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0 pointsspir3mo ago0 comments

1. Stablecoins

2. Tokenizing all assets (equities, commodities, real estate, etc.)

3. Being able to use those stablecoins/tokenized assets in DeFi protocols that are more automated, more impartial, and less extractive than corresponding traditional finance systems. Including lending and marketplaces to buy/sell. Many industries will see parts of their back offices go onchain. Tokenized real estate + onchain swapping = onchain real estate markets. Stablecoins + onchain swapping = onchain forex markets.

4. All of these being inherently global, so anyone in the world with a mobile phone can access these assets and the onchain financial system.

5. All of these being size-agnostic. The same assets and technologies work with a 5 cent buy of tokenized TSLA stock just as they do with a 50 million buy.

6. All of these capabilities enjoy instant settlement. The act of trading the tokenized asset also settles the trade. There is no more T+1 settlement risk or delay. This reduces risk and improves capital efficiency.

7. Decentralized public chains, especially Ethereum, offer new kinds of credible commitments that are strong enough to bind corporations and governments because the agreements are automated by the highly decentralized chain. Centralized chains (almost all chains) can't do this because they are too easy to rewrite history if governments apply pressure. When using Ethereum, instead of relying on a counterparty to keep their word and then suing them if they don't, parts of that agreement can become automated by the chain, reducing risk of breach of contract and cost of compliance. Maximum decentralization greatly reduces overall risk, which is very valuable at global scale.

8. Generally increased permissionless innovation, stronger property rights, and freer markets. Anybody can use onchain or build onchain, there's no gatekeepers.

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Nextgrid3mo ago

> Tokenizing all assets (equities, commodities, real estate, etc.)

How does that work?

The blockchain can only enforce its desired state on the blockchain itself. It cannot affect the real world unless you delegate said effects to a trusted party... which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database.

How do you reconcile the ability to lose a private key with real-world assets? In the "fiat" system we rely on courts to be the ultimate arbiters in such cases and it works well enough. In this system, what should happen if someone owning a tokenized real estate asset loses the corresponding private key?

> The act of trading the tokenized asset also settles the trade

This again only works on the blockchain. When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable (you "buy" some real-estate on the blockchain, but the government having jurisdiction over the real-world location contests your ownership claim and people in uniform with guns prevent you from entering into said real estate).

spirOP3mo ago

> which defeats the whole point of a decentralized, trust-less blockchain, and you could let that trusted party just run a centralized database

A centralized token (like USDC) being held in a trustless wallet is much much better and more useful than the traditional financial system.

For example, USDC in my wallet can be lent out in any onchain lending venue I pick and be sent to anybody in the world instantly.

> lose a private key with real-world assets

You're right, private key security is super important. The practical solution here is that there will be many different kinds of wallets with different trust assumptions and recovery models, and people/corporations will be directed to use the one that's net best for them. Many will be fully or semi custodial.

> When the tokens represent real-world assets the two are not in sync, and there's a risk they may not be reconcilable

Right. The idea here is to have very stringent evaluations of tokenization frameworks, to figure out which real-world asset tokens are actually quality bearer assets (from both a legal and technical standpoint) and which are not. An early example of the work here is BlueChip's stablecoin ratings https://bluechip.org/en

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