Symbol from NEM: How Tokenization Can Streamline the Regulated Asset Space
March 11, 2021, 9:03AM EST · 1 min read
At NEM, we know that whiskey has long been a popular investment hard asset, with the product being described time over as ‘liquid gold’ due to its annual appreciation rate producing strong historical returns. Along with the spirit’s reputation as a valuable commodity, whiskey bottles have also become an esteemed collector’s item, highly sought after and regularly traded upon. However, like all others, this investment opportunity poses some undeniable challenges. High up-front cost, required knowledge of the industry, and also a multi-year lock-up of cash-flow due to aging have all played a role in deterring investors.
With the March 15th introduction of our next-generation Proof-of-Stake (PoS) public blockchain, Symbol from NEM, we have realized that tokenization within the regulated asset space is not only a progressive step forward for the global economy but also an innovative opportunity for funds to leverage the platform’s technology in a bid to combat investment challenges, just like those of the whiskey industry. Symbol from NEM tackles the slow process of returns from whiskey investment due to transfer restrictions and lock-up periods. The tokenization of this fund also ensures complete privacy and safety of investment through our unique identifier codes and contract plug-in framework.
Through our partnership with Wave Financial and the Wilderness Trail Distillery of Danville, a leading Kentucky craft distiller, we will together be able to liquidize this asset to generate cash-flow, create access without administrative restrictions, and most importantly, tokenize the fund in order to give flexibility to investors to trade both in and out as needed. This creates the opportunity for round-the-clock trading, with tokens tradeable on select digital security exchanges. Along with this, trading through Symbol offers close to instant settlement, in contrast to the lengthy timespan of traditional whiskey asset transfers due to bonded notes and extensive legal contracts.
This use-case is one example of the many ways Symbol from NEM can be utilized for tokenized investment opportunities within the regulated asset space. Symbol’s advanced architecture allows for interoperability within the network through trustless cross-chain swaps and integration with existing systems and processes, meaning that the platform can be seamlessly blended with many fund opportunities. By doing so, we can streamline these investment funds so that they are more efficient, there is a significant reduction in administrative costs, and investors have greater access to the trading market – all of which are fundamental pillars in NEM’s vision of a new, hyper-efficient digital economy.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.