How Xodus Secures Tangible Assets Within Its Treasury

To grasp how important an asset is, you need to look at its prospect and long-term value and benefits. In the traditional market, we have tangible and intangible assets. The tangible ones are your cash, luxury items, real estate, equipment, etc., that exist in physical form while the intangible ones are non-physical like patents, accounts receivable, or goodwill. It is the tangible assets that are the focus of Xodus.

In the crypto world, tangible and intangible assets are brought to life through Non-fungible tokens (NFTs); NFTs are crypto tokens that are unique and used to represent real-world assets or digital assets. It could serve as proof of ownership over these assets or proof that you own a part of the assets.

How Do NFTS Bring Real-World Tangible Assets to Blockchain?

NFTs are digital assets that hold records of identifying data stored in smart contracts. The data each NFT holds is what makes them unique, which is why one NFT cannot replace another one like for like. Hence the name non-fungible token.

What makes NFTs the perfect fit for bringing real-world tangible assets like real-estates and luxury items to the blockchain is that non-fungible tokens ownership cannot be duplicated. In a broader concept, an NFT is more like a concert ticket, you can’t simply share a part of a concert ticket since it will lose its worth. Hence, becoming unredeemable.

In most cases, NFTs are usually linked to a specific asset, which makes them unique. NFTs can be used to signify the ownership of digital items like game skins, or even physical tangible assets.

Real-world assets are tokenized into NFT tokens using Ethereum’s NFT standard mostly. For instance, platforms like Sorare and Decentraland make use of ERC-721. Nevertheless, other smart contract-enabled blockchains can also utilize their non-fungible token tools and support to create NFTs.

To make things more interesting, NFTs and their smart contracts allow the inclusion of detailed attributes and characteristics, from ownership identity to rich metadata and secure file links. For a fast-paced digital world adoption, the potent utilization of NFTs to prove digital ownership is remarkably brilliant and important in this progression.

Luxury brands like Christian Dior, Givenchy, Celine, and Louis Vuitton are not left behind in this crypto adoption. These brands have already initiated the use of blockchain technology to authenticate goods jumbled up within counterfeit items, thereby, indicating and isolating the authentic products from the counterfeits. Blockchain can be used to track an authentic and verified item’s entire lifecycle, ranging from raw materials sourcing, manufacturing process, and even retail sales.

Why Is Xodus Incorporating Real-World Assets?

Photo by Jingming Pan on Unsplash

Unlike other DeFi projects backed by stable digital assets, Xodus plans to utilize a proportion of its treasury to collaborate with real-world asset-backed platforms. To bring real-world assets on the blockchain.

When it comes to traditional finance, the term “diversification” is seen as a grand plan. However, diversification in cryptocurrencies/DeFi is also possible, it’s not exploitable enough compared to traditional finance.

Virtually all the crypto market follows the Bitcoin volatility so in the end, a diversified investor’s portfolio is still under Bitcoin’s influence.

Xodus aims to diversify the process with the aid of treasury funds by investing in gold, luxury watches, art, wine, and other significant real-world assets.

The independence of the Treasury that comes with this plan guides against the volatility being directly dictated by BTC’s price trend while appreciating organically as time goes on.

As the blockchain industry is still at its infant stage and inclined to be volatile, the successful transfer of a fraction of Xodus treasury into digital asset-backed products will tend to prepare the treasury for a proper cushion against volatility.

How Xodus Secures Its Tokenized Tangible Assets

Talking about tokenized assets, let’s break down how Xodus goes about digitizing its tangible assets held within its treasury and the steps taken to ensure its security on its way to the treasury and when it gets to the treasury.

Tokenizing Assets

The first step is tokenizing the assets via the Ethereum ERC-721 token standard. A third-party provider carries out the process and it may have or may not have its way of tokenizing a specific asset. As much as the means adopted is certified to meet Xodus requirements, the third-party provider and its assets will be considered for the Xodus treasury.

Securing the Real-World Assets

Now there are the tokenized assets and the physical assets that they are representing. However, how does Xodus ensure the real asset is secure? Since without the real asset the tokenized version is basically useless, as the value it represents is lost already, the solution lies in moving the asset to a secure storage facility for safekeeping. A facility that is thoroughly inspected for safety, the overall record of accomplishment, insurance, and compliance.

The Digital Asset Appears in the Xodus Treasury

As soon as the asset is secured, the process of appreciation kicks in. Back to the Xodus treasury, the tokenized version of the specific asset that has been secured is what you will find in the treasury. It will stay there for as long as treasury managers and the community deem it so.

Auditing and Oversight

How does Xodus ensure the asset is truly secured and in place?

It is important to note that Xodus will not hold tangible assets. It will only hold the tokenized version of the asset while leaving its management to several top-of-the-industry third-party providers.

Xodus’ main task is then to vet the protocols by which the third-party providers rule themselves and make the necessary due diligence and assessment of who is the right partner.

Once this partner is found and approved by the community, both external auditors and internal will oversee the whole process cover to cover with routine auditing in place to make sure the assets are secure, untampered with, and safe.

Conclusion

Originally, minting is positioned to be the main source of profit for XOD tokens. However, Xodus’s main aim is to move a portion of the treasury into real-world assets that include luxury watches, fine art, gold, rare whiskey, and much more.

Xodus also aims to collaborate with platforms that are introducing asset-backed NFTs in the near future. These luxury items are bound to appreciate due to their real-world value.

However, for this to happen, the security of the asset itself is of high importance. That is why the requirement is high for third-party providers regarding asset security and Xodus meticulously plans the whole process of securing the asset.