How is the corona crisis affecting you and your professional activities/company?
The markets in the blockchain space have been low and cautious since the end of 2018, so this hasn’t changed yet. However, the interest in Virtual Reality and digitalisation has increased massively. This is actually a perfect fit for the LUKSO project that I have been working on for more than a year.
LUKSO aims to be the EVM (Ethereum Virtual Machine) blockchain for the digital lifestyle space. This means being a platform for the digital you, a platform for the emerging trends like virtual fashion, cross-game characters, and virtual reality. But also community governance through tokens, new forms of brands and engagement. The blockchain use cases and economy we see coming are massive, and the push for virtualisation couldn’t be better timed.
Yet, when it comes to daily life interactions, we do hope that we can all get back to normal soon. People dying is tragic and can hopefully be prevented soon.
What is your analysis of how the crisis may impact the emerging industry of security tokens and asset tokenisation in the short and long term?
Security tokens always had a hard time, as the regulatory inflexibility inhibited a thriving market so far. There are almost no exchanges where real security tokens are traded, and the industry is in its infancy with missing standards and platforms. Though much work is still done in the background that will hopefully soon see the light of day and this industry can actually become a thriving one.
On the asset tokenisation front, on the other hand, we will see a lot more activity, as the blockchain-based economies will kick off. With LUKSO, we see a bright future for all things virtual, but also physical assets like luxury articles and new kinds of collectables. Human creativity will create a plethora of new markets that are hard to imagine today.
Just for clarification – according to you, what are the differences between security tokens and asset tokenization?
For me, security tokens are tokens that fall under security regulation and represent traditional assets like equity, stocks, financial products of the old world (not DeFi), while asset tokenization means all kind of asset, like physical products or digital products. One obvious case is digital certificates for luxury handbags. Those aren’t securities they are assets, that one can own by “tokenizing” them (even though I dislike the work token here). We make them ownable and can attach all kinds of benefits and services around them, none of which have to do with security regulation. On the other hand, the same is true for purely virtual assets, like digital fashion items or game assets.
Does the crisis mean a setback for the development of the industry?
As blockchain is inherently digital, I would say it is actually a thriver for this industry.
Has it become significantly more challenging to raise investments for industry development?
Yes, people are cautious, even more than in 2019, yet it is probably the best time to raise money if a market is on the bottom. While most projects that raised money in the hype cycle of 2017/2018 only knew the direction down since then.
We will soon start the fundraising for LUKSO, but not as an ordinary ICO, but in a new form called Reversible ICO. This concept that we developed will make the fundraising process longer, and hopefully also safer for investors. It is not only meant as our fundraising but also as a showcase for how to make ICOs regulatory friendly and safe by design. Feel free to read about the rICO here.
Tokenisation is part of the overall DeFi trend, and if you look at the current crisis from an overall perspective would you agree that something like the corona crisis where suddenly people are unable to meet up in the physical world only confirms that digitisation is becoming increasingly important and so are next-generation digitisation like decentralised finance solutions?
Like I explained earlier digitisation will be the next big thriver for blockchain as a whole. Yet tokenisation has yet not reached its full potential. Currently, the focus is very much on DeFi, since I proposed ERC-20 in 2015. Yet the real potential is community tokenisation and the way to use tokens as loyalty, reputation and social connective tissue. Those are the tokens that will revolutionise social media, the power of communities, and how we interact on a global scale. Those will be tokens that will not be treated as money or investments, but first and foremost as tools to engage, enable and empower!
Do you have any advice for the industry about how to get the most out of the current situation?
See the future, build the future! That’s what we are talking about and doing at LUKSO. You can read about it in details in our blueprint here.