According to Cynthia Wu, the Founding Partner and COO of Matrixport, nearly every real-world asset could be tokenized as a nonfungible token (NFT) within the next five to ten years. Wu believes that the ideal scenario for NFTs would involve the widespread representation of real-world assets being stored and traded on-chain. This move would increase the liquidity and tradability of these assets, resulting in improved price discovery and transaction activity.
Currently, the majority of NFT transaction activity comes from digital collectibles, which has not significantly contributed to institutional adoption. However, Wu remains confident that this will change in the future.
A recent report by Boston Consulting Group (BCG) estimated that the total size of tokenized illiquid assets could reach $16.1 trillion by 2030. BCG predicts that the tokenization of assets such as pre-IPO stocks, real estate, private debt, and revenue from small to medium-sized businesses will contribute to this growth.
While financial institutions have shown interest in the tokenization of real-world assets, some have been hesitant to move away from legacy systems. Wu highlighted that the traditional financial system does not account for the trading of nonfungible assets as easily as fungible or divisible assets. However, tokenization on the blockchain offers a solution to this issue. Wu argued that blockchain infrastructure is superior to legacy systems due to cost efficiencies, improved liquidity, 24/7 market access, and the elimination of intermediaries.
Matrixport, established in February 2019, currently manages between $3-4 billion in digital assets for a diverse range of retail and institutional clients.