examples for allocation of funds via blockchain

Some examples and projects that demonstrate the allocation of funds via blockchain:

NFT-Backed Lending Platforms

• On NFT lending platforms, borrowers can use NFTs as collateral to secure loans in cryptocurrency or stablecoins. The process often involves smart contracts, ensuring that funds are released to the borrower only after the NFT is securely locked within the contract. Repayment terms and interest rates are also enforced automatically by the smart contract, ensuring transparency and automation in fund allocation.

  • NFTfi is a leading peer-to-peer NFT lending platform where borrowers can list their NFTs and receive loan offers.

  • BendDAO is another popular platform where lenders deposit cryptocurrency into a pool to fund loans for borrowers who deposit high-value NFTs as collateral.

  • Arcade allows borrowers to list NFTs and set loan terms while lenders can choose loans to fund.

Tokenization of Real-World Assets

• Real Estate Tokenization: In a project in Ukraine, an apartment building was tokenized, and ownership was represented by NFTs on the Stellar blockchain. Investors could purchase fractional ownership of the building via these tokens. This demonstrates how blockchain can be used to allocate funds directly to a specific asset. The sources also note that tokenization of real estate has the potential to provide greater liquidity and access to a larger pool of capital for real estate projects.

• Tokenized Securities: The Provenance Blockchain platform supports the creation, financing, and trading of a wide range of financial assets, including debt, equity, and derivatives, all represented as digital tokens. This platform demonstrates the potential for blockchain to manage the allocation of funds throughout the lifecycle of various financial instruments.

Other Blockchain Projects for Fund Allocation

• Digibrixx: A Luxembourg-based project that tokenizes property, allowing investors to purchase tokens that represent fractional ownership of a building. This model seeks to democratize real estate investment by allowing for smaller investment amounts.

• Fasset: A platform focused on using blockchain for the ethical financing of sustainable infrastructure projects. It allows infrastructure owners, including governments and utilities, to offer asset-backed investments to a broader range of investors.

• Partior: A joint venture between DBS Bank, J.P. Morgan, and Temasek (Singapore's sovereign wealth fund), Partior is building a DLT-driven platform for cross-border payments and settlements. This project aims to streamline the allocation of funds in international transactions by increasing efficiency and reducing costs.

Blockchain's Role in Fund Allocation

These examples illustrate how blockchain can contribute to fund allocation through:

• Transparency and Traceability: All transactions are recorded on the blockchain, making it possible to track the flow of funds.

• Automation: Smart contracts can automatically execute predefined rules for fund distribution based on certain conditions.

• Fractional Ownership: Tokenization enables the division of assets into smaller units, allowing for a broader range of investors to participate and allocate funds to specific projects.

It is important to note that these examples showcase potential applications of blockchain in fund allocation. The level of clarity achieved in practice would depend on the specific implementation and design of the blockchain system.