Simplifying The Tokenisation Process
There are many decentralized financial applications that are in use today. In more developed countries with fully functioning banking systems, decentralized applications are primarily being used for trading, investing, gaming and gambling. In third world countries, DApps are attempting to provide more life-essential functions such as lending and payments and tokenization.
Tokenization is the process of protecting sensitive data by replacing it with an algorithmically generated number called a token, creating a bridge between real-world assets and their trading, storage and transfer in a digital world. A token is an asset, utility, or a unit of value that is issued by a company. It represents programmable assets or access rights which are managed through a smart contract and an underlying distributed ledger.
There are three categories of them: “utility” tokens, “security” tokens and Non-fungible tokens (NFT). What are the differences between them?
Traditionally, securities can represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body/corporation, or rights to ownership as represented by an option. A security token is a tokenized, digital form of these traditional securities.
These depict assets such as participation in real physical underlyings, earnings streams, companies, or entitlement to interest payments or dividends. In terms of economic function, these are the same as bonds, derivatives, and equities. Security token provides participants with greater transparency in investment experience. Startups that offer security tokens must provide investors with a plethora of legally required information such as the company location, financial statements, business purposes, and management. All valuable pieces of data to be sure about before making any investment. While utility token investments can provide this information, they are not legally required at this time.
Utility tokens are user tokens or app coins. When a company creates a utility token, it means that it is essentially creating a form of a digital coupon that can be redeemed in the future for discounted fees or special access to a product or service.
Non-Fungible Tokens (NFT)
Think of NFT like an airplane ticket that is unique to a person after it is issued, meaning it is not interchangeable. Because NFT are unique, no two are alike, and hence NFT cannot be replaced with another identical token — this is a property known as non-fungibility, and it is enforced by smart contracts that prevent duplication, while publicly visible blockchains allow for provable scarcity. Eventually, Non-Fungible Tokens open the door to potentially digitising all intellectual property rights, and tokenizing all assets.
The vast majority of NFT are currently based on the ERC721 standard.
ERC-721 tokens have found applicability in many domains of the Ethereum space, the most relevant are Collectibles, Gaming, VR real estate and Utilities.
Creating Token Issuance Solution With Tools Provided in Morpheus Labs SEED
Morpheus Labs SEED is an end to end platform for developing, testing, deploying and running blockchain-based solutions. It provides various tools and services to help platform users quickly achieve their business goals without having to deal with the underlying technologies.
There is an increasing demand in companies and projects that need to issue new Utility tokens, NFT tokens, or Security tokens for their business needs. However, they do not know where to start and where to get technical expertise to create tokens. We were engaged by our client who was looking for a token issuance solution.
Morpheus Labs has successfully designed and deployed a web application tool for non-tech users to create and launch the three types of tokens mentioned in this article. The solution was designed and simplified by the Morpheus Labs tech team where he can easily issue utility tokens by filling out the form with necessary data without the burden of technical knowledge.
“Morpheus Labs made the coding and minting of our ERC20 token smart contract, a fast and simple process. The detailed documentation and handholding throughout the project were exceptional. We look forward to working with Morpheus Labs on our next project. “ — Julian Jordan CEO (VersoView)
The screenshot below shows the Tool to issue a standard NFT token. A platform user (e.g. a project owner) can log in to Morpheus Labs SEED, connect to an Ethereum network using Metamask wallet and then launch the tool from a web browser. The user simply needs to fill in the basic token information, choose if wants to create an ERC721 or ERC1155 based NFT token and Submit, the tool will automatically create and deploy the token smart contracts to the target Ethereum network. Now, the NFT token is ready for testing on Ethereum testnet or real use on Ethereum Mainnet, just simple like this.
Similar to issuing an NFT token, the Tool can automatically issue an ERC20 token with comprehensive add-on functions such as Pause, Lock up, White and Blacking Listing that can meet the requirements of most utility token projects.
For STO, the Tool implements any open-source security token solution to automatically issue tokens based on ERC1400 standards for regulation compliance, document handling and notification, Security token controls and permissions including delegation and forced token transfers, improving transparency for investors of their ownership rights.
For platform users who need to customize the Tool to suit the needs of their projects/ecosystems, either the users can customize the Tool using Morpheus Labs SEED (ML SEED) or engage the Morpheus Labs technical team to implement additional functions.
Morpheus Labs SEED is designed to create/customize blockchain solutions and tools easily at a low cost. Users can access ML SEED to download source code from the corresponding Github repository into a workspace with suitable stacks to start the development or customization of solutions. For general usage of Morpheus Labs SEED, please refer to our documentation.
This Tool and its source code currently are accessible for platform paid users (Growth tier and above).
Morpheus Labs Use Case Development
The Morpheus Labs tech team is currently working on a PoC project with a client who is planning to issue security tokens. More details on this PoC will be shared when there’s development as we progress.
We had a soft launch of this feature on our platform and there’s an increasing number of users building. We foresee a rapidly growing demand from companies to tokenize their shares and increase liquidity for their investors.
Start building now on Morpheus Labs SEED (Solution Environment for Enterprise Development). Create an account for free and get access to quick start-up guides, tutorials, and use case references.
For customised solutions, contact us info at @morpheuslabs.io.