A book that understands the key question of monetization

Author:Theo

Other Organiser

At the heart of the monetization is the elimination of all friction。

Most people hear "coinization," and all that comes out of their minds is speculative digital coins. They were completely wrong about the focus。

The true story lies in settlement speed, 7x24 hours of all-weather mobility, fragmentation ownership and the slow demise of financial intermediaries: These seemingly dry infrastructure changes are the real force for reshaping markets。

There's a saying here, which is plain to hear at first glance, but it's a long thought: When you sell a stock today, you actually have to wait two working days to get the money. Not two seconds, not two minutes, but two days。

THIS IS CALLED THE T+2 SETTLEMENT, WHICH IS SO RARE AND SO THOROUGHLY EMBEDDED IN THE MODERN FINANCIAL ARCHITECTURE THAT MOST INVESTORS HAVE NEVER STOPPED ASKING WHY。

The answer is: because of the transfer of ownership of assets between the two parties, a chain of custodians, clearing houses and counterparties is required. This is a bureaucratic relay that was invented before the Internet was born and has never been fundamentally redesigned。

Every link in this chain requires time to identify, record and secure transactions. The two-day wait was a cumulative institutional friction that eventually became standard practice。

THIS IS THE REAL MEANING OF ASSET MONETIZATION: NOT COINS, NOT SPECULATION, NOR NFT IMAGES, BUT A BET – THE ENTIRE CLEARING AND HOSTING INFRASTRUCTURE OF GLOBAL FINANCE CAN BE REBUILT ON PROGRAMMABLE BOOKS。

When that day comes, the two days of waiting, the costs of intermediaries, the threshold for qualified investors and the time limits for dealing will appear as old and outdated as the fax machine。

Real-world asset snapshot

So what exactly is asset monetization

The monetization of assets is the process by which ownership of real world assets (a building, a bond, a fund share, an art piece, a private equity) is expressed in digital currency on the block chain. The token is a programmable record of ownership that exists in a shared, tamper-proof account book, separate from the asset itself。

Common definition:Think of the token as a digital contract. When you buy a currency share of a commercial property, your digital wallet receives a currency representing your ownership share。

The token automatically records who owns it, when it changes hands, and under what conditions it can be moved, without any need for the registrar to update the spreadsheet。

Unlike paper contracts or brokering account records maintained by third-party custodians, block-chain-based tokens are designed to be self-trusted: ownership records are maintained by the network itself, not by any single body that may freeze, lose or distort them。

There are different operating mechanisms at the bottom; some monetization projects use public block chains such as the Etherfrog, while others use licensed business chains operated by banking unions。

It is not important what a specific book is, but it is important to make a structural shift: ownership records previously found in isolated agency databases are now present in a shared, interoperable system. This is a far-reaching change。

Four issues actually solved by monetization

Issue 1: Settlement speed

THE T+2 CLEARING WINDOW EXISTS BECAUSE IT TAKES TIME TO CHECK TRANSACTIONS BETWEEN MULTIPLE INTERMEDIARIES (EXCHANGES, CLEARING AGENTS, CENTRAL SECURITIES REPOSITORY). EACH AGENCY MAINTAINS ITS OWN RECORDS; THEIR SYNCHRONIZATION REQUIRES A SEQUENTIAL HANDOVER PROCESS。

On the block chain, the settlement is atomic (Atomic). When the transaction is executed, the token is moved from one wallet to another in the same transaction. There was no handover, no accounts and no risk window for the counterparty。

SETTLEMENT TAKES PLACE WITHIN SECONDS OR, IN THE CURRENT COURSE OF IMPLEMENTATION, IN LESS THAN A MINUTE FOR MORE COMPLEX TRANSACTIONS. THE UNITED STATES STOCK MARKET SHIFTED FROM T+3 TO T+2 IN 2017 AND TO T+1 IN 2024; AND THE MONETIZATION MARKET HAS GONE THROUGH ALL THESE STAGES AND IS IN PLACE TO ACHIEVE NEAR-IMMEDIATE SETTLEMENT。

FOR INSTITUTIONAL TRADERS, THE DISTINCTION BETWEEN T+1 AND T+0 IS NOT JUST SPEED, BUT FINANCIAL EFFICIENCY. EVERY DAY BETWEEN THE EXECUTION OF THE TRANSACTION AND ITS SETTLEMENT IS A DAY WHEN CAPITAL IS LOCKED ON THE EDGE AND CANNOT BE REDEPLOYED。

In the size of the global stock market, these trapped capital represents tens of billions of dollars in opportunity costs。

"The two-day clearing window is a cumulative institutional friction that eventually becomes standard practice, and monetization is the first reliable solution that can break it down."

Issue 2: Mobility, or lack of mobility

A $50 million commercial real estate is a very valuable asset on the books. In practice, it is almost entirely mobile。

Selling it requires finding a willing buyer, negotiating prices, engaging lawyers on both sides, conducting due diligence and then waiting for months to complete the delivery. There's no exchange, there's no trade price difference, and if you need $200,000 in cash on Thursday, you can't sell only a fraction of the building。

This is not unique to real estate. Private equity, infrastructure assets, art treasures, share of venture capital funds, equity rights in litigation: large wealth pools remain in assets that are very low-frequency, highly non-transparent and are confined to large institutions with patience and resources。

Substituteization does not automatically make non-liquid assets liquid. However, it created the infrastructure for the existence of secondary markets。

If ownership of a building can be divided into tokens traded on a digital exchange, a limited partner requiring mobility will not have to wait for the fund's redeeming window or find buyers for all their shares. They can sell tokens. Not to sell the whole asset, but to slice it. This alters the investment logic of each asset class that has historically been prohibitive for non-liquidating premiums。

The more experienced builders in this area have learned a deeper lesson: the issuance of tokens is only half the job。

A tokenized asset that has no secondary market, no recognized collateral framework, and is not integrated into the place of dealing is functionally non-existent. It is only a better proof of ownership, but it is not a better financial instrument。

A few platforms have now begun to make mobility the design requirement for the first day, rather than allowing it to develop naturally after publication. Theo was created by a former marketer from IMC Trading and Optiver, and launched the thBILL (a chain opening that invests in corporate-level United States Treasury policies managed by Wellington's management firm and works with Libeara of Scum Chartered Bank)。

The product was integrated from the outset with marketing, loan agreement support and cross-chain deployment (covering Etherum, Base, Arbitrum and HyperEVM). Such tokens may be traded, used as collateral, or operated directly in the DeFi agreement without the need for conversion。

This is a vivid demonstration of what is really needed to address liquidity: not just the distribution infrastructure, but a complete market structure that gives the monetized assets the value they hold。

Issue 3: Barriers to fragmentation ownership and access

The minimum investment of most private credit funds is $500,000. The minimum investment for many commercial real estate syndicates is $100,000。

These thresholds exist not because small-scale investors make economic gains worse, but because the cost of managing a large number of small-scale investor relationships is extremely high: tracing ownership, processing the distribution of proceeds and dealing with foreclosure. The cost of paper work per investor does not decrease in proportion as investment volumes decline。

traditional ownership vs

Smart contracts eliminate most of the management costs. The distribution of dividends can be programmed to be implemented automatically when conditions are met, without manual processing or hosting costs. Property records are updated in real time. Investor communication can take place on the chain。

The spread to zero management costs per investor means that the minimum investment threshold can be reduced by several orders of magnitude without undermining the Fund ' s economic model。

The regulatory environment is indeed complex: securities laws in most jurisdictions still require qualified investors for specific investments, and monetization does not change these rules。

It changes the economic viability of serving a broader group of investors, once the legislation allows, or in those growing asset classes that it already allows。

Question 4: Removal of intermediaries (actual mechanisms)

Every intermediary in a financial transaction exists to address the issue of trust. The trustee ensures that neither party absconds during the delivery of the property. The Clearing House guarantees you will still receive your securities if your counterparty defaults. The trustee holds assets on behalf of clients who cannot be trusted to be safe and secure。

Smart contracts replace trust with codes. A monetized bond may be programmed to automatically pay the coupon to the token holder at a specified date, release the collateral upon repayment of the loan and execute early redemption if certain conditions are triggered。

All of this does not require trustees, payment agents or contract administrators. Contractual terms are enforced by the network, not by any institution that may be corrupt, bankrupt or simply negligent。

1. Assets expressed as tokensLegal title is encoded in smart contracts on block chains and tokens are transferable documents of these rights。

2. The terms are programmed into a contractPayment schedules, transfer restrictions, foreclosure conditions and governance rights are embedded in codes and self-executed without artificial intermediaries。

3. Currency transactions in secondary marketsHolders of tokens may sell their positions in an exchange created specifically for their monetized assets and settle them within a few seconds without having to liquidate the intermediary。

4. Automatic distribution of cash flowsRental income, interest-rate payments and other distributions are triggered by direct entry into the wallet of the token holder, without a payment agent, without a floating fund and without processing delays。

Why is this not about encrypted money

It is understandable to confuse monetization with the speculation in encrypted currency, but it hardly helps. Yes, tokenization uses block chains. Yes, the same account infrastructure supports bitcoin. But their similarities are nothing more。

Bitcoin and its speculative derivatives derive their value from scarcity and narrative. In contrast, monetized real estate, bonds and private equity represent assets whose value derives from income, cash flows and entity operations. The monetization is an entirely new ownership and settlement layer for existing asset classes。

The entire business model of the institutions that are building the monetization infrastructure, including Morgan Chase, Beled, Franklin Templeton, Goldman Sachs and HSBC, relies on managing real assets for real clients。

Morgan Chase's Onyx platform has processed hundreds of billions of dollars in dollar-based buy-back transactions. In the weeks following its launch, the BIDL Fund in Beled (a monetized money market fund) had exceeded its assets by $500 million. These are capital investments in faster and cheaper settlements。

"The institutions that are building the monetization infrastructure are Bellard, Franklin Templeton and Morgan Chase, which depend on the very reliable management of their core assets for their survival."

A real obstacle that cannot be ignored

It would be dishonest to portray the monetization as an absolute necessity. There are structural barriers that slow down their adoption, and these barriers are not related to technology itself。

The legal framework of most jurisdictions still defines asset ownership by paper records, registered agents and trust accounts. The currency on the block chain does not have an automatic legal status; it requires clear regulatory recognition, which varies greatly between countries and asset classes。

Some Governments are taking action. The EU DLT Pilot System (DLT Pilot Regime) and the British Property (Digital Assets, etc.) Act are early examples. However, the legal certainty of monetized assets remains patchy。

Interoperability between different block chain platforms is another outstanding issue. A tokenized bond issued on the Morgan Chase Onyx chain could not be automatically settled with the share of a tokenized fund issued on the Taifung bridge, without which another form of counterparty risk was re-introduced。

Ironically, the proliferation of numerous competing clearing-house networks is reshaping the issue of the "Isolated Institutions Database" that should have been addressed in modern currency。

Finally, there is the question of the distribution of benefits. The intermediaries that are being replaced are not passive bystanders. The trustees, clearing houses and transfer agents provide significant transaction revenue to institutions that are also trying to build a monetization platform. These existing interest groups are well motivated to adopt this technology slowly and to move forward in ways that protect their existing income streams。

What's changing? Nothing's changing

It is not realistic to portray the endpoint of monetization as a perfect market without friction. It is by no means a utopian market without friction. The settlement risk did not disappear; it simply shifted from the credit risk of the counterparty to the code risk of smart contracts, which also had their own vulnerabilities。

Fragmentation ownership does not automatically create deep liquidity: a thousand small family members of a monetized building are still unable to enforce the sale of assets and the market for coins remains thin unless marketers are actively involved。

What really changed is the cost structure of the whole "bottom pipe."。

THE T+2 WINDOW IS CONTINUOUSLY COMPRESSED TO ZERO. THE MINIMUM VIABLE INVESTMENT LEVEL FOR THE LACK OF A LIQUID ASSET CLASS IS DECLINING. THE PROCESSING OF SINGLE TRANSACTION COSTS FOR PAYMENT OR RECORDING OF TRANSFER OF OWNERSHIP BECOMES CLOSER TO THE COST OF A SINGLE DATABASE, RATHER THAN THE ADMINISTRATIVE COSTS OF MANUAL OPERATIONS。

These changes are not so dramatic in isolation. But when they are stacked on all the assets currently locked in slow, expensive and multi-broker structures, this constitutes the largest reorganization of the financial infrastructure since electronic transactions replaced public calls for prices。

It's a story about infrastructure. Your investment logic, your bowing to regulation, your prejudgement of the timeline depend entirely on whether you really understand this. At present, the majority of those concerned with monetization still do not see it。