- The DeFi community members are tokenizing themselves on the Ethereum blockchain.
- Tokenization is a textbook of an illegal securities offering says David Hoffman.
- Tokenization does not offer its buyers any regulatory safeguards. Neither does it provide any investor protections or support of any kind.
DeFi (Decentralized finance) is the process through which decentralized entities can convert their old financial products into trustless protocols that run without delegates. In contrast, Tokenization is the method of ousting sensitive data. It assigns data with unique identification symbols. The symbols hold all the necessary information about the data without jeopardizing its security.
The DeFi community members are tokenizing themselves on the Ethereum blockchain. These tokens have the name of their owners. These tokens tossed as stakes under the brands or digital communities of their tokenizers. The tokenizers are now starting “personal token sales” in the place of imposing cash (ETH or BTC) for the services.
These “personal token sales” enact as a “utility-driven tool for the digital community. One can redeem these tokens for services. For instance, talking to the tokenizer, accessing the content, or engaging the professional time. In case they are not committed with a dividend.
The trust guarantees the worth of those tokens within the individual. It indicates that these tokens don’t have any assurance or guarantee. No kind of security attached to these tokens or agreements.
Tokenisation Offers Zero Assurance
David Hoffman, the COO of RealT, tweeted that the Tokenization is a textbook of an illegal securities offering. Tokenization does not offer its buyers any regulatory safeguards. Neither does it provide any investor protections or support of any kind.
He further continued that while using Bitcoin or Ethereum, one relies on the blockchain’s assurances. While one buys security, one depends upon the reliability of the U.S.’s regulatory system.
This ultimately doesn't fix the fact that "personal tokens" are inherently flawed
The only "personal token" I would ever consider is @SDinwiddie_25's
The legitimacy of personal tokens will be settled by the legal system, not by Ethereum https://t.co/SizvsMuMer
— DavidHoffman.eth (@TrustlessState) May 6, 2020
The settlement assurances with the personal tokens rely on trust. It’s the exact opposite of real cryptocurrencies—the entire system based on faith in the tokenizer, he stated.
Many believe that self tokenization claimed as a very risky investment and all about losing your finances.
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?