Marketing Overview

Traditional vs tokenized investments

Traditional and tokenized investments exhibit numerous differences, they share equivalent legal, regulatory, and operational requirements for their non-tokenized features when viewed from a high-level perspective. Traditional investments are often limited by geographical, regulatory, and accessibility constraints, making them more exclusive and less liquid. On the other hand, tokenized investments offer enhanced liquidity, fractional ownership, and global accessibility, allowing a broader range of investors to participate in markets that were previously restricted.

Although tokenization has predominantly been associated with real-world assets (RWAs) like real estate investments, there is a growing trend among entities to tokenize private investment funds. This trend is driven by several innovative motives, including the desire to create more liquid markets, broaden investor participation, and improve transparency within these traditionally opaque asset classes.

Aspect	Traditional investments	Tokenized investments
Structure	Management and fund level entities, potentially including offshore feeder funds	Management and fund level entities, potentially with a token issuing entity
Accessibility	Often accessible through digital platforms, potentially offering greater liquidity and fractional ownership.	Typically limited to high-net-worth individuals and institutional investors, with less liquidity.
Regulation	Must comply with traditional fund regulations, such as SEC rules for securities.	Must comply with traditional fund regulations and additional requirements for token issuance and trading.
Offering Documents	Includes PPM, limited partnership agreement, and subscription documents.	Includes PPM, limited partnership agreement, and subscription documents with token-specific terms.
Investment Program	Investment in any asset class, typically including traditional securities, real estate, art, and commodities.	Investment invest in any asset class, including traditional securities, real estate, art, and commodities, often involving digital assets.
Service Providers	Engages traditional service providers such as administrators, auditors, brokers, and custodians.	Requires providers familiar with digital assets (e.g., digital asset exchanges) alongside traditional providers.
Liquidity	Generally lower liquidity, with shares often locked up for extended periods.	Potentially higher liquidity due to the ability to trade tokens peer to peer and in exchanges.
Transparency	Transparency varies, often relying on periodic reports and disclosures from fund managers.	Enhanced transparency through blockchain technology, allowing real-time tracking of ownership and transactions.
Fractional Ownership	Typically requires larger investment amounts, limiting fractional ownership opportunities.	Facilitates fractional ownership, allowing investors to buy smaller portions of assets.
Regulatory Challenges	Faces traditional regulatory challenges, primarily involving securities laws and compliance.	Faces unique challenges related to token issuance, trading, and custody of digital assets.
Tax Treatment	Tax treatment follows established guidelines for private investments, often with clear regulations.	Tax treatment can be complex due to the nature of digital assets and potential cross-border transactions.
Security	Security relies on traditional custody solutions and regulatory protections.	Security relies on blockchain technology and smart contracts, with risks related to digital asset custody.

While traditional investments remain a cornerstone of the financial industry, the rise of tokenization is ushering in a new era of accessibility, efficiency, and transparency. Scenium is at the forefront of this revolution, providing innovative solutions that bridge the gap between traditional and tokenized investments, ensuring that all investors can benefit from these emerging opportunities.