“IntangiFi, or Intangible Finance, is the decentralized financial system for intangible assets. A future driven by dynamic tokenization, lending, trading, and value creation for all.”
The word intangible can take on a few meanings. Literally, it refers to something non-physical that doesn’t have a physical presence, like an idea or an emotion. In the business world, it’s a specific balance sheet item, defined in accounting as “identifiable non-monetary assets without physical substance”. A good example is intellectual property. Our definition is somewhere in between. When we think of intangible assets, we mean not just traditional intangible assets like patents, copyrights, and brand value, but also emerging asset classes like data, cultural assets, and digital assets.
A 2020 study determined upwards of 90% of enterprise value within the S&P 500 comes from intangible assets of one form or another. This equates to trillions of dollars in value in the United States alone. For a second opinion, look no further than the stellar returns that have accrued to equity holders of major data and technology companies over the past decade.
Traditional financial systems for lending, borrowing, and trading were designed around the tangible ten percent. Simply put, this is financial services around things like stocks, bonds, and loans. Examples range from equity issuance and bond trading to more complex structures like a loan backed by a factory, or a bond secured by a company’s real estate holdings.
Intangible finance, in short IntangiFi, is the financial system for the intangible ninety percent of the enterprise balance sheet. It’s a new way for enterprises to engage with their intangible assets. To be effective it must drive liquidity, or the ability to buy or sell an intangible asset quickly and easily. It must enable efficient borrowing and collateralization. An example is a loan on the back of the value of your data or IP. It must enable novel income streams, for example via royalties or lending. It must allow for more effective price discovery, or mark to market valuations, which is foundational for collateralized lending. In the future, all of this will happen digitally, efficiently, and securely on interoperable networks built on the winning Layer 1 enterprise blockchains.
An early version of intangible finance exists today. Companies can and do borrow against their patent portfolios and royalty streams. However, its growth is self-limiting, hurt by inefficiencies, distrust, and information asymmetry. This is changing, and changing rapidly, and 180Protocol is a driving force.
180Protocol provides the foundational primitives of Intangible Finance. 180Protocol is a Layer 2 solution built to interoperate with the leading enterprise Layer 1 blockchains. It is the gateway for enterprises to IntangiFi. We offer enterprises the toolkit they need to engage and monetize their intangible assets safely and efficiently.
Privacy — intangible assets are highly sensitive, data especially so. 180Protocol offers businesses a means to engage their data within the intangible financial system, while assuring all private data remains private.
Tokenization — the foundation of liquidity is tokenization. Representing assets as either fungible or non-fungible tokens on-chain is critical to facilitating effective price discovery and liquidity in primary and secondary markets.
Functional NFTs — intangible assets often have rights and representations attached to them, and any digital intangible financial system must inherit an ability to manage them. 180Protocol’s Issuance SDK can custom enterprise-grade smart contracts to be embedded within NFTs that can monitor usage and pay royalties, among other things.
Integrations to DeFi — once intangible assets are represented securely and thoroughly on-chain, connectivity into the DeFi collateralized lending ecosystems will create opportunity for leverage, capital raising, and additional income streams.
Technology — enterprise solutions require enterprise standards, and 180Protocol is built to the highest enterprise standards using R3’s Corda and R3’s Conclave.
The potential of Intangible Finance is immense and the team at 180Protocol is excited to be building a piece of the financial infrastructure of the future. The pace of change is quickening, and the journey is just getting started.
