We have seen lately the battle between small investors and the big sharks. The show has demonstrated how corrupted and manipulated is the centralized system. Until now, we believed that small players were unprotected and powerless but now we know that fighting together can yield good results.
As it happens with DeFi, I believe the next big thing will be tokenized stocks. In this model, you own a portion of the company via tokens instead of shares. There are many advantages like storing your crypto shares in a cold wallet instead of a broker like Robinhood or a live market 24/7.
The brokers could be the worst enemy sometimes. There are a lot of tools they use to make up the reality. For example, they use omnibus accounts to reduce fees but is not clear who owns the shares. Because of this, they can sell your placed orders information to third companies that take advantage of it (see front running). Also, the broker could lend your shares to short sellers investors like Melvin Capital.
The tokenized shares give you true ownership over your shares so you have the full power of decision. You don't need to rely on intermediaries to buy and hold your hard-earned shares. In case the broker fills bankruptcy you don't have to deal with legal issues and bureaucracy.
About dividends, you can receive them right away into your wallet in the form of BTC, BCH, DAI, or more shares. Imagine the company instead of paying dividends they buyback tokens and then send them to your wallet. This could add a lot of value to your already existing shares.
The company governance would be another good chance. We have seen sometimes how the executives laughed at the investors like raising their salaries, paying stupid bonuses to themselves, or borrowing money to pay dividends. And even worse, that could happen when the company doesn't have any profit. The investor could have a governance system similar to the one's DeFi platforms have and enjoy better control of the company.
If you have been in this world for a while, you will know how transparent the blockchain is. You can explore addresses and see what they are doing looking at the transactions or how many tokens they hold.
As I mentioned above, the brokers or other companies could be doing shady things without you noticing it. In this new model, it could be possible for you to see what others are doing and take action.
What companies are tokenizing their shares?
There are a few companies that offer their own tokens. These are not shares but are similar because you can get dividends and advantages when using their platform.
Travala is a travel and hotel booking company that issues its own token called AVA. With this token, the owner can stake and hold in exchange for some benefits. These ones consist of discounts and rewarding the stakeholder with a 24% APY bonus. The user gets a monthly payment directly into its wallet receiving more AVA tokens and travel credits to spend on the platform.
Another example is Nexo, this company offers banking services like lendings and interest earnings on your saved cryptos. The Nexo token enables you to earn dividends from their net profits and some other advantages like earning more interest on your currencies.
This model could benefit companies and small investors. Don't expect already established companies to switch to the blockchain but new companies can take advantage of this with ICOs instead of IPOs. This is still a new thing and we can expect further developments and improvements.
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