Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309799 
Year of Publication: 
2023
Citation: 
[Journal:] Digital Finance [ISSN:] 2524-6186 [Volume:] 5 [Issue:] 3 [Publisher:] Springer International Publishing [Place:] Cham [Year:] 2023 [Pages:] 563-580
Publisher: 
Springer International Publishing, Cham
Abstract: 
The tokenization of financial assets using blockchain technology is a transformative process that allows for the fractionalization of ownership, thereby creating more accessible investment opportunities compared to traditional financial assets. Recent research has shown that token offerings are subject to moral hazard and fraud. In response to these challenges, we propose a novel token design that is compliant with the legal framework of Switzerland. Our design is characterized by its flexibility and can represent any yield or dividend-bearing asset, such as stocks, bonds, or rental income from real estate. Further enhancing its compatibility, the token conforms to the Ethereum ERC-20 standard, enabling seamless integration with existing decentralized finance solutions. Another contribution of our token design is its innovative approach to dividend distribution. Unlike traditional models that distribute dividends based on ownership at the time of payment, our token design distributes dividends based on holding times. This distinctive approach promotes smoother asset prices between dividend payouts by eliminating the need for compensation payments. Our token prototype represents a potential starting point for future research on leveraging the opportunities of decentralized finance.
Subjects: 
Blockchain
Crowdsourcing
Dividend distribution
Decentralized finance
Security token
Tokenization
JEL: 
G18
G23
G32
K22
M13
O33
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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