Tokenization’s Next Test Is Capturing the Revenue

Tokenization is moving beyond a technology discussion and toward a business question: if real-world assets come onto blockchains, who actually earns money from the activity? Research firm Citrini sees the trend as a potential turning point for the digital-asset industry, but says the investment case is not as simple as identifying the fastest-growing use of the technology.

A clearer role for blockchains

The firm’s view is that real-world assets could give blockchains a more defined function in finance. Instead of existing mainly as venues for native digital assets, these networks could support the representation and movement of assets tied to the traditional economy. That possibility places tokenization at the center of the debate over how blockchain infrastructure can create practical value.

For the sector, the distinction matters. A successful tokenization market would involve more than issuing digital representations of assets. It would also raise questions about the infrastructure used to create, record, transfer and manage those tokens. Each layer could involve different companies, networks or protocols, making the eventual distribution of revenue difficult to assess from adoption figures alone.

Adoption does not settle the investment question

Citrini’s argument leaves investors with a more difficult task than simply deciding whether tokenization will grow. They must determine which participants capture the economics if the market expands. That means separating the broader promise of real-world assets from the business models of the firms and blockchain projects supporting them.

The question also applies across several parts of the digital-asset landscape. Companies may provide services around tokenized assets, networks may supply the underlying infrastructure, and protocols may facilitate activity built on top of that infrastructure. Growth in the overall theme would not, by itself, show that every participant benefits equally.

Why the distinction matters

Tokenization therefore presents two related but separate issues: whether blockchains can establish a durable role in finance, and which businesses can convert that role into revenue. Citrini’s analysis emphasizes the first as a potentially important development while highlighting the second as the harder problem for investors to solve.

Source: Coindesk