Amazing Blocks: Tokenizing Everything

Amazing Blocks is the first company to tokenize equity according to the Liechtenstein Token Act. With the first tokenized shares of a legal entity in Liechtenstein, history was written on September 21, 2020 when equity tokens for registered shares were generated. 

We have asked Nicolas Weber, The Head of Business Development at Amazing Blocks to explain in more detail how it works and what are the benefits of tokenization.  

19th April 2021  

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Patrycja Maksymowicz: Asset Tokenization is the process of converting real assets into digital ones on blockchain, the process enables fractional ownership of assets. Amazing Blocks is the first company to tokenize equity according to the Liechtenstein Token Act and now offers digital legal entities as a service. 

What’s the idea behind the Amazing Blocks?

Nicolas Weber: Amazing Blocks always strives to be a pioneer in legally compliant blockchain applications. We were for instance the first to tokenize equity in line with the Liechtenstein Blockchain Act as well as being founded solely with crypto assets as an initial capital contribution.

While blockchain may still be hard to understand and use for some, our vision is to build tools - basically the shovel to the gold rush - for tokenization projects of any kind. This means private, public sale and any use case thus literally tokenizing everything. In the emerging token economy, shares are tokenized, alternative assets such as art or machines, IP, collectibles, fiat and much more. We aim to offer knowledge and holistic, intuitive, white-labelled software for the entire life cycle.

Patrycja: Amazing Blocks was launched during the pandemic, what’s the journey so far? It seems like you’ve done a lot in a very short span of time and although it’s been a short but impactful one. 

Nicolas: Thank you for the kind feedback! The pandemic has posed many challenges on all levels of society. The blockchain space however has frankly just kept on flourishing.

Through the decentralized features and digital focus, business was and is able to continue. That is something which can be described as fortunate, does have a sour appetite as so many people are suffering these days. Actually, there have been many efforts within the space that were aimed to cope with the COVID-19 imposed hurdles such as a hackathon organized by amongst other AI - Blockchain project SingularityNET. While crypto prices have been skyrocketing, the tokenization ecosystem has also grown significantly.

The first necessity is to educate people and hence seamlessly onboard them to the token economy. Consequently, we focused a lot on providing content like knowledge articles, podcast, live events etc. Here the goal is to have an impact in terms of teaching people about the perks of DLT.  

Patrycja: I often get the sense of fear, especially from more traditional finance professionals or independent business owners when they hear about crypto. Adopting blockchain seems to be the future of finance, law and tech. Tokenization of shares gives your business transparency and is compliant with all the laws and regulations. Can you tell us more about the benefits for businesses? Why do you think it’s becoming more and more common? 

Nicolas: Tokenization allows the user to efficiently apply blockchain paired with cryptographic tokens to financial instruments. With the increasing adoption of blockchain throughout industries, it becomes evident that benefits like P2P, instant settlement, transparency, cross-border transfers, frictionless and more are too strong to ignore. Now we have the opportunity to decentralize inaccessible, illiquid assets and morph them into 24/7 traded and securitized tokens. The most feasible application is the primary market, where fundraising can be conducted with a few clicks on an intuitive UI. The goal is to have a product people can use without having to know what blockchain is - similar to the internet - we can however leverage the obvious advantages.  

Patrycja: Some companies we are working with are familiar with blockchain, still many aren’t. How is tokenization done? What is the process? 

Nicolas: Generally speaking, tokenization is the creation of cryptographic tokens on a DLT-based system (e.g. blockchain). Now leveraging a peer-to-peer network allowing decentralized value exchange - mostly in the form of data - tokens with a variety of functions can exist in the built ecosystem of the token economy. It can be for instance governance tokens in DAOs, stable coins backed by currency such as the Dollar, there can be basket tokens which basically are indices of tokenized assets or security tokens. The latter is what we at Amazing Blocks focus on: digitizing assets by applying tokenization. When you mint a token - the correct term for creating - you trigger at least one smart contract that subsequently generates the tokens. The tokens are held in a wallet that is either custodial or non-custodial, basically, like a digitized portemonnaie that only the owner controls. Here the public key is the address to which you can transfer tokens, while the private key (and often seed phrase) is in the best case only known by the actual owner of said wallet. Now held in a wallet, which is transparently viewable - not identifiable - on block trackers such as Etherscan, the token is integrated into the token economy.

Patrycja: What type of companies can benefit from Amazing Blocks? 

Are there any restrictions or limitations as to the type or size of companies? 

Nicolas: Our slogan is “Tokenizing Everything” and we aim to live by that standard. From a consulting and tech perspective, we can adjust to any tokenization use case. Our software can be fully customized, white-labelled and utilized for any use case. We have specified solutions for the primary market with aspects such as a Blockchain-based digital shareholder register, but can also provide holistic platforms which allow the creation of decentralized marketplaces. Hence to us, there are no restrictions as to whom we may work with, happy to support anybody joining this auspicious industry! 

Patrycja: What about companies seeking investment? What are the benefits for those seeking investment and what are the benefits or the opportunities for investors? 

Nicolas: Issuer and investor alike can greatly benefit from applying tokenization. First of all, it removes friction through cost and time-consuming intermediaries. Secondly, you now have instant access to a global community of investors - if necessary steps from the legal side are taken - that can be leveraged. Additionally, anybody has a fungible marketplace to exchange tokenized value of any kind. Imagine exchanging fractions of a van Gogh with some Bitcoin, then selling it for the newly issued Coinbase stock. All that within seconds or less if wanted. 

Patrycja: Let’s now look at companies such as Open Solutions Global, as you know we are a growth consultancy firm with no tangible assets but IP,  how can OSG and similar firms to ours benefit from tokenization? 

Nicolas: There are 3 approaches to how you can benefit from tokenization:

1) Become experts on tokenization by bridging the gap between CeFi and DeFi with your astonishing network.

2) Any company can benefit from tokenizing its own equity or issuing debt tokens for enhanced means of fundraising.

3) Actually tokenizing IP is a very auspicious application for tokenization. IP becomes a tangible asset with it and also much more accessible, transparent and decentralized. 

Patrycja:  Saying we can tokenize everything is not an overstatement, but to narrow that down to some examples, real estate, art, assets… What are the most common and the so far most unusual? Are there any other sectors where tokenization is particularly booming right now? 

Nicolas: The low hanging fruit in tokenization is right now for sure private equity. It can be established smoothly and significantly benefits a highly illiquid and friction-infused market that now becomes far more accessible globally. Another popular use case for tokenization - something we are sometimes forgetting are cryptocurrencies in on-chain ecosystems as well as payment tokens - that is for instance stablecoins like USDT.

Real estate, a more than 200 trillion dollar market, is also one of the most common use cases for tokenization and will prevail to be one of the frontrunning industries. 

Patrycja: I can hear people say blockchain is the ‘future’, I think what many are not realising it actually is quickly becoming ‘now’, and companies sticking to well-known traditional models only, will soon be lagging behind. 

Looking into the future, what does it hold for Amazing Blocks? What are the plans? 

Nicolas: We have a lot of points on our agenda as we always strive to keep pace with the fast-moving blockchain space.

One goal on our agenda is to migrate our software from Ethereum also to other chains which will allow us to have more flexibility and expand our ecosystem. We also are working on expanding our software features. Soon we will be able to speak publicly about it as we are currently developing core enhancements. Additionally, we are deep diving into entity governance on chain applications with legal compliance. Furthermore, offering our software in more jurisdictions that are implementing progressive blockchain laws is on our imminent agenda. Moreover, bridging CeFi with DeFi as well as having a liquid secondary market are core goals we continue to pursue.

All in all, we want to progress in line with fast-moving tech and be adaptable to laws and regulations. I invite everyone to join us on this path to a decentralized token economy.

Patrycja: I look forward to hearing about your team reaching these milestones soon.  

Thank you, Nicolas. 

While blockchain may still be hard to understand and use for some, our vision is to build tools - basically the shovel to the gold rush - for tokenization projects of any kind.

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