Liquidity refers to the extent to which a market allows assets to be bought and sold at stable prices.
We are talking about the risk of loss arising from an inability to convert assets into cash at carrying value when needed. Asset liquidity risk is sometimes known as market liquidity risk, since the process relates to the market price that is assigned to, and can be obtained by, a portfolio of assets. In fact, the market value of an asset has two primary sources of risk: the uncertainty of asset returns (that is, pure market risk) and the uncertainty of liquidity (that is, pure liquidity risk); the two at any time may be strongly correlated.
When it comes to storing your liquid assets, here are a few of the most common places people choose to keep their cash:
In case of emergency, it is difficult to cashing in assets like car, bicycle, truck or even our farm. These assets may become completely illiquid, meaning no one is interested.
BANKEX aims to provide asset owners with a new way to gain liquidity by tokenized their real-life assets with minimal transaction costs. While keeping the actual assets for their use, owners do not need to borrow money and pay interest.
The goal is to achieve the security, speed and ease of transfer of tokens, combined with real-world assets. This is a new form of an old concept: “securitization” (turning a set of assets into a security). There are many types of assets that can be put on blockchain but we must first understand that there are two types of assets, fungible and non fungible. A fungible asset is one that can be replaced by another identical asset. Think wheat, gold or water. Fungible assets are much easier to convert to tokens because they can generally be broken down into smaller units, and a token can stand for a group of objects rather than a set of individual objects.
While non fungible assets require an abstraction layer in order to tokenize. For example, a coworking space building, which looking to share ownerships for each space. This is the method used for securitizing mortgages.
Tokenization of these illiquid assets brings in new people who previously didn’t have access to such assets due to expensive procedures or legal complications that are incredibly hard for the average person to make sense of. For example, a share ownership of coal mine, luxury apartmens, premium office building, paintings and many more.
BANKEX is the Proof-of-Asset protocol. It is an additional layer between blockchain infrastructure and real assets which aims to put additional transparency. Using this technology asset owners solve the issue of asset liquidity. In result, implementing Proof-of-Asset means that the token issued as part of the protocol is backed by an actual asset that is constantly tracked in automated way.
The main difference between the BANKEX Proof-of-Asset protocol and other analogs is the ability to tokenize various types of assets as it has modular structure. Proof-of-Asset protocol is the set of principles and base technologies that allow quickly developingnew asset class token for almost every type of assets.
