There have been a number of radical developments in the field of digital finance and investing over the past two years, with one of the most notable being the concept of “tokenization.” Essentially, tokenization involves converting any asset class, be it virtual or physical, into digital tokens, which can then be stored and traded on the blockchain.
To highlight the growth witnessed by this sector in recent months, as of the third quarter of 2023, the total value of tokenized assets across all sectors amounted to $2.75 billion, with several conservative studies estimating this figure will rise to $12.68 billion by 2030, growing at a CAGR of approximately 19.3%. Not only that, according to several asset management firms and major consultancy giants, such as “21.co”, this figure could scale between $3.5 trillion and $10 billion by the end of the decade, citing the continued convergence between cryptocurrencies and traditional cryptocurrencies. assets due to the same.
Finally, over the past year, a growing list of major financial institutions such as BNY Mellon, JP Morgan and BlackRock have acknowledged that they are actively developing their own tokenization platforms or have become aware of the benefits these assets offer, particularly in terms of streamlining of payment and settlement processes.
Renew customer interactions using Web3 technology
A recent study conducted by professional services firm KPMG showed that companies that choose to integrate a “tokenization framework” into their loyalty programs can experience significant improvements in customer engagement levels. Furthermore, the researchers noted that introducing such blockchain-focused programs can help introduce users to the basics of cryptocurrencies and digital assets.
Finally, the study states that as it stands, 82% of consumers worldwide are “highly willing and open” to using tokenized assets as part of currently enrolled programs, with this enthusiasm stemming from the fact that this avenue allows brands to create more interactive assets. and rewarding experiences: allowing users to accumulate tokens for every small purchase or engagement action, which can then be redeemed for rewards or experiences.
One company that has made its mark in this space, differentiating itself from the rest of the fray, is Tidepay. The project allows companies to create a tokenization-based white label rewards platform that offers a wide range of benefits such as discounts, access to events and other exclusive opportunities for their customers.
By going beyond traditional marketing methods and embracing the concept of tokenization, Tidepay opens up new avenues of engagement beyond conventional social media approaches, offering businesses the opportunity to design custom rewards apps that carry their brand while being deployable in a wide range of sectors.
Most recently, Tidepay partnered with ATH Vodka, a premium alcohol brand, to launch a cryptocurrency-based rewards app that allows users to unlock access to exclusive music events such as the Sony Music-backed Strawberries and Cream festival , exclusive supercar trips (in conjunction with Cannon Run), weekend getaways and even yacht rentals.
The future of tokenization
Looking from the outside, the numbers seem to clearly suggest that the realm of tokenization is set to grow immensely in the coming years, something that can subsequently have a transformative impact on global engagement levels between brands and their customers.
Size of the tokenization market by 2030 (source: 21.co)
As highlighted in the previous sections, by integrating blockchain technology into their existing frameworks, companies can offer highly personalized loyalty programs and unique experiences tailored to individual consumer behaviors and preferences. Additionally, the gamification aspect of digital tokens can add an extra layer of interactivity and engagement to the mix. It will therefore be interesting to see how the future of this thriving sector continues to evolve!
