Opinion by Justin Banon, Co-Founder of Boson Protocol
The advent of Web3 represents the next significant leap in human technological progress. By tokenizing real-world assets (RWAs), we can break free from outdated systems and unlock exponential wealth.
A Leap Forward in Human History
Each technological advancement in history has unlocked new wealth and possibilities, from the rural to the industrial and digital eras. However, every system has its limitations. Today’s digital economy struggles with sustainability and inclusivity. It’s time to upgrade.
The Limitations of the Current Digital Economy
The current digital economy is plagued by issues such as:
- Sustainability: The digital economy’s reliance on non-renewable energy sources and e-waste generation.
- Inclusivity: The exclusion of marginalized communities from access to digital technologies and financial services.
Tokenizing RWAs: The Key to Unlocking a New Economic Order
Web3 offers the potential for this next leap forward by tokenizing RWAs, particularly luxury goods like high-value jewelry. This transformation enables broader access to ultra-luxury markets and paves the way for a more inclusive, computable economy through new forms of ownership.
The Soft Power of Coordination
Institutions of social coordination are key to technological progress, although they seldom advance at the same speed as industry. When they do, however, the leaps forward can be spectacular. Think about how written language enabled the administrative systems of the first societies, or try to imagine a global economy without universal time.
Blockchain and Web3: A New Leap Forward in Institutional Technology
Crypto technologies facilitate trust and lower the costs of economic coordination. This innovation enables elements of the economy to "talk" to each other without intermediaries and to verify who and what they are with certainty.
Breaking Down Barriers to Entry
The current digital economy’s limitations can be attributed to its reliance on layers of slow, expensive, unreliable intermediation. This computability limit is a constraint on the scale of complexity that global economies can attain — and a ceiling on their prosperity.
Blockchain: Enforcing Hard Property Rights and Automating Commitments
Blockchain enforces hard property rights and automates commitments, ensuring money is only released when the sale conditions are met. Transactions become immutable and verifiable, transforming the system from unreliable and opaque to precise and deterministic, enabling a more efficient, trustless economy.
Solving the Physical Asset Oracle Problem
The next leap in economic complexity is to bring all forms of capital, including offchain RWAs, into the crypto economy with the same reliable and computable "hard" properties as native onchain assets. Only by "hard tokenizing" RWAs will we accelerate the transition.
Early Adopters: Fashion and Luxury
One area witnessing the early adoption of this technology is fashion and luxury. This segment is experiencing its first global slowdown, COVID-19 aside, since the Great Recession. According to a recent Bain and Co. report, this is driven by economic uncertainty, rising prices, and consumers increasingly prioritizing experiences over products.
The Future of Luxury Ownership
Enabling the fractionalization of ultra-luxury items, a new generation of customers can own a share of these assets. Fractions of these assets can then be traded or plugged into decentralized finance for use, for example, as collateral for loans.
Unlocking New Opportunities
The tokenization of RWAs will form the backbone of the next bull run and unlock the transfer of trillions of dollars of value into crypto. We are at an inflection point of complex systems evolution. The luxury market is the starting point, but our actions today will have a massive influence on what happens next.
A New Operating System for Humanity
The opportunities of a computable economic order will stretch beyond just individual wealth. Humankind stands to benefit from a new operating system with the scope to address the existential threats that face our species. An upgraded metasystem offers the prospect of extraordinary human achievements currently beyond our reach or imagination.
Conclusion
Web3 represents the foundation for a new economic order, one that is more inclusive, sustainable, and efficient. By tokenizing RWAs and leveraging blockchain technology, we can unlock exponential wealth and create a brighter future for humanity. The opportunities are vast, but so too are the challenges. It’s time to take action and shape the course of human history.
About the Author
Justin Banon is a co-founder of Boson Protocol and has been awarded World Economic Forum Technology Pioneer status. Justin studied physics at Imperial College London and holds two Master’s degrees.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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