Ever wondered how real assets can exist on the blockchain? This article explains the inner workings of asset tokenization in DeFi, its advantages, and the different token types driving its growth.
When most people think about blockchain, their focus is usually on cryptocurrencies like Bitcoin, Ethereum, or XRP. However, the real breakthrough is blockchain’s core technology, which is now being implemented across multiple sectors—including healthcare, logistics, and especially decentralized finance (DeFi).
DeFi is revolutionizing how we think about financial access. One of its standout features is the ability to digitally tokenize real-world assets—allowing people to own and trade things like real estate, art, or commodities on the blockchain.
In this guide, we explore what asset tokenization means in the DeFi space, how the process unfolds, and what kinds of tokens are most commonly used.
Defining Asset Tokenization in DeFi
In the world of DeFi, asset tokenization is the process of taking physical or financial assets and turning them into digital tokens on a blockchain. This could include stocks, land, luxury items, or even intellectual property.
What’s powerful about this system is how it opens access to ownership and liquidity for assets that were once hard to buy, sell, or divide. A great example is Maclear’s 8lends platform, which allows businesses to tokenize collateral and obtain loans via crowdfunding.
Steps to Tokenize an Asset in DeFi
Step 1: Select an Asset
You first identify the asset to be tokenized—this could be property, equities, or even fiat. Legal compliance and valuation steps are necessary here.
Step 2: Assess and Secure the Asset’s Value
The asset’s market value must be independently verified. If a real estate property is worth $5 million, that figure determines how many tokens are minted. Custodians or blockchain verifiers ensure trust in the process.
Step 3: Smart Contract Development
Smart contracts—automated code run on a blockchain—are written to issue and manage the tokens. These programs enable fractional ownership and automate compliance and distribution.
Step 4: Launch the Tokens to the Market
Using an Initial Token Offering (ITO), the tokens are sold to investors. Each buyer receives a fraction of the asset in the form of digital tokens.
Step 5: Utilize Tokens Across DeFi Platforms
After purchasing, tokens can be held, exchanged, or used across lending platforms and other DeFi apps—making them truly versatile.
Why Tokenization is Disrupting Traditional Finance
Lower Costs
DeFi removes costly intermediaries like banks and brokers, reducing fees and streamlining transactions.
Fractional Investing
Tokenization allows investors to own parts of valuable assets—like buying a piece of a skyscraper instead of the whole thing.
Global, Instant Access
Trading tokenized assets can happen in real-time from anywhere, giving investors unmatched speed and flexibility.
Immutable Blockchain Security
Every transaction is logged on a secure, decentralized ledger—making it tamper-resistant and transparent.
Popular Token Types in DeFi
Utility Tokens
These grant access to specific features or services on DeFi platforms—like gas fees or voting rights.
Stablecoins
These are pegged to traditional assets (e.g., USD or gold) and offer price stability for everyday DeFi transactions.
Security Tokens
Represent legal claims to ownership in real-world assets, such as tokenized shares or revenue-generating property.
NFTs (Non-Fungible Tokens)
Best for unique items like digital collectibles, artwork, or gaming items. NFTs are non-interchangeable and verifiable.
Conclusion
Asset tokenization makes DeFi more inclusive, accessible, and efficient. As companies like Maclear continue to push platforms like 8lends, we’re seeing a future where blockchain enables secure and scalable financial innovation for everyone.
