The Wealth Initiative WIT project offers a solution for non-bankable assets by utilizing the blockchain to digitize these assets for the purposes of traceability and provenance. The entire history of an asset will be known, and it will be secured and verified in real time. This information can then be shared with ease with family members, business partners, and service providers.
The project will also introduce an automated valuation system. This will be achieved via the use of machine learning and big data to give the true value of all non-bankable assets at any time anywhere. Because of this approach, the project hopes to bring about asset consolidation and improve portfolio understanding and analysis.
Additionally, it hopes to introduce a new kind of marketplace, where it will be possible to tokenize assets via the blockchain. This will lead to limitless opportunities for asset owners and investors as well in terms of debt trading and equity.
The Current Issues
Most non-bankable assets are often left out of the wealth strategy of their owners. This is because their value is usually not immediately accessible. Besides that, the history and documentation related to these assets are usually scarce and in different formats and places. Besides that, these assets usually lack great liquidity, which usually has a major impact on their transaction costs.
The Wealth Initiative WIT project is going to digitize these kinds of assets by storing their defining characteristics on the blockchain with the help of the ethereum project. After that, they will then allow the asset to be tokenized, which will allow asset owners to unlock the value of the asset.
Besides that, it will make it possible for investors to invest in fractional ownership. This project would not have been possible without the blockchain. It is the first decentralized database that is not open to any kind of manipulation. It means any record stored there can be guaranteed to be accurate.
The Non-Bankable Assets
The high nets worth individuals’ population and wealth, in general, have been expanding globally in the last few years. Besides that, growth in knowledge of alternative assets like real estate, passion investments, and art has been growing. An increasing community of people is seeking to gain exposure to these assets.
Besides emotional and social value, these non-bankable assets are also a great store of value, in a time when the world economy has been quite unstable. Part of the reason why the HNWI invest in them is as a diversification strategy. Over the long term, these assets also have the potential to outperform equities.
The Real Estate Sector
The real estate market is today worth around $217 trillion. It is what makes up over half of all mainstream assets in the world. It is estimated that about $16 trillion transactions take place annually. However, the sector is prone to bureaucracy and lack of an international standard. This usually means that transactions usually take quite long. Tokenization could help to resolve these issues.
It is estimated that there is $3 trillion worth of fine art in safe storage. Of this, about $65 billion is traded annually in auction houses. However, this marketplace is prone to high inefficiency and high transaction costs. Tokenization will most definitely play a crucial role in this sector.