We are happy to announce that Max Zheng has been appointed as Strategy Advisor at Amazing Blocks. He previously worked in the Business Development Department and as Project Lead after joining prior to official foundation. He is highly skilled in portfolio management, has founded and advised various startups and has been part of the blockchain space since the early days. Additionally, Max provides in-depth knowledge on tokenization with a special focus on real estate - one of the most demanded use cases in the contemporary market. Therefore his expertise and strategic advice will help us foster future growth for Amazing Blocks. - Author: Nicolas Weber
Nicolas: First of all, congratulations on your new role, Max and thank you for taking the time for this interview. You have been appointed as Strategy Advisor at Amazing Blocks. Would you like to start by telling us a little bit about your time prior to Amazing Blocks?
Max: Thanks Nicolas for having me. I am very excited to start my new role as Strategy Advisor because it will certainly give me new and challenging responsibilities to learn from. As for my time prior to Amazing Blocks, besides my genuine interest in blockchain technology, I have founded my own startups in the e-commerce sector and worked as a pro-bono consultant. As interesting and challenging as these projects were, I felt like seeking for something more challenging and innovative. And this was the time I took a class in university that was taught by Professor Philipp Sandner. This class inspired me to dive deeper into blockchain-based business opportunities.
Nicolas: Very interesting, Max! What were the main arguments that led to your decision to pursue a career in blockchain?
Max: Back then, the market was just not ready yet. Today we can observe a very different situation. With big names such as Paypal, Microstrategy and others joining the game, I think blockchain is getting more and more interesting. A lot is happening in this very new industry and I definitely want to be in the game.
Nicolas: Which assets do you find particularly exciting in regards to tokenization and why?
Max: In order to learn more about this area, I actually researched and discussed the tokenization of real estate in a research project. During my research, I found that blockchain technology can hugely contribute to a more efficient market system. The idea of tokenization can enable accessibility and greater liquidity in the market and thus contribute to a more democratized state of investing in any sort of asset and especially high entrance barrier investments.
Nicolas: Let’s talk a bit more about the real estate use case! Do you see a future where all properties will be tokenized and if so, how will this transition play out?
Max: Definitely! Among the interesting use cases, real estate can definitely be counted in the upper area. As such a big asset class with so many inefficiencies, namely, slow transaction speed, high transaction costs, high intransparency and of course, a big lack of liquidity, blockchain might be a game changer. Or rather, blockchain is a game changer. I think blockchain technology will disrupt the current market and I believe that the future will shift to major parts in real estate being tokenized because of all the benefits it brings. Now concerning the transition, it is very clear that today we can already observe major changes in the market. Not only do large players show acceptance towards this new and innovative technology but also from a regulatory perspective, we can observe fundamentals being established. MiCa is a pretty good example of regulatory adjustments within the European area. If MiCa is set, European countries can adjust their laws accordingly and once there is some sort of standard and once acceptance rate goes up, service providers will find a place to do business and all participants of the real estate investing process chain will find an entrance point. In summary, the challenge will be to establish a regulatory standard only then a critical mass of business activity can be reached and then we can finally see the real benefit of tokenization.
Nicolas: Thank you for the insights! What effect will the tokenization of real estate have on renting owned real estate properties? Can the income also be distributed via blockchain to the shareholders?
Max: Good that you bring up this point. I think one of the most important features of blockchain is the concept of smart contracts because here we can convert income distribution to the blockchain sphere. Moving back a little bit, a smart contract is essentially a digital contract. In this digital contract predefined terms are outlined and programmed into a code. In the example of income distribution, the trigger would be things such as the due date of rent payment. So once rent is paid, the smart contract then distributes the profits among all shareholders. Now, if you look at this process alone, you can already see that there is the potential to cut out costly intermediaries. However, this is just one use case, there are still many interesting use cases in the field of transparency and other models of profit distribution.
Nicolas: How can liquidity be optimized in this space?
Max: Essentially, the result of tokenization will be increased liquidity within this market. Tokenization allows fractionalization to very very small parts and therefore anyone could own a small piece of an asset. Whether or not this makes sense is another issue but it is important to understand that blockchain makes the multiplication of asset ownership very efficient and more importantly, scaleable. Now having the possibility to offer such small pieces of ownership, the range of potential investors can be much broader since entrance barriers can be lifted. From maybe a minimum investment sum of 50.000€ one can join the investment opportunity with just 100€. And this precisely, can lead to greater liquidity.
Nicolas: What are and have been the biggest influences in your life?
Max: For me, the most important factor that has shaped me and my career were the people around me. Having supportive friends and loved ones always believing in me has been huge. Sometimes, it just takes a nudge on the shoulder for someone to fully show his potential.
Nicolas: What is it you are most looking forward to when you think about 2021 with Amazing Blocks?
Max: 2021 will be a very interesting year. I look forward to the establishment of a regulated exchange so that the idea of tokenization can fully take off. With an effective secondary market, liquidity can really be increased and we will be able to step up our game.
Nicolas: Thank you for this amazing interview!
Max: Thanks to you too, Nicolas!
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Amazing Blocks offers a tokenization solution that enables its clients to tokenize various assets according to the Liechtenstein Token Act (software-as-a-service). The software covers both the issuance of tokens and investing in tokens. It suits the needs for tokenizing all kinds of assets (e.g. machines, cash flow generating contracts, trademarks, real estate, cars). Imagine that some asset should be tokenized. For this asset various tokens would make sense: Equity tokens, debt tokens, participation rights as tokens, ownership tokens, or any mixture of these tokens. The software of Amazing Blocks helps issuers to handle multiple assets and to issue multiple tokens for these assets. This is possible by integrating blockchain technology with the law (that is, the Liechtenstein Token Act). At the core, there is the "digital legal entity in Liechtenstein" based on “tokenized shares” which allows a very efficient foundation, a very efficient operation of the company and, thus, an efficient and flexible possibility to tokenize assets. This should now make a wide variety of tokenization projects possible, because the costs for tokenization are significantly reduced.
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Our software helps to tokenize shares of legal entities in Liechtenstein. But we do not provide custody or token generation services.
Liechtenstein made the first move. With the quite new Token Act, it is now possible to found digital legal entities based on tokenized shares. The Liechtenstein Token Act allows any right or asset to be tokenized such that it can easily be traded or transferred.
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