Practical Blockchain-Based Financial Assets Tokenization

Abstract

Financial institutions own balanced portfolios with different types of assets, resulting in a low-risk investment. At the same time, assets cannot be broken down into smaller parts with comparable risk for resale owing to regulators’ restrictions caused by a lack of auditability. Blockchain overcomes this issue with smart contracts. By now, the way to tokenize financial assets into a commodity is known. In this paper, we provide technical details for tokenization. Namely, an artificial dataset from Forex data is constructed for demonstration purposes; two tokenization algorithms are implemented and applied to the dataset; ERC1155-based smart contract is implemented and applied to the algorithms’ output to perform sold-out and secondary market steps. The source code is openly available.