How ABTs are being used
The most common form of asset-based token is the stablecoin: a crypto token that is pegged to a government-issued currency, most commonly the US dollar, or algorithmically to a basket of other cryptocurrencies. The most popular stable coins – USDT, USDC, BUSD – are all USD-pegged. Stablecoins are important for the crypto markets (especially in DeFi) because crypto-native tokens such as BTC and ETH remain extremely volatile.
While stablecoins remain the most common ABT and financial instruments remain the most common form of asset used to back them, anything of value can be tokenized. Digital assets such as health data, song rights, and digital art are natural candidates for tokenization, given that they are non-physical.
Physical assets are the emerging frontier in ABT’s evolution, with art as a growing use case. The first artwork to be tokenized was Andy Warhol’s ‘14 Small Electric Chairs’ (valued at $5.6m). In 2018, 49% of the painting was made available for sale by the Maecenas platform, with the price decided by an Ethereum-based smart contract.
While Maecenas is a dedicated art marketplace, platforms such as Smartlands and AlphaPoint enable owners to issue digital shares for other traditionally illiquid assets in sectors such as manufacturing, logistics, and agriculture. As well as providing liquidity for existing assets, ABTs have the potential to serve as a means to raise capital for projects.