Two days ago, Hyperion announced that they were partnering with Interstellar. This partnership will enable all kinds of stellar-based assets to be traded on the Hyperion exchange. Essentially, anyone can securitize any asset on stellar and trade it on this exchange. This comes a few days after another deal involving Colliers and stellar. Colliers, a Canadian real estate company announced that they would be tokenizing on stellar, as a way of increasing liquidity. All this points to a scenario where the stellar network is slowly taking over the asset tokenization market.
There is a growing incentive for companies to seek tokenization on the stellar network. The first one is the cost of financing. As interest rates rise all across the world, the cost of financing will start to rise. This will have a huge impact on businesses, especially the SME segment of the market. Stellar creates an easy way for such businesses to raise financing from a global audience and quite cheaply. As more businesses begin to realize the power of the stellar blockchain, it will become the norm, in terms of raising financing for business.
The other incentive for businesses to tokenize on stellar is that it is compliant to regulations. Unlike ICOs, there are no regulatory issues around stellar-based tokens. That’s because the whole process entails tokenizing already existing assets. This is unlike the ICO model, which is more of a crowdfunding for untested ideas. In essence, there is little risk of scams in issuing stellar tokens as opposed to the issuance of ICOs. Since they operate within existing laws, stellar tokens are favorable for raising low-cost financing without businesses having to deal with any complications with the law.
Impact to stellar (XLM)
As more businesses tokenize on stellar, the value of the underlying stellar blockchain, will rise as well, since the transaction fees in the stellar network are paid in stellar lumens. In essence, the more the assets tokenizing on the stellar blockchain, the more the demand for stellar (XLM), which gives this coin a huge leg up for growth going into the future. This growth will not necessarily come from the big businesses looking to tokenize on stellar, but rather from the numerous small and medium sized businesses that will take this route as a way of raising capital. If asset tokenization on the stellar blockchain becomes the norm, and it possibly will, the value of Stellar (XLM) will rise significantly.
A quick look at stellar (XLM) price action in the last few weeks, point to this potential value growth. Since StellarX opened its doors to all, the launch of DSTOQ, and news of big players tokenizing on stellar came up, the value of Stellar (XLM) has been largely bullish, when compared to the rest of the market. This means that once asset tokenization begins to gain momentum, it could emerge as one of the best performers in this market. On this basis, it follows that stellar (XLM) could emerge as one of the best coins out there for long-term investors. Macroeconomic factors like rising interest rates could see its value skyrocket in the long-run.