According to Grayscale Investments, while several major public blockchains can benefit from the tokenization trend, Ethereum is the one that best combines the characteristics and conditions to serve this emerging sector.
The tokenization of real-world assets has gained special relevance in the financial industry, where different traditional asset classes have been combined with the blockchain in search of a Greater utility, operability and liquidity.
While several banks and financial firms are exploring various private blockchain solutions, currently, public blockchains focused on scalability, high performance and low costs are providing greater opportunities for success for companies experimenting in this sector.
In relation to the above, the digital asset investment firm stressed that, thanks to a wide variety of factors, the Ethereum blockchain has the best chance of leading the growing asset tokenization sector, and offering companies better tools to benefit from the functionality of blockchain technology.
Tokenization will take place on public blockchains
In the report "Public Blockchains and the Tokenization Revolution”, Grayscale explains that tokenization has a huge positive impact on the financial market, mainly thanks to the ability to “bring users, assets and applications together on a common global platform.”
Although there are different blockchain networks on the market, Grayscale highlights that the Ethereum public chain, which dominates the smart contract and DApp ecosystem in terms of users, volumes and value deposited, “can be considered meaningfully decentralized and credibly neutral to network participants,” which the firm noted as likely an essential requirement for any global tokenized asset platform.
On the other hand, although Grayscale considers Ethereum to be the network most prepared for the innovation that asset tokenization entails, it also recognizes that other blockchains, such as Avalanche, Stellar, Polygon, Mantra and Polymesh, the latter two of which were specifically designed for tokenization, could take advantage of the various opportunities of this global trend.
Grayscale also highlighted the role of asset tokenization in accelerating the growth and expansion of the blockchain industry, citing Chainlink’s interoperability protocol, CCIP, which is providing a core infrastructure to connect multiple blockchain networks and facilitate the exchange of data and value across chains, both public and private.
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