by traditional commercial banking systems. Scaling is easier and again the volatility of a single cryptocurrency can be diversified into much more stable holdings.

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A graduate in Intercultural Communication, Julia continued her studies by obtaining a Masters in Economics and Management. Captivated by innovative technologies, Julia became passionate about exploring emerging technologies, believing in their ability to transform all spheres of our lives.


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