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Min Read

What Your Want From a Web3 Digital Asset Platform

Update
Since this post was written, Hyperledger FireFly has reached 1.0. Learn more here!

Digital asset tokenization is a popular trend in the enterprise blockchain space. Where once tokens were synonymous with a public chain-based cryptocurrency, today businesses are tokenizing many real world assets to digitize legacy systems.

Tokens are especially helpful when transferring assets on a shared business network because they are well-defined, traceable, and secure. You can essentially create a token, or digital twin, out of any real-world item. This includes holdings, contracts, even property.

In this article we’re going to talk about the benefits of digital assets to businesses and how the best digital asset platforms empower you to manage your holdings.

But first let’s do a quick overview of the types of digital assets you may need to manage with a Web3 application.

Types of Financial Assets That Can Be Digitized

When we talk about digital assets, there are three main types of assets and each has distinct advantages.

Capital Assets: Equities, bonds, and real estate are asset types that have value and provide returns. Proper management of these assets allows for proof of ownership and real-time tracking of value change.

Consumable/Transformable Assets: Precious metals and physical commodities are assets that have economic value and can be represented digitally. They are different from capital assets in that they offer no yield, but can be traded or used.

Store of Value Assets: Precious metals, art, and currency are holdings that can be represented in a digital asset. These are like investments that a person can manage, track, and protect to ensure they maintain value.

Digital assets offer people and businesses a number of advantages. For content creators or large institutions, digital assets allow ownership protections, value tracking, and control over who can access certain assets.

Capabilities You're Looking For

So you have a digital copy of a real world asset, either something that retains value or an economic mechanism. Now we’re going to talk about the benefits of digital assets and how a digital asset platform sets you up to realize this business value.

The benefits of digital assets we’re going to discuss are:

  1. Secure self-custody
  2. Instant settlements
  3. Enterprise-grade security
  4. Policy engine
  5. Defi & exchange linking
  6. AML & KYT
  7. API-enabled transactions
  8. Liquidity in lending
  9. Consortium capabilities

These benefits we’re discussing are specific to Web3, as they offer businesses increased control over their data and the ability to automate processes around assets.

Let’s dive in.

1. Secure self-custody

One of the most common requests from companies who need to manage digital assets is secure self-custody.

Self-custody wallets use private keys to validate identity and allow users to access assets in real-time. These private keys are paired with a public key or wallet address to add another layer of security to the mechanism.  

2. Instant settlements

A blockchain-backed digital asset platform offers businesses the ability to settle transactions much more quickly than in the traditional financial system. This is important because longer settlement times introduce risk. For example, what happens if you sell or transfer an asset and the value of that asset changes dramatically in the day or two it takes to settle the transaction? Both parties involved may face complications.

A shared ledger cuts intermediaries out of any settlement process using smart contracts to automate transactions, speeding up the completion of business and mitigating risk in deals.

3. Enterprise-grade security

Enterprise-grade, or institutional-grade security is another hallmark of the best digital asset platforms. The private-public key combination, shared ledger, and potential for private cloud or hybrid hosting means enterprises can securely access and manage data under strict regulatory conditions.  

A platform like Kaleido is designed to meet the most rigorous enterprise requirements with SOC 2 Type 2 and ISO 27K certifications, built-in HA/DR, enterprise identity management, and more to offer peace of mind to the enterprise.

4. Policy engine

A digital asset platform allows you to replace manual user permissions, so you can control who sees what and when. Any institutional-grade platform worth its salt, like one built by Kaleido, should also allow you to automate around-the-clock governance.

These new, automated policy engines become necessary for decentralized and remote work. In a day when employees are spread around the globe, policy systems built in Web3 make facilitating business easier.

5. Defi and exchange linking

Blockchain technology is taking hold in the financial sector, especially as it relates to deregulated finance (Defi). As your digital asset platform supports the minting of tokens and unique assets, new revenue streams open up, and you may need the ability to link to exchanges.

By using a Web3 stack like FireFly,  you can communicate with exchanges and manage your institutional crypto. The connection gives you a real-time view of your holdings with the ability to search and filter.

6. AML and KYT

Anti-Money Laundering and Know Your Transactions protocols allow you greater insight into the people you’re doing business with and allow you to meet compliance requirements. Blockchain-backed applications also help automate a lot of this work and record keeping.

The best digital asset platforms will not only help you manage, track, and control your holdings, but also protect you from risk in the future.

7. API-enabled transactions

We talk a lot about APIs at Kaleido. Mainly because our team of engineers feels the most important thing about working well with a blockchain is giving developers the ability to build on it without having to become blockchain developers first. That’s why we believe any great digital asset platform should be equipped with a Rest API Gateway that makes blockchain development familiar to any developer.

Our REST API Gateway handles smart contract compilation, can send Ethereum transactions, and query blockchain data. It’s also backed by the industry standard for reliable ordered streaming of transactions—Apache Kafka.

8. Liquidity in lending

Digital assets represent holdings for some companies. But for others they represent potential. Imagine an underbanked manufacturer in the Global South who needs to provide collateral quickly to acquire financing. Or a business with limited liquidity that needs to quickly convert real world assets into a digital asset to trade.

Digital asset platforms allow financial transactions to occur faster and seamlessly. They can also remove risk, as smart contracts tied to transactions ensure a trade is completed fairly upon a certain event.

9. Consortium capabilities  

Multi-party systems are the hallmark of blockchain technology, and it’s no different for digital asset platforms.

Enterprise-grade digital asset management requires a company to be able to connect with others either along a supply chain or in a business network and buy, sell, and trade digital assets.

These settlements need to be efficient, but they also need to protect sensitive information and preserve data. Building consortiums around a digital asset platform allows us to architect data solutions and network rules that ensure efficient, equitable business is done.

Institutional-grade Digital Asset Platforms

The best digital asset platforms organize and protect digital files. But they also provide economic flexibility, private key access, and help automate legacy systems.

With permissioned and public chain capabilities, today’s digital asset platforms offer next gen security and mitigate risk as you tokenize real-world assets.

If you’re interested in building a digital asset platform, understanding how you can create digital twins of real assets to win in the Web3 economy, take a minute to schedule a call with one of our experts.The best digital asset platform is only a couple clicks away.

A Smarter Way To Manage Digital Assets

Explore the Kaleido console to see how we simplify digital asset creation and management.

Start A Free Trial

A Smarter Way To Manage Digital Assets

Explore the Kaleido console to see how we simplify digital asset creation and management.

Start A Free Trial
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Interested in Blockchain?

Start learning blockchain and creating enterprise solutions today with a free Kaleido account!

Create Free Account

A Smarter Way To Manage Digital Assets

Explore the Kaleido console to see how we simplify digital asset creation and management.

Start A Free Trial

A Smarter Way To Manage Digital Assets

Explore the Kaleido console to see how we simplify digital asset creation and management.

Start A Free Trial

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