Tokenization: The key to unlocking Illiquid assets

In recent years, tokenization has emerged as a pivotal topic in discussions about the future of financial markets. According to CoinDesk, the total value of tokenized assets has already surpassed $1 trillion, with projections estimating the market could reach $15 trillion by 2029. This impressive growth is driven by the ability of tokenization to effectively “revitalize” illiquid assets, providing them with the flexibility and transparency that were previously unattainable.

What is Tokenization and Why It Matters

Tokenization is the process of converting traditional assets (such as equity, real estate, commodities, and debt instruments) or digital contracts (like SAFTs/SAFEs) into digital tokens on a blockchain. Each token represents ownership rights to a portion of the asset or a stake in a project. By doing so, tokenization offers several key benefits:

• Increased Liquidity: Assets that were previously “locked” or required lengthy processes to sell become tradable almost in real-time.
• Simplified Access to Capital: Asset owners can raise funds without selling the entire asset, while investors can participate in projects with lower entry barriers.
• Enhanced Transparency and Security: Blockchain technology ensures that all transactions are transparent and secure, reducing the risk of fraud and enhancing investor trust.
• Democratization of Investments: Retail investors, who previously couldn’t participate in large-scale deals, can now buy shares in assets or projects with smaller amounts.

Experts estimate that over 30% of illiquid assets (including real estate, company shares, and contracts) could be partially or fully tokenized by 2030. For the market, this means the emergence of new liquidity sources and an increase in the number of private investors participating in these deals.

Tokenization in the Marsbase Ecosystem

At Marsbase, we are proud to be pioneers in the field of tokenization, focusing on SAFTs (Simple Agreements for Future Tokens) and SAFEs (Simple Agreements for Future Equity) contracts. Our ecosystem enables both B2B partners and retail investors to benefit from tokenization through:

• Creating Liquidity: Transforming previously illiquid assets into tradable tokens.
• Accelerating Market Entry: Attracting capital quickly through blockchain-based tools.
• Access to Unique Deals: Offering investment opportunities that are not available through traditional financial instruments.

Marsbase Tokenized Loan Deal

To illustrate the potential of tokenization, consider our successful execution of a tokenized loan deal:

Case Summary:

• Collateralization: Marsbase collateralized its equity and token warrants to secure two loans with a 65% LTV ratio and a 50% liquidation threshold, resulting in nearly 4x over-collateralization.
• Loan Terms: The first loan offered a 48% annual interest rate for 1 month, yielding about 4% return for investors. The second loan provided a 42% annual interest rate for 2 months, delivering roughly 7% returns for investors.

This model demonstrates how tokenization of assets allows Marsbase to attract capital swiftly without selling equity stakes, while investors benefit from high-yield opportunities with controlled risks.

Benefits for Founders and Investors

For Founders

1. Accelerated Capital Raising: Quickly obtain funding without excessively diluting equity.
2. Market-Based Valuation: Tokenized assets can trade on secondary markets, providing a more transparent valuation.
3. Global Audience: Remove geographical barriers to attract a diverse pool of international investors.
4. Flexible Instruments: Utilize collateral mechanisms (as demonstrated in the Marsbase loan deal) for short-term financing without lengthy procedures.

For Retail Investors

1. Low Entry Barriers: Fractional ownership allows investment with smaller amounts, enabling portfolio diversification.
2. Enhanced Liquidity: Tokenized assets can be traded on secondary markets with minimal fees and streamlined processes.
3. Transparency: Blockchain records ensure immutable and transparent transaction data.
4. Passive Income: Staking and yield farming mechanisms allow token holders to earn income without selling their underlying assets.

Market Growth Projections for the Next 5 Years

According to research by BCG and CoinDesk, the tokenization market is expected to grow 15 times over the next five years, driven primarily by:

• Increasing Demand: Growing interest in digital assets from institutional investors.
• Regulatory Advancements: Improved regulatory frameworks in various countries.
• DeFi Sector Growth: Expansion of the DeFi sector, simplifying the processes of exchange, collateralization, and trading of tokenized assets.

By 2028–2030, we anticipate a widespread shift of traditional companies adopting tokenized models for capital raising and asset management.

Tokenization as a Tool for Democratizing Investments

One of the most significant impacts of tokenization is the democratization of the investment landscape. Retail investors can now participate in early-stage, high-potential projects, while founders can access capital with fairer valuations and without the stringent requirements of large funds.

Marsbase recognizes this potential and is developing an ecosystem where B2B clients can secure advantageous terms and large deals, while retail investors can engage in solid projects through fractional allocations.

Conclusion

Tokenization is not merely a trend; it represents a fundamental shift in investment mechanisms. It unlocks illiquid assets, providing founders with flexible capital-raising options and investors with access to previously closed opportunities and enhanced liquidity.

Marsbase is proud to be at the forefront of this movement, offering comprehensive tokenization solutions for companies and projects of all sizes. We believe that together, we can fully unlock the market’s potential and enhance the efficiency of the financial system as a whole.

Ready to Learn More?

If you’re looking for turnkey tokenization tools to attract capital or seeking access to the best investment opportunities, contact our team. We will help you integrate modern tools into your strategy and provide access to unique deals.