Each day you may find a new pack of news about tokenization. Dozens of new projects are arising daily. Some of them cannot keep pace with compliance. Subsequently, we have more news that “asset”-baked tokens are investigated by regulators.
Let’s try to summarize what ways of tokenization we have found by already announced projects and various companies. Though we haven’t found any successful example of oil and gas tokenization. But might this is a great opportunity for you. You can be the FIRST one to tokenize these assets successfully.
Ziyen Inc. is an energy company. They have decided first to acquire oil and gas leases. Afterward, to release security tokens that will be a tokenized shares of stock in the Company. Moreover, as stated in their Offering Memorandum, the team has acquired 18 oil and gas leases in the Illinois Basin in just 18 months. Though the team doesn’t have loud announcements, they still are raising funds through their own website.
Venezuela’s government had issued its oil-backed cryptocurrency already in February 2018. The token called Petro is backed with the country’s natural resources reserves. Namely, Petro tokens mean the share of tokenized oil barrels. However, Petro is a tricky subject as the government does not provide adequate information. Therefore, no one really can tell do these tokenized barrels exist or, if yes, how much are they worth.
A British company, R Fintech, created Bilur. These guys did not stop on tokenizing oil and gas but decided to create an entire “BilurMarket”. Their product is a simple trading platform, where people can purchase, hold and exchange tokens based on energy commodities. In contrast to the Venezuela government, Bilur is more transparent. You may find the real price of their commodities and tokens. For example Oil: 1 BRE = 1 TOE = 6.481 Oil Barrels
In short, the easiest way to tokenize such assets as oil and gas is to sell the share right by using smart contracts. Yet, creating the smart contract, notwithstanding the complexity level is the easiest part of asset tokenization.
More important is to keep with the transparency. Token holders and investors should know what they are paying for, so here is basically a simple yet very effective solution.
We should understand that such assets as oil and gas are involved in constant circulation and are difficult to be calculated due to sustained movement. Therefore the most appropriate time to calculate its amount is straight during the producing stage. Each producing “station” has its own system, where it records the number of resources produced.
And so, it’s possible not to create everything from scratch but to embed Blockchain directly to the existing system. Accordingly, each time our “station” produced a certain amount, it will be recorded in the blockchain network. Afterward, the system will give a signal to the Smart Contract to mint new tokens. The tokens will represent the equity rights or/and shares of the Management Company.
The key benefits of such an approach:
- The audit and quality control are easier to be held;
- The data will be un-erasable, and easily reached;
- Private Blockchain allows dividing data access/management to different roles, with personal validation keys;
- Reduces time management for collecting data;
- Provides a transparent management system;
- Increases the oil and gas trading market;
- Confirms the availability of resources, as well as shows the real worth of the tokens.
If you will succeed in tokenizing assets like oil and gas, the whole world will undergo dramatic changes. The understanding that assets may not be bound to the US dollar anymore will open more and more opportunities. Having a unique way to sell, coordinate and hold these assets will simplify the process of their trade. The world is waiting for great changes, and you could be the one to start them!