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Linking Blockchain to the Real World: Why Funds are Investing Millions

Cryptocurrency Jun 06, 2022 04:00AM ET
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© Reuters Linking Blockchain to the Real World: Why Funds are Investing Millions

With globalization, there is so much on the table; it can be overwhelming. Yes, the world is increasingly becoming a village. However, the steel wall separating the digital and the physical world can still be felt, especially in investment. If anything, it can be challenging for ordinary folks to confidently invest in physical assets without roadblocks. For one, investment costs can be steep. Second, most retail investors are barred from investment, even if they intended to. Governments and regulators have ways to ensure the status quo and keep certain assets exclusive only available to the wealthy. Ambitious retailers are quickly rebuffed with accreditation demands and other stringent requirements to keep them hunched on other matters. The good news is that this is about to change.

This Shift from Web2 to Blockchain and NFTs
The shift from digital web2 interactions to web3 and blockchain came with beneficial high tides. Thus far, the use of blockchain is already slashing down costs in remittance and giving retailers a new way of investing and making decent returns from their crypto activities. While the crypto market is relatively volatile, this should be expected since it is barely 13 years and is mainly retail-driven. For context, Facebook (NASDAQ:FB), arguably the world's largest social media platform, has been around for much longer than Bitcoin.

The advancement in crypto technology gave rise to smart contracting—a revolutionary innovation. It is possible to tokenize (and digitize) physical assets through smart contracts. The release of non-fungible tokens (NFTs) standards in early 2018 on Ethereum quickly cemented tokenization's significance, opening up new opportunities.

NFTs and Fractional Ownership
NFTs are nothing more than a conduit, a bridge that links the physical and digital worlds. For the first time, the technology allows tangible assets in the physical world to be tokenized into NFTs using smart contracts with on-chain provenance. This unique digitization system breaks down investment barriers. It has been a breakthrough technology with diverse applications ranging from gaming to art. Moreover, NFTs enable retailers to own a fraction of, for example, a multi-dollar art piece. These advantages are what Sabai leverages to create a cyclic, blockchain-based ecosystem seamlessly linking the physical and digital worlds.

The Sabai Ecoverse is a functional network that combines exciting blockchain technologies and video gaming with the real physical world using joint integration tools. Its ecosystem comprises a tokenization portal, a vibrant marketplace, and a real estate management system popularized using a play-to-earn gaming model. Because of tokenization capability and the availability of a real estate management solution, Sabai provides easier, limitless, transparent, and scalable access to prime real estate. Investor access and participation costs are also lower since tokenization enables fractional ownership.

The deployment from a public blockchain enables Sabai to resolve challenges associated with acquiring valuable real estate property in foreign countries. Using smart contracts and the SABAI token, they effectively reduce entry barriers. In this manner, retail investors can efficiently channel funds and own high-potential real estate projects in any part of the world. Additionally, Sabai has a main mobile game where users can build a virtual resort business, learn, and earn.

Crypto Funds Investing Millions to Fast-Track Development
Tokenizing tangible world assets and having them as collateral, especially in DeFi, would have massive benefits on ecosystem stability. Currently, a big part of the multi-billion dollar DeFi industry comprises protocols supporting their high yields using their utilities. The problem is that DeFi is still subject to the whims of volatility typical in the crypto market. As a result, DeFi's high yields, sometimes in the triple digits, can be unsustainable and fundamentally dangerous to DeFi, a sub-sector that's still developing.

For this reason, more platforms are leveraging the power of smart contracts to bridge to the real world with support from crypto-dedicated funds, who have been pouring millions of dollars to accelerate their development. Besides Sabai Ecoverse, Jupiter Exchange realizes this potential. They recently raised $5 million in seed funding to build an alternative asset exchange that uses NFT technology. Jupiter Exchange curates iconic physical objects before tokenizing them. Ordinary investors can confidently own them via a digital marketplace and exchange. Similarly, Naetion, a Danish protocol tokenizing human capital, has raised $150 million from a crypto fund. Its CEO Alexander Rindom-Andersen is adamant that the impact of blockchain on human capital is massive and can create infinite possibilities.

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Linking Blockchain to the Real World: Why Funds are Investing Millions
 

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