Working with Token Economies: From Tokenizing Cows to 3D Design Files with CORELEDGER TEOS
Inside Scoop on Token Economies with CoreLedger Teos
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The future is digital with technologies such as blockchain leading the way. However, businesses trying to stay competitive struggle due to the complexity and resources needed in order to build the proper infrastructure. This is where CoreLedger, a blockchain infrastructure provider comes in.
Johannes Schweifer the CEO, gives us a detailed overview of tokens, the tokenization process, token economies and how the CoreLedger Teos Framework can be used for virtually any asset and use case. If you have a business looking to take advantage of blockchain technology, read on to learn how CoreLedger can help you access the best blockchain solutions for your needs.
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Working with Token Economies: From Tokenizing Cows to 3D Design Files with CORELEDGER TEOS
Guest Post By Johannes Schweifer, CEO of CoreLedger
Johannes Schweifer is the CEO of Crypto Valley’s CoreLedger, a blockchain infrastructure provider on a mission to help businesses of all sizes access blockchain technology. Schweifer is the pioneer of a blockchain solution that enables the trade of any asset. He also has a PhD in Distributed Computing and Quantum Chemistry, and was the co-founder of Bitcoin Suisse.
Tokenization, Tokens, and Token Economies
First things first, it’s important to get these three terms straight, as they sound similar but work together very differently. The act of tokenization, as the name suggests, results in tokens. You can tokenize physical goods and assets, digitizing them and representing them on a blockchain, as well as non-tangibles like services. What you then do with those tokens can be described in terms of Token Economies, which refers to the economics of goods and services that have been tokenized.
Creating digital tokens on a blockchain that represent a digital or physical asset has, thanks to more sophisticated and easy-to-use tools, become possible for almost anyone. Non-fungible tokens (NFTs) and the current digital art craze are one of the most well-known and popular use cases of this technology today.
But aside from the NFT boom, tokenization offers some pretty incredible new opportunities for tokenized physical assets and commodities that can effectively break down physical barriers to trade. For assets like gold and other precious metals, tokenization has enabled the transfer of ownership or trade of an asset without requiring the physical transportation of the asset across borders.
Other popular use cases have included real estate and land registry on blockchain; and because tokens can be fractionalized, investors are able to access the entire asset, or a fraction of the asset which has been divided into tradable shares.
In the sustainability and green market space, CO2 certificates can be tracked and then traded, or sustainability projects can be discovered on blockchain marketplaces for investment.
Vouchers, loyalty and reward points, and other customer incentive programs are another popular use case, and many companies are already investigating revenue share models, tokenized equity, structured investment products, as well as the tokenization of seed and growth investments.
Applications for tokenization are being explored well beyond these initial use cases, and now businesses of any size can access the benefits without needing to fork out hundreds of thousands of dollars to develop their own blockchain infrastructure, thanks to CoreLedger’s proprietary technology, CORELEDGER TEOS.
CoreLedger and their partners are investigating and executing use cases in a broad range of industries, such as tokenizing cattle in South America to increase national and international investment, and contributing to an IP protection platform to enable the secure sending of 3D printing files across Europe via tokens that represent the rights to control and protect the manufacture of the design files.
But what exactly do you need for these use cases to work? Let’s take a deep dive first into Token Economies themselves, and then look at a platform designed to help businesses work with tokens.
The Token Economy Essentials
The easiest way to explain the benefits and uses of tokenization and tokens is to start with the token economy essentials. The term ‘token economy’ refers to the economics of goods and services that have been tokenized, including the act of creating tokens via tokenization. Thanks to the programmatic and immutable nature or blockchain, these economies can function without the need for intermediaries and third parties; with the right tool, you can control every step from minting the token, to fractionalising it, to ultimately trading it. Tokenization takes physical assets, digitizes them, proves their ownership, and allows you to trade them. The same principle also applies to tokenizing assets already in digital form, or non-tangibles like services.
CoreLedger’s Token Economy Operating System is a holistic solution for any business interested in exploring use cases for blockchain technology. It makes the creation and administration of digital assets secure and straightforward, allowing the assets to be easily converted and exchanged globally. The four essential tools that make a token economy function are: Documentation, Tokenization, Governance, and Trading. Let’s take a look at what each one does.
The first step in creating a token is documentation This is how you record all the information about an asset and anchor its proof-of-authenticity on the blockchain. The timestamp, author signature and fingerprint (hash) immutably prove who documented what and when, meaning the data is available to everyone but cannot be altered by another party. Documentation is the cornerstone of Bitcoin transactions and works for any case where records and data need to be forge-proof and revision-proof.
The unique fingerprint allows you to prove at any time that you hold the original, unaltered file just by verifying the fingerprint again. The timestamp allows you to track the exact moment of block identification, making altering the origin of an asset nearly impossible. In the real world, we see how easily photos and data can be photoshopped or how signatures can be altered in the real world; but this is simply not possible with documented data on blockchain.
The second process, tokenization, is where you to add a quantifiable substance to a documented digital asset. It involves a real-life unit of measure such as kilograms, hours, square meters, ounces, or using pieces or counts. However, it could also represent a work of art, a service, or intellectual property rights; for example the token can quantify the number or duration of access. A use case for this could include digital rights to access a film, with one token representing one view.
Tokens can also be distinguished between fungible or non-fungible. The blockchain becomes the bookkeeper, recording token ownership while enabling tokens to be safely and reliably transferred from one owner to another.
Governance binds the actions to conditions that cannot be broken. These are executed with smart contracts on the blockchain that outline the rules and regulations of each token. Agreements between parties in the real world can be broken, which happens quite often. In order to ensure that these agreements are carried out, there are intermediaries and legal structures in place. But on programmable blockchains, smart contracts will only execute transfers or actions between two participants depending on whether the criteria have been fulfilled. This lack of middlemen is why blockchain is sometimes called trustless.
The final token economy essential is trading, or value conversion. Blockchain technology enables businesses to create “claims” that represent real values with or without backing, allowing you to digitize all assets in the same form, shape and realm. And while trading one physical asset with another can be costly due to logistics, businesses can exchange the claims on a blockchain This exchange also prevents double-spending of the assets, as smart contracts ensure that transactions cannot happen unless both parties fulfil their part of the bargain. Trading digital assets as opposed to physical ones also means you can take advantage of algorithmic market making, such as CoreLedger’s TokenWARP technology, to help find ideal trade pairs for all the parties involved.
Businesses can easily purchase tokens or redeem the asset backing behind the tokens and then trade them on a decentralized market using CORELEDGER TEOS.
What can you do with Token Economies?
In order to truly benefit from tokens you need a platform to manage these four token economy essentials, as well as your tokens once they’ve been created. CoreLedger’s Token Economy Operating System, or CORELEDGER TEOS, is a convenient and easy to use platform with a suite of tools to help you do just that. Here’s how some other projects are putting it to good use.
In Argentina, farmers have been grappling with a plummeting peso amidst pandemic uncertainties, with net currency reserves near zero and inflation reaching above 50%. By tokenizing agricultural assets, farmers can seek a hedge against inflation and access liquidity via certified financial titles accessible by national and international investors.
More than 40% of soybean oil and soy-meal production comes from Argentina, making it critical for farmers to liquefy their real, physical assets. In Argentina, farmers can redeem and trade tokenized titles with any other tokenized asset on the Abakus platform, meaning that soybeans could act as an asset-backed currency and be traded for cattle, corn, or a digital peso.
This has opened the doorway for more opportunities as tokenized real assets, not unstable currencies, become a form of stablecoin in a digital barter network where tokenized goods and services can be traded against each other thanks to CoreLedger’s TokenWARP technology.
In Bolivia, a cattle ranch is using CORELEDGER TEOS to open up to national and international investors via a tokenized Revenue Participation investment model. Each Finka token represents a percentage of the revenue from the La Padera ranch, a 3200-hectare organic cattle farm that’s been cash positive for decades. Cattle ranching thus becomes a low-risk, non-volatile activity to develop a financial instrument supported by blockchain, which has become a roadmap for other industries to create financial instruments for applications in other areas of the economy. The revenue participation model works with any business that generates revenue.
3D printing and IP Security:
In Europe, CoreLedger’s platform has been used to develop an industry-first blockchain solution in partnership with IP protection provider, Ambitorio, and European Inter-Regional development project Interreg Alpenrhein-Bodensee-Hochrhein, that will enable cryptographic protection of 3D printing files. This provides an opportunity to help European countries stimulate local economies by creating new manufacturing opportunities that are kept local, instead of requiring cross-border trade.
Rather than producing products centrally in a few places around the world and then transporting them worldwide, the growing capabilities of 3D printing, also known as additive manufacturing, allows companies to securely transfer manufacturing information to any location with an appropriate machine via the internet. Thus, products can be quickly produced directly in the target market and closer to the end-user.
A great advantage of this is helping reduce logistic expenses and emissions, creating more sustainable local manufacturing solutions. Products can be manufactured as required instead of in large stock amounts, meaning countries and businesses can save on capital and storage costs.
One of the biggest challenges to the additive manufacturing of products is that, while files are able to be easily transferred, they can also be easily duplicated. But if the files are tokenized, with the rules for access secured on a blockchain, then their use can be effectively controlled by the rights holder. With the ability to trade tokens, there is also ample opportunity for a decentralized market of 3D models, where designers can create new income streams by selling 3D prints peer-to-peer.
How the CORELEDGER TEOS enables instantaneous value-conversion
Whether the business use case involves cows or 3D printing, the CORELEDGER TEOS system makes the creation and administration of digital assets simple and secure, allowing them to be easily converted and exchanged globally.
This is thanks to TokenWARP technology, a patent-pending feature of CORELEDGER TEOS and technological solution to increase liquidity in a token economy by enabling instantaneous value-conversion. It facilitates a peer-to-peer (P2P) exchange of contracts that allows parties to trade tokens of different values. The technology can chain together any number of swaps and payments between parties, picking the optimal path through thousands of available trades based on the criteria you’ve set.
Tokens can represent any value, can be traded for anything on-chain, and are routed in much the same way that the internet routes data. By being traded atomically, the conversions of assets can be instantaneously linked together into one single on-chain transaction. In essence, anything becomes transactable for anything else.
Corn, cattle, grain, USD, and medical supplies are represented as tokens above and demonstrate the on-chain trading mechanism that eliminates the need for centralized third-party entities when executing trades.
If connections on-chain fail, the value of the token traffic is re-routed, with all data lodged. Either the transaction occurs, or both transactions fail.
One of the benefits of TokenWARP tech is the location swap; tokens with the same value/properties can be swapped in different locations simply by trading ownership, rather than moving the physical goods.
How to use CORELEDGER TEOS
CoreLedger’s Token Economy Operating System consists of three white label products that enable users to access all of the token economy essentials outlined above, as well as an API to develop any additional functionality that enterprise customers might need. Let’s take a look at how each white label product helps you work with a token economy.
Whitelabel Marketplace: Asset Overview
The White Label Marketplace is the central tool in CoreLedger’s ecosystem, giving you access to all the token economy essentials. This graphical, role-based interface allows users to:
Create and document digital assets;
Issue, destroy, and transfer units;
Offer units on the market;
Search for TokenWARP trades and convert units;
Create and administrate controllers (blockchain-based rule sets for governance of an asset);
Administrate users, rights, and roles.
The WLM can be used as either a back-end administrative interface for enterprise customers, or as a front-end interface for end-users. It's a flexible, powerful tool and how you use it depends entirely on your use-case.
White Label Portal Overview
The White Label Portal acts as a bridge between real and tokenized assets. First, you can purchase tokens, for example representing tokenized real assets, via a simple webshop interface and pay for these tokens with a variety of crypto or fiat payment methods. There is also the option to leave the tokenized world and reclaim real assets. This is not limited to selling tokens and receiving the money; you can use the portal to convert an asset-backed token, which is basically an IOU, into the underlying physical asset.
The Portal is the next step of token management after you have created your tokens. With it you can:
Sell tokens to your customers (ICO, STO, ITO, etc);
Allow your customers to redeem values (e.g. exchange tokens into Fiat currency);
Create a gateway to reclaim values from storage certificates or vouchers;
Make an entry point for KYC;
Build a decentralized marketplace, complete with payment features for receiving and sending;
Build a Point-of-Sale solution;
Create a marketplace for trade or project finance.
Create a platform for cross-border finance and transfer-pricing
White Label App
The White Label App is a multipurpose tool designed specifically for the end users of CORELEDGER TEOS business products. In essence, it helps connect your customers to the token economy solution you’ve built with our products.
You can also set the Assets that your users will have at their disposal and are available on the marketplace for trading. In addition, it can create payment requests, import assets from physical Token Cards or be used to create and power digital communities, which transact in any token of their choice. If your company is issuing a token or creating a rewards program, for example, this white label app would be how your customers access and use the system.
End-user device for a custom decentralized marketplace or exchange.
Wallet functionality to store and view assets;
Point-of-Sale functionality to create payment requests or invoices;
Use for Barter trading: market functionality to buy and sell tokens on the device through supplies and TokenWARPS on a decentralized marketplace;
QR code scanner to import from physical Token Cards, read accounts, verify account addresses and more.
Companies need to digitize because the future is digital, and businesses must apply new technologies, like blockchain, to stay competitive. But blockchain technology is complex and requires a lot of know-how and resources to build up a workable, reliable infrastructure. It’s also hard to develop, because any entry on a live blockchain is permanent. Blockchain know-how is also scarce and expensive, raising the barrier of entry for startups and SMEs.
CORELEDGER TEOS was built as a framework that can be used for virtually any asset and use case, with a core mission to ensure businesses of any size can access the benefits of blockchain. Blockchain adoption failure rates for businesses currently reach up to 92%, mostly because many businesses are forced to build infrastructure from scratch or don’t have the flexibility to test and experience their use cases before they go to market. CoreLedger’s infrastructure allows businesses to save on these expensive development and testing costs with ready-to-use white label products and a powerful API.
There are hundreds of use cases where blockchain can improve efficiencies, reduce costs, save time, and introduce trust and credibility for businesses. and they need the ability to trial, test, and sometimes fail in a safe and affordable environment. With blockchain development costs priced up to USD$1M with audits, maintenance, and execution, it’s critical to ensure that businesses have access to token economy tools like CORELEDGER TEOS to take advantage of the lucrative and cost-saving opportunities within the burgeoning space of blockchain technology.
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⚠️ DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. At certain points throughout this post, we might get commission for promoting certain projects, if this is the case we will always make sure it is clear. We are strictly an educational content platform, nothing we offer is financial advice. We are not professionals or licensed advisors.
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