How Much Money Does Tokenisation Actually Save? – Hacker Noon

There are a bunch of SaaS providers that sell subscriptions to crowdfunding operators. They work on a market mature enough so the supply and demand forces have already made the needed measurements for us. Some providers offer full services, whereas the above task is included as a set of APIs so an operator simply uses a specific accounting system in the cloud and pays regular fees. Some providers offer only basic services such as KYC, payment channels integration, and user UI so that the job described in the diagram needs to be done semi-manually or outsourced elsewhere.

To derive the figure for the cost of the function on the diagram, we should look at the pricing schemes of the two types of providers (full and basic) and deduct one from another. This gives us a ~$10k setup fee plus ~$50k annual fee. Those operators who don’t pay full-service providers still do the job internally; it naturally costs them some similar dollars, otherwise the market for the service wouldn’t be mature and stable. The cost doesn’t depend on investment volumes. It varies slightly based on the number of investors, but the average would stay in the same order of magnitude. It is not $5k annually and it is not $500k.

There are roughly 5,000 operators in the world. So we have global annual cost of $2.5*10⁸ (quarter of a billion dollars each year).

Now for the fun part. How much would the same task cost in a tokenised form? Eventually, zero! And to stay zero, it doesn’t even need to be standardized, in an ordinary sense. Tokens are tokens. They are interoperable by their nature. Remember that “obvious notion” we made above? That’s where the core difference lies. In normal centralised operations, the fees are forced repeatedly in time, onto each actor. In decentralised form, it is some few pioneers who bear the costs; the followers will pay less and less until the entire business function becomes a commodity.

read original article here