Solution Design
Fermion is the universal platform for fractionally tokenizing and trading any verified physical real world asset.
Fermion is the foundational primitive for verified physical RWAs within the Boson x Fermion Physical RWA super-system: Web3’s open infrastructure for tokenizing and exchanging any physical real world asset.
Within this super-system, all real world assets are first tokenized via the Boson base layer. The assets tokenized as Boson redeemable NFTs can then be natively fractionalized and verified using Fermion. Fermion (fractional) F-NFTs can then bridge into DeFi to access liquidity and demand.
But this multi-trillion-dollar crypto opportunity can only be achieved by building the technology to bring all assets onchain, including RWAs.
Read more in a recent academic paper co-authored by Fermion Protocol co-founder Justin Banon and blockchain economist Prof. Jason Potts: ”Digital Institutions Create Wealth by Increasing Economic Computational Complexity”.
Boson already provides the foundational infrastructure for bringing commerce RWAs onchain. Boson is now product complete and entering mass adoption phase with major integrations with 38% ecommerce market leaders like WooCommerce.
Boson’s founding vision was: "To be the world's open, public infrastructure layer for commercial transactions and their data ". In contrast, Fermion addresses the challenge of bringing on-chain billions, possibly trillions, of dollars of illiquid physical RWAs).
If Boson represents basic plumbing, then Fermion functions more like a pump.
The tokenization of RWAs will form the backbone of the next bull run and unlock the transfer of trillions of dollars of value into crypto.
To quote BlackRock CEO Larry Fink: “The next generation for markets, the next generation for securities, will be tokenization of securities.”
Read more in our Co-founder Justin Banon’s Coindesk article:
Digitally native RWAs
Financial assets like cash, stocks and bonds can, relatively easily, be fully represented in a natively digital way without requiring any physical element, like paper certificates or banknotes. As such we expect that more traditional financial entities will continue to lead the tokenization of this segment of RWAs.
Physical RWAs
In contrast to digitally native RWAs, physical real world assets contain a physical element which cannot natively reside on blockchains and which will always require a mechanism for settlement in the real world. This hard problem of tokenizing physical RWAs is one which we are expert in, and we will continue to tackle with general purpose solutions. Physical RWAs include:
The market size for collectibles was estimated at $458.2 billion in 2022 and is projected to surpass $1 trillion by 2033, across all collectible products.
The verified physical RWA market is adjacent to commercial goods, and yet requires a fundamentally different exchange mechanism and economic model. Verified physical RWAs are physical real world assets with a high-verification requirement which can be met by trusted verifiers and custodians.
High-value commerce items, including collectibles, art, jewellery and luxury wine, are tangible items that are often highly sought after for their rarity, historical significance, condition, demand, and other unique characteristics. They are a core segment of the verified physical RWA market and represent an alternative investment class to traditional financial assets like stocks, bonds, and real estate.
We have chosen high-value commerce as the launch market for Fermion. However, this market is much larger, as it includes any physical asset requiring verification, such as commodities and real estate. This scale offers an opportunity to build the general purpose infrastructure for bringing onchain trillions, of dollars of illiquid, physical RWAs.
Fermion’s exchange mechanism leverages trusted third parties to verify and custody assets, in order to enable maximum capital efficiency.
With Fermion, the seller is paid upon verification, this process is capital efficient and can support tokenization of an indefinite duration.
Fermion NFTs will conform to the emerging ERC-404 standard so buyers can purchase fractions of the underlying NFT as ERC-20s which can trade on exchanges, benefiting from interoperability and price discovery.
We will bootstrap the network via a token incentive program for Sourcerers to: source supply from offchain sellers and then upload inventory to the network.
Earn $FMION rewards by becoming a Sourcerer. Sourcerers are agents who are incentivized to bring onboard supply, Sellers, Verifiers and Custodians. It rewards $FMION to participants who bring onboard Sellers, Verifiers and Custodians; who grow the Fermion network.
