Opinion by: Alex Svanevik, CEO of Nansen
From more on Tokenization Earlier in the 2017 initial coin that offered boom and early blockchain projects aimed at digitizing assets such as equality and goods, it became a go-to pitch for modernizing the financial.
For many, however, the conversation stops the publication of public equal -equal, placement of existing onchain stocks for fractional ownership and 24/7 trading. While these steps are delicious to have, they are a big cry from a revolution. The fact is that equality is a very good market, which means that the marginals obtained from the deployment of blockchain technology are noticeably small.
This means that the main change lies in the markets and classes where the efficiency is still deeply emerged. Private markets remain less transparent, more expensive to access and off-limitations especially in more than 80% of investors. In order to have an actual financial influence, we need to re -access access to the capital itself. Privacy with private equity has the potential to reproduce capital formation, not only will it, unlocking a massive new level of financial integration.
Where are customers’ yachts?
So far System. When a company goes public, venture capitalists and fence funds swallow most of the pie.
Public markets are not always the late-game arena they are now. IPOD companies earlier in a generation ago, which allowed retail investors to ride decades of growth. Amazon went public for a $ 438-million appreciation, while now giants remain private until they cost $ 50 billion. Over the past 20 years, capital development has moved on to the flow, and companies remain private longer; Stripe, Spacex and Openai are now worth ten -ten -billion -billion without listed. Meanwhile, accreditation rules limit participation in private markets to those with $ 1-million net worth or high income.
Related: Private companies line up to join Robinhood’s tokenized Equity Platform: CEO: CEO
This trend is not limited to the Silicon Valley. Companies have increased capital throughout Europe, Asia and the Gulf through private placements, funds of sovereignty and family offices, not preliminary public offerings (IPO).
The result is a global freeze of ordinary investors from the most dynamic parts of the economy.
Tokenization has the potential to break this cycle, not only for investors but for the companies themselves. Instead of relying on a limited pool of adventure funds or high -value individuals, the placement of private shares onchain will allow companies to raise capital from a wider global audience.
By representing digital ownership and enabling programmable transfers, blockchain infrastructure makes it possible to safely fractionalize, trade and adjust these possessions without the conflict of traditional mediators. This means lowering the cost and complexity of fundraising while opening the door for the day -to -day investors to participate in their growth. It will also provide more liquidity to the first employees and supporters by making the sale of a portion of their shares more easily without waiting for a full release, such as an IPO.
Without it, people can spend many years developing something significant but remain locked in unchanged equity – a problem that will finally solve tokenization.
Carefully at risk or rewarding a reward
By the end of 2025, private markets represent an expected $ 15-trillion-walled-off opportunity, the dwarfing public equities’ potential growth. However most people cannot participate; Retail investors make up 62% of US households and systematically excluded accreditation laws and disclosure requirements designed in the 1930s. Enabling companies to tokenize shares before $ 300 million in revenues will provide millions of people to access stage change companies with history that has been the domain of VCs and fence funds. The risks need to be identified, but they should not be overstated.
One of the most continuing objections is that tokenization can expose retail investors to risks that they may not fully understand or afford and the private equity is too bad, speculation and a change of mind. But it overlooks what’s going on in public markets. If a 22 -year -old can invest in meme stocks or Crypto trade options, why can’t they put $ 500 at an early stage of AI starting they believe, if there is proper disclosure and administration? The real issue is the lack of financial education, which continues our school systems and leaves day -to -day investors without being ready to navigate any market, public or private.
Tokenization does not mean throwing care. The more transparency results in better outcomes, and the blockchain technology offers. The question is: Whose interests are the current system that protects? There is a central ground between locking small investors and allowing them to be safely accessible, and this is certainly what tokenization can do. This is not just a 10x improvement; This is a 100x unlocking for financial integration, which gives the day -to -day people back to the companies they believe.
Accessing is the ultimate asset
The tokenizing private equity can re -write the policies of participating, opening a massive new addressable market for companies and breaking into a system where only accredited investors, defined by unjust wealth thresholds, are trusted to take risks. It also creates a two-way unlock: startups can tap new sources of global capital, and investors around the world can participate in economic growth from one day. For capital markets in emerging economies, where the IPO infrastructure is thin or absent, there is no sign that private equity can be completely jumping by legacy structures.
Yes, the stakes are high, but it may be one of the largest democratizations of creating wealth in history. The alternative maintains the development of capital locked in an expensive, exclusive system that limits change and participation. Tokenization not only speeds up transactions; It returns who will participate, transferring the center of gravity from a number of gatekeepers to a global network of contributors. That shift will not only change how companies are funded but are shaping the economy.
We don’t need faster trains on the old tracks – we need completely new metals. The tokenized private equity can put them in and can determine if the next generation builds a wealth or watches others doing it from the outside.
Opinion City: Alex Svanevik, CEO of Nansen.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
