Decentralized finance (DFI), tokens and irreparable tokens (NXT) are gaining momentum as sub-sectors that can replace the traditional financial system. All are taking advantage of a comprehensive approach to unlock earning opportunities for all, while offering a financial ecosystem without permission.
However, ownership of real-world assets or private equity does not allow you to access products that produce Defy produce. Additionally, much of the excitement about NXT and DIFI has usually been different since they rarely come together in a project.
However, this is not a technical requirement, and creative protocols such as Convergence have stepped in to unlock the ability to combine the best features in three areas. The new model revolves around a decentralized interchangeable asset protocol that is dedicated to bringing real-world assets and investment-grade NXT into the Defy space through tokens and partial assets.
With the help of service providers like Convergence, one has the facility to give tokens to every asset to access the Defy Liquidity Pool. Even non-cash assets such as private / unicorn companies or foreign shares can be closed in the DEFY protocol.
Additionally, although the scarcity and exclusivity of some crypto assets, such as NXT, have been the main focus, there is a lack of liquidity that has limited access to a wide audience.
Convergence bridges the gap through WSTs
Convergence operates an Automated Market Maker (AMM) protocol that makes real-world asset exposure interchangeable in the DIFI space by combining novel wrapped security tokens (WST) with utility tokens on a single interface.
A wrapped token is a property hosted on the Ethereum blockchain that is similar to another underlying asset (traditional or crypto). This allows the representation of the reserved property to move across different blockchains by acting as a type of bridge.
Through a two-layer process, Convergence allows token securities issued by partner projects to be “wrapped” and then traded on AMM by investors and fund managers. This enables 24/7 decentralized counterparty business and real property value discovery.
Now, even those familiar with crypto do not have a chance to participate because WSTs generated through the platform can radically realize the economic benefits of real-world asset risk.
In the coming months, the service is expected to wrap up a large number of additional tokens, with several fast-growing unicorn companies already under consideration.
Fractionalism is the next big thing
While crypto enthusiasts are eager to see the next breakthrough in the blockchain-based investment space, allowing real ownership rights to partially represent real-world assets may be the next big thing.
Not only for the overall development of the Defy and Token markets, but can also create a new chapter in the democratization of investment and open up unique opportunities for property owners and investors.
Given that many traditional and crypto assets are selling for large amounts of money, the idea of fractionation is taking shape to allow small investors to pool resources and buy fractional interests.
As noted above, real-world assets will be traded as security wrapped on the Convergence Platform to allow free asset transfer while ensuring compliance with applicable requirements. However, the company has gone one step further to ensure more liquidity and to give more investors the opportunity to invest in different asset classes.
Convergence has turned into fractionalism – a trend that is gaining traction and may change the emerging industry.
Considering Fractionalization, the Convergence Protocol now allows individual investors with low capital to invest in assets that were not previously available to them. This includes shares of unicorn companies, private funds, pre-IPOs, even a fraction of a real estate project.
For example, users will be able to swap Dogecoin (DOGE) with SpaceX exposure via ConvergenceAMM. However, Convergence’s vision goes beyond this by integrating with other Defi Lego / Utility tokens to further enable new and creative use cases.
Although its decentralized protocol serves as a much-needed channel for linking liquidity to the defi space, it also provides enormous liquidity for DIFIs from the financial sector, valued at more than $ 30 trillion. In other words, convergence enables property owners to access decentralized DFI liquidity, while DFI users can also access real-world asset exposures.
Locking crypto tokens has recently become a major trend in the DeFi protocol. But the trading volume here is only thriving with speculative trades and pure bets. Consequently, Convergence helps the market mature in this aspect and sets the stage for token assets to follow suit.
Imagine that anyone is now able to stake their crypto assets as a partial, wrapped security token in a foreign private investment or trading of private-selling shares. This development is truly disruptive and may reshape the way traditional finance and crypto worlds interact with each other.
The purpose of blockchain technology was to actually fulfill the promise to democratize access to financial resources, eliminate middlemen, and even legally change.
Despite some success, there are pain points that hinder large-scale adoption and prevent the real potential of this concept from being realized. What is really happening, however, is that real-world assets are moving closer to the world of blockchain, and projects like Convergence only speed up the process.