July 22, 2022 by Editor's Desk
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After analyzing quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others
After analyzing quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others missed capitalizing on the market.
Let us look at the various tokens offered in Q2 of 2018.
Utility Token: As the name signifies, these tokens create utility for the token owners as these were the tokens of a protocol. They are basically two ways of providing utility to token owners –
- By giving access to network or service feature
- By allowing token holders to actively contribute work to the system
Some tokens are capable of giving both facilities to the holder while a few others don’t provide any utility. Q2 of 2018 saw the capitalization by Utility token. There was a surge of 32% in projects offering utility tokens. The token to raise the highest mean funds was a utility token accounting for approximately $22 million.
Security Token: These tokens are issued on the promises of dividend payment, receipt of company shares, credit tokens, etc. These tokens are subject to federal security regulations and failure to abide results in penalties and even derailment of projects. Security tokens accounted for 4.88% of project shares in the ICO market. The Q2 of 2018 was quite upsetting for security tokens as there was an 8% decrease in projects offering security tokens. The mean fundraised by security tokens was bleak and far less than $5million.
Vote Token: These are the tokens that make the token holder powerful and give them the right to vote and the ability to influence the development of a project. Vote tokens accounted for only 0.27% of the total number of ongoing projects in Q2 of 2018. The share of mean funds raised by vote token was less than $1million.
Also, read –The new age blockchain-powered phone
Service Tokens: Now we are talking about the tokens on which maximum projects tried seeking funds. The service tokens are exchanged in place of the services offered by the project. Though the number of projects offering service tokens decreased by 24% even after that 42.5% of all projects were based on service tokens. The market capitalization of service tokens lags far behind of utility tokens and it grossed the mean funds raised accounted to about $6million only. On the contrary, the maximum number of unsuccessful projects were marked as service tokens. Q2 of 2018 saw more than 150 service token based unsuccessful projects out of total 827 projects initiated in Q2.
Reward Tokens: These are the tokens which are awarded to the contributions of the participants of the network. A total of 0.81% of projects was based upon reward tokens. The performance of Reward tokens was better than service tokens, hybrid tokens and vote tokens. The funds accumulated by reward tokens were more than $6million. The probability of success and failure was equal in reward token meaning almost equal number of projects succeeded and failed in Q2.
Hybrid Tokens: This is one fascinating type of token where the token is given for the services as well as for work performed for the network. 15.04% of total projects were giving Hybrid tokens to network participants in Q2 of 2018. The mean funds raised by Hybrid tokens were about $6million. There were about 60 successful projects which gave Hybrid tokens and the number of failed hybrid token projects were less than 50.
Cryptocurrency: Now we are talking about the buzz of the decade.
Paul Vigna once said, “The whole human populace is now taking charge of the means of production and changing the rules of the game. They’re making their own freaking currencies, for God’s sake!”
This is very evident with the pace of ICOs coming up with their own currency. 1.36% of total projects launched their own cryptocurrency with no additional exceptional features. These new cryptocurrencies raised a mean fund of about $7million. Most of these projects were unable to succeed.
The second quarter of 2018 was evident in the fact that innovations in the Blockchain industry are the new normal. Experts are following the trend and investors are cashing out the opportunities. Entrepreneurs are getting new ways and means to implement their ideas. We expect the same trend to continue in the rest of the year.
FAQs
Asset tokenization explained
Blockchain guarantees that once you buy tokens representing an asset, no single authority can erase or change your ownership — your ownership of that asset remains entirely immutable.
What problem does tokenization solve? ›
Because tokenization will allow for easy and efficient collateralization of many more financial assets, tangible assets and intangible assets. It will also allow for the creation of more assets and significantly expand the asset base of individuals, firms and the world, which can be used in financing transactions.
What are the benefits of tokenization in crypto? ›
Many of the benefits of tokenization come from the fact that tokens run on a blockchain. Now, tokenization purists might say that only a public blockchain can create the transparency needed to facilitate an efficient and democratized financial system.
What is the future of Tokenised assets? ›
Conclusion. Tokenization promises a future where investments are more accessible, markets are more efficient, and asset ownership is more transparent and inclusive.
What is an example of tokenization in crypto? ›
From the financial-services industry, one example would be stablecoins, a type of cryptocurrency pegged to real-world money designed to be fungible, or replicable. Another type of token is an NFT—a nonfungible token, meaning a token that can't be replicated—which is a digital proof of ownership people can buy and sell.
What is the difference between crypto assets and tokens? ›
The main difference is that crypto coins have their own independent blockchain, whereas tokens are built on an existing blockchain. Crypto coins are designed to be used as currency, while crypto tokens are intended to represent an interest in an asset and facilitate transactions on a blockchain.
What is the risk of tokenization? ›
It offers benefits such as increased liquidity, lower transaction costs, and enhanced accessibility to high-value assets. However, like any emerging technology, tokenization also comes with its own set of risks, such as cybersecurity threats, regulatory uncertainty, and potential exacerbation of wealth inequality.
What is the conclusion of tokenization? ›
Conclusion. Tokenization represents a transformative approach that enhances security, streamlines transactions, and digitizes assets across various industries. By leveraging tokenization, organizations can unlock new possibilities and address challenges in today's rapidly evolving digital landscape.
What is the purpose of tokenization? ›
What is the Purpose of Tokenization? The purpose of tokenization is to protect sensitive data while preserving its business utility. This differs from encryption, where sensitive data is modified and stored with methods that do not allow its continued use for business purposes.
Which crypto is best for tokenization? ›
Polymesh (POLYX) is a specialized, public permissioned layer 1 blockchain meticulously designed to enhance the security token industry. Its architecture offers a robust solution for tokenizing securities, expanding the already vast securities market with significant real-world value.
The token owners receive future dividends and interest payments from tokenized assets in the form of cryptocurrency or equivalent fiat money in their wallets. Furthermore, digital token issuers are also responsible for the accounting and taxation of these tokens as well as making financial reports.
What is the difference between tokenization and Bitcoin? ›
Cryptocurrencies are decentralized, have no real-world asset backing, and are often used as a medium of exchange and a store of value. Tokens, on the other hand, are created on top of an existing blockchain and are subject to the control of the company or organization that created them.
What are the benefits of Tokenised assets? ›
Asset tokenization has the potential not only to facilitate more efficient transactions, but also to democratize access to certain kinds of investment opportunities and bring more liquidity to traditionally illiquid asset classes, such as real estate and art.
Which real-world assets are being Tokenised? ›
Precious metals, raw materials, agricultural products, real estate, artwork, and music licensing can all benefit from tokenization. Discover real-world assets on Algorand. Tokenization can provide enhanced transparency, increased liquidity, and improved access to real-world assets.
How do you Tokenize real assets? ›
How To Tokenize An Asset
- Select the Asset to Tokenize. The first step is to identify the asset that you want to tokenize. ...
- Define Token Type. ...
- Choose the Blockchain You Want to Issue Your Tokens On. ...
- Select a Third-Party Auditor To Verify Off-Chain Assets. ...
- Use Chainlink Proof of Reserve To Help Secure the Minting of the Tokens.
Tokenization refers to a process by which a piece of sensitive data, such as a credit card number, is replaced by a surrogate value known as a token.
What is the difference between token and tokenization? ›
A token is a collection of characters that has semantic meaning for a model. Tokenization is the process of converting the words in your prompt into tokens. You can monitor foundation model token usage in a project on the Environments page on the Resource usage tab.
Is tokenization the same as NFT? ›
Unlike NFTs, tokenization refers to a process of securing sensitive data, rather than representing irreplaceable digital assets.
