Codex protocol is a new blockchain project that can have repercussions far beyond the crypto industry, by making an entire asset class ripe for massive liquidity. How is this possible you may ask? Well, the codex protocol is working towards an asset registry on the blockchain that can truly track the origin and provenance thereafter. This is a big step towards authenticating art and other unique assets as it changes ownership over the course of time.
Equity and Debt Markets for Art?
The protocol itself is a way to record and track changes of ownership. The larger picture is the applications built on top of such a protocol can really open up these markets for lending, collateralization and other financial innovations. Imagine owning an ETF of art from the 18th century and you’ll begin to get an idea of how this is a powerful idea.
More than equity though, it is the debt markets that would really open up using the codex protocol. How? Simply because banks and financial institutions can lend against your asset but there is reduced danger of fakes and other such issues. This is because each piece is authenticated when it is entered into the system, and thereafter all the changes of ownership are recorded on the blockchain for anyone to verify. The scope of cheating is much reduced.
The debt markets can become much more matured as well. Crypto owners can borrow or lend to others against their collateral and never even have met the person! This is because the codex protocol itself is run on the Ethereum blockchain, so you can buy, sell, trade, lend, etc. using ETH or other ERC20 tokens native to the Ethereum blockchain. As the crypto owners’ wealth grows over the coming years, this will become a distinct possibility.
The process is even smoother with digital art, which is ushering in a new era of gaming and art on the blockchain, starting with CryptoKitties. These already exist on the Ethereum blockchain, and can therefore easily become a part of codex protocol. If the financial markets are on codex, then it would be easy to bring your CryptoKitty into this ecosystem, and borrow money against your digital asset. Your imagination is the limit on how far this can be pushed – for example, you can borrow against your CryptoKitty and use it to breed other CryptoKitties and hopefully pay off your lenders and regain control of your digital art.
The Codex protocol is really building a standard and protocol for art and real-world collectibles to help provide liquidity to this asset class. Given the size of this market – trillions of dollars worldwide, the goal is ambitious but the rewards are high too.
Interested in learning more? Check out the website and whitepaper. Codex protocol is undergoing a token sale. Make sure to do your thorough research before putting money into any token sale. Token sales are extremely risky and you can lose all your money. Don’t invest more than you’re comfortable losing.