Sumotex debuted in 2021 to revamp the real estate economy via tokenization and fractionalization. The real estate and traditional financial systems faced the problem of liquidity. Hence, the development of Sumotex’s AssetFi protocol to fractionalize illiquid assets off-chain and move them on-chain would provide liquidity.
The Problem Of Traditional Finance
Traditional finance dates back to the barter system era of 6000 BC. From the Mesopotamian period till date, it has evolved to become the foundation for economic development. Annually, it records a 9 percent growth rate, with the global finance market amounting to $22.5 trillion, also 25% of the world’s economy.
Finance is an intrinsic aspect of human life. Without it, people cannot engage in transactional activities. Finance involves people purchasing commodities, securing loans, and delving into investments and product consumption.
It is equally a day-to-day life for organizations. Nowadays, firms take loans for business expansion, capital support, bond issuance, a leveraged buyout of rivals in cataclysmic conditions, and to boost their industrial share prices. But a bulging problem with traditional financial systems is centralization.
Financial centralization or centralized finance (CeFi) occurs when banks and other financial agencies authenticate remittance, lending, and borrowing. However, the institutions and the users are under the same regulatory control designed by the government and the central banks. Therefore, non-compliance to these rules may result in severe penalties inflicted by these bodies.
For example, Bulge Bracket Banks and some leading private equity or asset management organizations control the financial system. This structure paved the way for centralization to pervade the same. But, despite laying institutional finance as the groundwork for economic development, evading blockchain is nearly impossible.
Notably, Decentralized Finance (DeFi) has expanded over the years. Still, there needs to be an explicit definition of asset management and blockchain investment. However, a blockchain solution is crucial to revamp institutional finance and traditional investment, given that the latter capitalizes on the market.
Sumotex AssetFi Brings Solution To Centralized Finance
To this end, Sumotex AssetFi protocol, a hybrid governance chain that allows users to execute on-chain and off-chain financing and investment procedures, brings decentralized solution to traditional finance. It seeks to integrate with investment firms to create a decentralized investment and asset management platform.
Sumotex is AssetFi’s debut project and the first to provide fragmented digital and physical asset control. The protocol crumbles the wall between traditional finance and blockchain investment, in turn, restructuring the subsisting on-chain fundraising processes. Furthermore, investors can tokenize their off-chain assets for instant liquidity.
After obtaining approval from governance, an on-chain onboarding process of these assets will take place allowing investors to tap into the protocol’s liquidity pool. The direct onboarding process makes it easy for anyone to access the technology. Sumotex offers limited-time and permanent deals to users.
Additionally, AssetFi chain provides the solution to the most prominent private equity funds setback due to its low liquidity asset nature. It solves the issue of decentralizing institutional finance. This, in turn,downsizes the cost of decentralized investments.
It keeps private equity firms from entering an illiquid state. Tokenized Real Estates Investment Trust (REIT) funds will become accessible to anyone who wishes to own properties. Finally, it is affordable for investors with small capital as the tokens are divisible.
Sumotex developed AssetFi to revolutionize the finance and investment sector. In the coming years, the protocol will capitalize on the $22.5 trillion financial market.
Our Use Case:
To achieve this mission, Sumotex is bringing together a team of goal-oriented enthusiasts to the AssetFi project. Jointly, they will explore the potential of the protocol and its essence to finance and investment.
Sumotex has a $3.5 million real world use case with an Malaysian wellness center, Danai alongside with the partnership with UBB. Together, they will integrate the health and wellness industry with the AssetFi blockchain. Danai Medi-wellness firm is committed to promoting human wellbeing via a fused wellness service.
Furthermore, Sumotex has a secondary deal with Homevest Global, a property investment and management firm, to offer financial services to AssetFi investors. The firm is offering a $2.5 million income generating residential asset portfolio in Malaysia to customers. Homevest provides affordable real estate properties to clients.