What is liquidity as an economic term? Liquidity is the ability of the assets to be quickly sold at a market price. Note that we mean the ability to be sold for fiat money.
You have to process assets in accordance with the legal governmental system, provide necessary contracts and ownership documents so that these assets turned into commodities. And you have to pay for it losing your money, time, profit reduction an etc. What is more, the turnover of all liquid assets is strictly limited by operators’ licenses (which are banks, investing funds for example). They impose restrictions on their clients’ liquidity capacities by setting limits on the sums, periods and so on. It means that we can’t make all our assets liquid or manage them as we truly would like to.
Entering the liquid assets market costs a lot because managing this centralized controlling system costs too much as well. Central authority is programmed not to trust any of the system nodes responsible for transferring information or making decisions.
This system directly influences the liquidity phenomenon. Only those resources which successfully passed through the Procrustean bed of the central managing system will eventually become liquid assets. Less successful resources form the grey and black markets of the liquid goods, this assumes high risks and costs for their supporting.
Expensive centralization becomes a barrier to the liquidity growth of the goods and services what makes high goods exchange pace an impossible and unreachable goal.
Blockchain technology revolutionized the world of liquid assets.
Tokenization brought the tools letting anyone turn previously unimaginable assets into the liquid ones: like sharing ownership doles of the indivisible goods (such as diamonds, paintings, etc.), designing derivatives of different structures and types, etc. Since then tokenization gave us an opportunity to add liquidity to any kind of resources. This process was boosted with the emergence of crypto stock exchanges. as tokens obtained their own liquidity characteristics what happened many centuries ago to securities.
The Internet being the base of the distributed ledger technology has broken the new ground. It has turned into the Internet of the future.
Tokenization covers more and more digital assets. Anything that could be put into relations with something else is now actively tokenized: posts views in the social media networks, the number of followers or comments and so on. Tokens of these resources are placed at the crypto stock exchanges. Therefore all these data become a new type of assets.
Despite the fact that this activity is only gaining momentum right now we clearly understand that tokenization will eventually cover the Internet as a whole and all Internet activities sooner or later. Brand new tokenized digital assets will appear on the market.
First of all, it lets broader sectors of the population gain access to the liquidity turnover.
Secondly, any communications between startups and their equity change radically.
There are several tasks crucial for the startup’s survival, these are mostly connected with investments capital. The costs of attracting financing have risen significantly recently. Investors are overwhelmed with informational noise, their stereotypical mindset as well as with institutional, juridical, statistical limitations.
ICO gave access to investing tools to a great number of non-institutional investors. Since then anyone can become an investor regardless of the amount of investments, country or any other characteristics;
When purchasing tokens investors receive diverse values: from the ones identical to securities to those which remind coupons providing the right to get use of specific services;
At the early ICO boom stage innovativeness of the technologies mattered even more than the future income flows;
Relations between project teams and investors are regulated with the help of smart contracts which determine guarantees protection of the interests of all investment process participants;
An average investment cheque decreased while the number of investors grew up, so fundraising process actually turned into a crowdfunding campaign, it means that the media status of the project has become the main communications channel.
Investors form pools or microfunds, interact with startups using smart contracts. Expert pools will differentiate their relations with startups on the basis of the character of mutual obligations and investments rounds. Agreements and obligations fixed in the smart contracts may become a bargain with its own liquidity.
Tokens emitted for the investors purchase become the most liquid asset of the whole blockchain world thanks to the crypto stock exchanges.
So in fact, a contemporary blockchain startup is a set of assets with different liquidity characteristics (products, tokens, team, media activities, pools of the potential audience and backers, etc.). Management of these assets can be released both by startup and investors only using investment portfolio approach and actual investment strategies. The one who can apply this logic to the new world of the Internet of liquidity will become an operator of the future.
Here in Rocket DAO, we understand perfectly well the true meaning and the future of the Internet of liquidity. That is why we are developing the platform where each blockchain startup will project the level of liquidity of its assets. Our platform will unite investors, experts, and startups. Experts will select high-quality startups, investors will support them then. The main purpose of the platform is to maximize liquidity of the projects’ assets (as this is the main element which predetermines all communications between platform stakeholders). This can be achieved with the help of a multi-levelled startup assets system only, recommendations for the price growth and liquidity boost of these assets, and tokens emission.
The future is decentralized!