Precious metals, such as gold, silver or platinum, qualify as fungible assets, which means that each unit can be replaced or interchanged by an identical unit of the same kind. For example, it is possible to replace a 1kg gold bar with another gold bar. It is relatively easy to divide these assets into units, and precisely due to that, precious metals are considered a great asset for tokenization.
Industrial metals, such as lead, copper, nickel, and zinc are also classed as fungible assets and are perfect candidates for tokenization. A unit of of an industrial metal can be tokenized, as well as the entire mining operations and facilities.
The seventeen so-called “rare-earth elements” include cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y). These elements are also great asset for tokenization, due to being fungible assets.
Precious stones are non-fungible assets, which means that each unit is unique. Their value depends on carat weight, purity and other qualities. Tokenization of non-fungible goods, such as precious stones, allows selling the unique stones in digitals portions, i.e. tokens, reducing the barriers of entry and potentially democratising an asset for a larger audience of investors, in any part of the world.
Like metals, energy commodities belong to the fungible asset class, as they are easily divided into units. Today, barrels of oil and cubic meters of natural gas can be tokenized and securely traded on blockchain, with costs and time significantly reduced.
Renewable energy is a new asset class that includes solar, hydroelectric, geothermal, biomass power-generating energy, or wave & tidal technology generated energy. The units of energy generated can be tokenised, as well as the entire facilities.
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Financial services, providing a virtual currency wallet service; Number FRK000909
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