The adoption of the most innovative technologies is necessary to achieve a rapid Energy Transition. An almost unexplored frontier is the adoption of blockchain and in particular the asset tokenization process. But what is it?
Within the context of blockchain technology, tokenization is the process of converting something of value into a digital token that’s usable on a blockchain application. They can represent tangible assets like gold, real estate, and art, or intangible assets like voting rights, ownership rights, or content licensing. Blockchain technology enables any asset or service to be represented and stored on a blockchain, thereby democratizing access to assets while providing an unprecedented level of online transparency and security. [Cryptopedia]
Some successful examples of asset tokenization are:
- Royal (music industry): it enables anyone to own a piece of their favorite songs and earn royalties alongside the artist. Artists can choose what % of the song’s royalties to put up for sale. You can purchase these streaming royalties in the form of ‘tokens’ and then claim royalties for the song after they’ve accrued.
- Lofty AI (Real Estate): is an online marketplace in which almost anyone in the world can invest as little as $50 to buy a digital token that is equivalent to a stake in a single-property rental business. [CNBC]
We want to introduce the asset tokenization process in the sustainable energy industry to make financing and building sustainable energy plants (eg. photovoltaic plants) easier and more accessible. But let’s go more in-depth.
How can tokenization be useful in the Energy Transition?
Tokenization can make the process of buying, selling, and receiving revenue from a section of a plant immediate and secure. Each plant is divided into different Plant Sections and by investing in our Deentra Platform, a web 2.0/3.0 hybrid platform, the financers can fund the creation of the plant and be rewarded with our native token for the energy produced by the plant itself.
How will we do it?
The plant tokenization process occurs in three stages:
- First step: The value of the financed sustainable energy plant (PlantValue) is established at a theoretical level by Deentra depending on the estimated revenue and plant-dependent factors (such as the type of plant, the amount of energy the plant is capable of producing, and the cost of installation and assembly, etc…). Then the number of Plant Sections is computed for each sustainable energy plant depending on the minimum investment required (Min.Investment). The number of Sections is equal to:
n° Sections = PlantValue / Min.Investment
- Second step: the financers can invest in the construction of the plant by acquiring one or more Sections of the plant on the Deentra Platform. Each sustainable energy plant will constitute a separate financing campaign and each Section is representative of an equal share of earnings generated by the plant itself.
- Third step: after the conclusion of the financing campaign the plant will be built and once it will be functional the financers will start to be rewarded for the energy produced by the plant.
Plant tokenization process
What are the Pros of introducing tokenization for the financing of new plants?
The tokenization of sustainable energy plants is a way to empower people in the Energy Transition and will be introduced by Deentra to facilitate the funding of new sustainable energy plants,
Financers can directly fund the construction of new sustainable energy plants and be easily rewarded on their wallets connected to the Deentra platform. They can introduce in their portfolio a stable long-term investment (whose duration is equal to the service life of the plant) with low entry barriers which is also about sustainability. They can do that without having the technical know-how or property to build a sustainable energy plant.
The hosts of the plants can power their properties with sustainable energy even if they don’t have sufficient capital to finance the plant on their own by outsourcing its funding through the Deentra platform.