How does the token economy drive the real economy？
To understand how the token economy changes the real industry, it is necessary to clarify the concepts of the real economy and the token economy.
In the traditional sense, we are accustomed to dividing economic activities into virtual economy and real economy, but under the continuous development of the times, it is actually difficult to divide the components of some economic models in modern economic society. Generally speaking, the real economy refers to economic activities such as the production and circulation of services and material and spiritual products, which are the basis for human survival and development. The virtual economy is an economic form that is based on financial markets and financial tools and corresponds to and has a close relationship with the real economy.
Token economy is an economic system built around the brand-new concept of “token”, and it is a bridge between the real economy and the new virtual economy. By tokenizing the entity, it will have greater liquidity and improve the efficiency of asset utilization. For example, in 2018, a building in the East Village of Manhattan, New York, was financed in the market through a tokenization method, which greatly improved asset liquidity. Through tokenized assets, we can simplify financing steps, reduce financing time, and have stronger operability and greater transparency.
So how does the token economy drive the development of the real economy?
1. From the issuer of the pass: the financing direction of traditional enterprises is relatively single, but as the supply of pass, it can fully realize liberalization and marketization. As long as the market recognizes, any company or individual can issue its own pass. For example, recently The NFT (Non-Homogeneous Token) issued by Beeple, which is very popular, sold for nearly 70 million US dollars and issued its own token as an individual artist to realize the transfer of value.
2. Improve asset circulation speed and flexibility: The assets of traditional physical industries are mainly fixed assets, such as real estate, machinery, materials, etc. The liquidity of these assets is closely related to market conditions, which makes it difficult for certain assets to generate cash flow in a short period of time, and the process is more cumbersome. The token on the blockchain can not only solve the liquidity problem, but also make the transaction more reliable, safer and more transparent through the contract, which can reduce transaction disputes and other issues to a certain extent.
3. The degree of price discovery and marketization: In the past, the real economy was not so sensitive to market prices due to information and some other reasons. Although the emergence of Internet e-commerce has reduced the price difference to a certain extent, the same product has other factors. Price measurement is still very different. Through the token economy, prices can be determined more quickly, and prices can be much more refined and sensitive than existing market price signals.
4. Pass application: For traditional entities, the value conversion mostly occurs once. Through pass application, the entity’s pass will not only be a credential, it can also bring about subsequent effects of value, such as the value of the market to the pass. If it is expected to rise, the price increase of its token will be reflected immediately, and at the same time, the introduction of Defi (decentralized finance) token can also obtain value benefits.
It can be said that the current era is moving towards the era of blockchain, and the application of token as a blockchain technology will change our existing real economy will be huge and disruptive. We should embrace this era , Embracing the token economy, the future is here!