Assets in Token City are divided into two types of tokens.
Tokens representing rights that are issued for the first time.
This case refers to that of a company that raises financing in one or successive rounds. In each of them it offers part of its social capital in exchange for money to operate. By definition, when an investor purchases shares in a private company during an investment round, they are shares that are being sold for the first time.
The investor who buys them gains the right to sell their shares to another investor, with the expectation of being able to do so at a higher price, recoup their investment and make a profit. They can sell them to a second investor, the latter can sell their shares to a third and they in turn to a fourth. The right that is transmitted in each of these operations is always the same but, in the eyes of the law, the sale operation carried out by the first investor is different.
The first investor bought shares in a company that had never been for sale before. In the eyes of the law, the right inherent in these shares arises, or is issued, in that first transaction. It is different because when it comes to issuing a right where there was none before, fraudulent operations can be carried out that it is necessary to try to prevent through legislation.
That is why we tokenize the financing rounds through our group company Adventurees.com, which has the necessary license to do so. We call this process “token issuance”.
Tokens that reflect existing rights
When it comes to assets that, in the eyes of the law, are not being created for the first time, we speak of “direct tokenization”. In this case, it is Token City that is directly responsible for creating the tokens, which represent private company shares and debt rights.
Tokenizing company shares has the same utility as tokenizing investment rounds: it makes it easier for the owners of those shares to sell them whenever they want later. The reason is that until companies like Token City emerged, secondary markets for private equity capital were practically non-existent.
In the case of debt tokenization, we tokenize both individual loans between two companies and mortgage debt portfolios and it is even possible to tokenize entire funds. Get in touch with us to find out more.
Token City is the ultimate bridge to the tokenized economy (tEconomy), in which tokenized companies (tEnterprises) create their cryptoasset markets (tMarkets), open to global investors (tCitizens).