[Whitepaper] Secondary markets for dynamic Assets
This whitepaper expands on the vision of what BukProtocol intends to achieve and how.
Last updated
This whitepaper expands on the vision of what BukProtocol intends to achieve and how.
Last updated
In today's rapidly shifting landscape, where flexibility and convenience are becoming central to the way we live, people are demanding more adaptable solutions. Whether it’s changing travel plans, last-minute events, or lifestyle adjustments, consumers are no longer satisfied with rigid systems that don't account for unpredictability. Many such services and assets carry inherent expiration dates—whether it’s hotel room reservations, event tickets, airline bookings, or even seasonal passes. The existing systems for these real world experiences often lead to wasted opportunities when they go unused due to unforeseen changes in plans, leaving both users and service providers at a loss.
The global travel industry, valued at over $1 trillion, represents an enormous market. However, it’s estimated that around 15% of all bookings—end up being canceled or unused. This translates to a staggering $150 billion in untapped value.
These rigid systems offer no easy recourse to these dynamic RWAs, resulting in assets like hotel rooms, event tickets, and reservations going unused, leading to inefficiency, lost value. Moreover, the absence of secondary markets for these assets further exacerbates the issue, as users have no viable option to recover their spends. Although access to these assets/experiences has improved, with countless platforms facilitating easy bookings, the value of these assets is typically locked in once purchased, with minimal options for recovery.
This challenge is widespread. From travel bookings to event tickets, countless assets fall into disuse each day, leading to frustration and financial losses for users.
This lack of flexibility in managing such real-world assets means missed opportunities to recapture value, turning what could have been fluid and adaptive transactions into a source of economic waste. This represents a significant gap in the market—one that could be addressed through enhanced liquidity and flexibility.
The global economy is brimming with real-world assets and experiences, from travel bookings to event tickets, hotel reservations, and prepaid services, all carrying significant value. We refer to these as Dynamic RWAs, assets that are time-sensitive and lose value if not used within a set timeframe.
Tokenization offers a powerful solution by transforming these assets into digitized tokens, providing liquidity, flexibility, and interoperability—traits lacking in today’s systems.
The global tokenization market was valued at $310 billion in 2022 and is projected to grow to $5.6 trillion by 2026, with some estimates, like BCG’s, forecasting a staggering $16 trillion by 2030. Many believe these figures are conservative, as mass adoption and consumer use cases for tokenization, especially in industries like travel, hospitality, and entertainment, are just starting to unfold.
In these sectors, time-sensitive assets often go unused due to rigid systems. Tokenization not only makes these assets tradable but also unlocks new value, offering flexibility and ensuring that they don’t go to waste.
Today’s institutions & B2B businesses across the hospitality, entertainment industries are illiquid and archaic, increasingly seeking flexibility in how they manage and interact with their underlying assets - Physical and ephemeral. For rest of this document we will be referring to Ephemeral assets, rather than physical assets. Just as consumers now expect customizable experiences—from curated content on streaming services to custom solutions—institutions also require greater control and adaptability in their asset management.
Whether it's managing bulk travel bookings, reallocating event tickets for corporate events, or optimizing prepaid services for large-scale clients, the current rigid systems governing these assets no longer meet the needs of modern institutions. These organizations require the ability to adjust, transfer, or resell assets as business demands evolve, but are often limited by outdated rules..
The real-world asset space remains highly fragmented, with assets typically siloed within individual platforms. A block of hotel reservations secured on one travel platform cannot easily be transferred or sold across other systems. Similarly, corporate event tickets purchased through one provider are often locked in, with no flexibility to trade or reallocate. And this lack of flexibility is sometimes constrained not just due to archaic policies, but due to lack of interoperability, which leads to minimized benefits that do not justify the additional efforts. This lack of interoperability hampers efficiency and limits opportunities for parties involved to optimize their operations and unlock additional value.
Introducing flexibility is not just about convenience—it’s about unlocking the value trapped in these assets and giving consumers more control over what they own. And flexibility here takes varying shapes based on stakeholders, for travelers its about flexibility and ease of travel and planning, while for industries, this flexibility translates to liquidity and increased cashflow easing working capital requirements.
BukProtocol aims to solve this problem by introducing tokenization— converting dynamic RWAs into digital assets/placeholders that can be easily bought, sold, transferred, or traded. Through BukProtocol, these assets become transferable NFTs, which represent the actual booking or ticket but with the added flexibility of being resold or transferred with minimal friction.
For example, consider a traveler who has booked a hotel room for a specific night but can no longer make the trip. Through BukProtocol, that booking can be instantly tokenized into an NFT. This NFT, now a digital representation of the booking, can be listed on a secondary market for resale—either on the same platform or across multiple platforms, thanks to the cross-ecosystem nature of blockchain.
While for a hotel or event organizer, selling these bookings and tickets, ahead of time, to a market willing to trade and transfer it, brings in more liquidity and cash flow.
The market is primed for a solution that can bridge the gap between the rigid nature of RWAs and the demand for liquidity, flexibility, and interoperability.
BukProtocol tackles these challenges by providing a unified platform for dynamic asset management. Using blockchain, smart contracts, and decentralized protocols, it enables sourcing, tokenizing, and distributing digital assets across industries. With features like an aggregated inventory model and a transaction fee revenue model, BukProtocol streamlines asset management, enhances transparency, and opens new revenue streams for asset owners and distributors.
In the following sections, we delve deeper into BukProtocol's core components, technical architecture, tokenomics, use cases, and go-to-market strategy, highlighting its potential to revolutionize dynamic asset management and drive innovation in the digital economy.
More details on the detailed architecture available here: https://docs.bukprotocol.io/buk-protocol-v2/components-of-buk-protocol
Lego Block Composable Architecture (LBCA)
Inspired by Lego's modular design, this approach offers businesses unmatched flexibility to adapt BukProtocol to their specific requirements. BukProtocol's core features a Lego Block Composable Architecture, enabling users to customize and integrate platform components as needed
BukProtocol’s dynamic asset management offers significant benefits across various industries:
Event Ticketing: BukProtocol ensures ticket authenticity and prevents fraud through tokenization, allowing secure resale and transfer on a transparent platform, while addressing inventory management and scalping issues.
Membership Subscriptions: For services like streaming or fitness memberships, BukProtocol provides a decentralized method to tokenize and manage recurring assets, enabling seamless access for users and predictable revenue for businesses.
Travel and Hospitality: By tokenizing hotel bookings and airline tickets, BukProtocol enhances transparency and efficiency. It allows travelers to benefit from reliable, blockchain-backed transactions and enables asset owners to monetize unused inventory through secondary markets, transforming asset management and creating new revenue streams
Problem: Event organizers face challenges in managing ticket inventory, preventing scalping, and ensuring a fair distribution of tickets to fans.
Solution: BukProtocol collaborated with a major event organizer to tokenize event tickets on its platform. Each ticket was represented as a non-fungible token (NFT), ensuring its authenticity and ownership. Through smart contracts, the organizer could enforce ticket sale rules, such as maximum purchase limits and transfer restrictions, reducing scalping and ensuring fair access to tickets. Secondary market transactions were facilitated on BukProtocol's marketplace, allowing ticket holders to resell or transfer tickets securely.
Problem: The travel and hospitality industry struggles with managing hotel bookings and airline tickets, leading to high distribution costs, overbooking and revenue loss.
Solution: BukProtocol partnered with a leading hotel chain to tokenize hotel bookings on its platform. Each booking was represented as an NFT, ensuring its authenticity and ownership. Through smart contracts, the hotel chain could automate booking management processes, such as cancellations and refunds, reducing administrative overhead and improving efficiency. Secondary market transactions were enabled on BukProtocol's marketplace, allowing travelers to resell or transfer hotel bookings securely, creating new revenue opportunities for the hotel chain.
Dynamic digital assets, characterized by elements such as expiration dates, time-sensitive validity, or variable usage parameters, present unique challenges and opportunities across industries. From gaming items that degrade with use to event tickets that lose value after the event date, the management of dynamic assets requires specialized solutions to ensure efficiency, transparency, and trust.
While precise data on the prevalence and market size of dynamic digital assets is currently unavailable, their ability to drive revenue and enhance user experiences. The gaming industry alone is projected to generate 700bn USD by 2030, indicating the immense value of dynamic assets in this sector cannot be overstated. Industries such as gaming, event ticketing, and travel rely heavily on dealing with “assets”/”access” which are time bound.
The management of dynamic assets poses several challenges for businesses and consumers alike:
1. Fragmentation: The fragmented nature of dynamic asset management across industries leads to inefficiencies and inconsistencies. Different platforms may use disparate systems for asset tokenization, distribution, and consumption, resulting in a disjointed user experience and increased transaction costs.
2. Lack of Transparency: Traditional asset management systems often lack transparency, making it difficult for asset owners to track the lifecycle of their assets or verify their authenticity. This opacity can lead to trust issues and disputes among stakeholders, hindering the growth of dynamic asset markets.
3. Revenue Leakage: Inefficient distribution channels and inadequate monetization strategies can cause revenue leakage for asset owners. Without proper mechanisms in place to capture and capitalize on secondary market transactions, asset owners may miss out on valuable revenue opportunities.
Dynamic assets manifest in various forms across industries, each presenting its own set of challenges and opportunities:
1. Event Ticketing: Event tickets are classic examples of dynamic assets with expiration dates. Once an event has passed, the value of the ticket diminishes significantly. Managing ticket inventory, ensuring fair distribution, and facilitating secondary market transactions are critical challenges faced by event organizers and ticketing platforms.
2. Travel: Travel bookings, including hotel reservations and airline tickets, also exhibit dynamic characteristics. A hotel room booking expires after the check-in date, while an airline ticket loses value once the flight has departed. Dynamic asset management in the travel industry involves optimizing inventory, managing cancellations and rescheduling, and facilitating seamless transactions across multiple channels.
The $BUK token functions as the platform's native currency, enabling transactions, encouraging participation, and playing a crucial role in governing the ecosystem. Let's explore the core elements of BukProtocol's tokenomics:
The $BUK token is poised to be the driving force behind the BukProtocol ecosystem, drawing inspiration from the premium model of the web2 ecosystem. Unlike the conventional travel industry, BukProtocol aims to evolve with the changing times and embrace radical modernization to stay ahead of the curve.
BukProtocol acknowledges the importance of inclusivity and will offer certain features to the general public without requiring them to hold $BUK tokens. However, to access advanced and premium features, users will need to engage with the $BUK through usage, burning, or staking mechanisms.
By adopting this model, BukProtocol ensures that users have access to essential functionalities while incentivizing token engagement for enhanced benefits. As consumer behavior and the ecosystem evolve, the true utility of the $BUK token will emerge, driving its value and significance within the platform. Utility listed in the below sections could be activated by staking/holding of $BUK, or use of $BUK during the transaction, based on individual scenarios.
BukProtocol's ultimate goal is to revolutionize the travel ecosystem, and it vows not to repeat the mistakes of a stagnant industry. Instead, BukProtocol embraces agility and adaptability, ensuring it can swiftly respond to changing market dynamics and cater to the needs of its users effectively. So all utility listed here are illustrative and will constantly evolve to ensure dynamism and growth.
Through this approach, BukProtocol seeks to become a transformative force in the travel industry, ushering in a new era of convenience, efficiency, and accessibility. The $BUK token will be at the core of this metamorphosis, powering the platform's growth and encouraging active participation from all stakeholders.
Longer Listing Windows on BukProtocol, Beyond 3 Months: Asset Owners (Hoteliers, Event Organizer, Airline Operators) who hold and utilize $BUK tokens will gain the advantage of longer listing windows for their assets on the BukProtocol. While standard listings might be limited to a fixed duration, token holders can extend their listings beyond the regular timeframe. This extended exposure will allow asset owners to attract more early buyers, increase bookings, and maximize their property's visibility on the platform.
Longer Trading Windows on BukProtocol enabled platform, Beyond 3 Months: In addition to extended listings, Asset owners holding $BUK tokens can benefit from longer trading windows on the BukProtocol enabled platforms. Traditional trading windows might be limited to a specific timeframe, but token holders can access extended periods for offering their room inventory. This flexibility enables asset owners to optimize their revenue streams by leveraging the BukProtocol platform for an extended period, even during peak demand seasons.
Access to Enable the Rebuy Functionality for the Asset owner: $BUK token holders will be granted access to enable the "rebuy" functionality for their asset listings. This innovative feature allows asset owners to have control on first right of refusal to any secondary market transactions. Asset owners can choose to control how much inventory flows into the secondary market, by “ReBuying” the assets before it hits the secondary markets.
Listing Additional Differentiating Details on the Content Platform: Asset owners who actively participate in the BukProtocol ecosystem using $BUK tokens gain the privilege of adding more differentiating details to their property listings on the content platform. These additional details could include exclusive amenities, unique experiences, personalized packages, or other enticing features that set their properties apart from competitors. By offering more comprehensive and tailored information, asset owners can attract discerning travelers and stand out in a crowded market.
Governance Rights: To encourage asset owners to hold and use $BUK tokens, the platform will introduce a governance mechanism. Token holders who meet a specific token holding threshold will gain voting power proportionate to their holdings. They will have the opportunity to participate in voting for platform-related proposals, such as upgrades, feature additions, or fee adjustments. This will provide them with a voice in the platform's development without implying $BUK tokens as securities.
Enhanced Data Insights: Asset owners actively utilizing $BUK tokens will be granted access to advanced data insights and analytics. These insights will offer valuable information about their property's performance, booking trends, customer demographics, and other relevant metrics. This data-driven advantage aims to empower asset owners to make informed decisions to enhance their offerings.
Early Access to New Features: Asset Owners actively using $BUK tokens will receive early access to new features and enhancements before they are made available to the wider user base. This will enable them to stay ahead of competitors, adapt their strategies in advance, and provide unique experiences to travelers. This incentive encourages proactive use of the platform without portraying $BUK tokens as securities.
Access to Inventory Beyond Specific Trading Windows: Token holders gain the advantage of accessing hotel room inventory beyond the standard trading windows, which may be limited to a certain period (e.g., three months). This extended access allows them to secure hotel rooms during peak seasons or exclusive events, providing more flexibility and opportunities for profitable transactions.
Access to Blacklisted Premium Dates: Grant early access to exclusive travel deals and promotions to travel agents and distribution partners based on their $BUK holdings. This early access provides them with a competitive edge and the opportunity to offer unique and attractive deals to their customers, driving demand for their services and encouraging higher token holdings.
Guaranteed allocations during high-demand periods, resulting in increased revenue potential for traders, travel agents, and distributors.
Reduced/Zero Fees for Traders while Buying: Traders who hold and use $BUK may enjoy reduced or zero fees while buying hotel room inventory through the distribution platform. This fee reduction can significantly enhance profit margins for traders, providing a cost-effective and competitive advantage in the marketplace.
Access to Advanced Products - Futures, Options, Put & Call Options Exercising: $BUK holders can access advanced trading products such as futures, options, and put & call options. These sophisticated financial instruments enable participants to manage risks effectively and hedge against potential market fluctuations. Having access to such products empowers traders to diversify their trading strategies and optimize their investment decisions.
Security Deposit to Unlock Advanced Trading Features: $BUK can be utilized as a security deposit to unlock advanced trading features on the distribution platform. By staking a certain amount of $BUK, traders, travel agents, and distributors can access premium tools, advanced analytics, and personalized services that enhance their trading capabilities and market insights.
For participants interested in reselling tokenized inventory from the BukProtocol to their own B2C OTA platforms, holding $BUK can serve as a deposit to gain whitelisting access. This privilege allows them to list and offer tokenized hotel room inventory on their own B2C OTA platforms, broadening the distribution channels and reaching a larger audience of potential customers.
The distribution of $BUK tokens is carefully planned to ensure a fair and equitable distribution among stakeholders. The initial token distribution includes allocations for:
Founders and Team: Tokens allocated to the founding team to incentivize long-term commitment and align interests with the success of the platform.
Advisors and Partners: Tokens allocated to advisors, strategic partners, and early supporters of the project for their contributions and expertise.
Community and Ecosystem: Tokens allocated to community initiatives, ecosystem development, and user incentives to foster growth and engagement.
Token Sale: Tokens allocated for public or private token sales to raise funds for platform development and operations.
The $BUK token's economics are crafted to promote sustainable growth and stability within the BukProtocol ecosystem. Key factors like token supply, velocity, and demand-supply dynamics are managed to ensure a balanced token economy.
Governance mechanisms allow token holders to influence decisions on protocol upgrades and community initiatives through transparent processes. BukProtocol will integrate with both web2 and web3 systems, abstracting blockchain elements for users while retaining the benefits of blockchain, such as security and decentralized governance. This ensures smooth integration with existing systems and enhances accessibility while maintaining platform integrity
BukProtocol is initiating the journey towards a decentralized distribution for the travel industry. We do not believe that the industry is ready for 100% decentralization. The presence of physical properties and varied range of consideration about the property and real world implications constrain ability to go a 100% decentralized on day one.
We will introduce the concept of decentralized governance for the first time in the industry, in a way that it doesn't alienate any particular segment and has equal representation. BukProtocol proposes creation of a Governance council with equal representation across hoteliers, travel distributors and the travelers itself.
The governance council composition will be of
a. Industry Representatives: The Industry Representatives will consist of individuals or entities representing property owners, event organizers, travel companies, brand owners, and asset managers within the BukProtocol ecosystem. These representatives will advocate for the interests and needs of the hotelier community, ensuring that platform decisions align with their specific requirements and concerns.
b. Distribution Ecosystem Representatives: The Distribution Ecosystem Representatives will include representatives from travel agents, bed banks, distributors, and other intermediaries between hotels and end consumers. They will bring insights from the distribution ecosystem, ensuring that decisions are made with the understanding of how the platform affects their operations and relationships with hotels and travelers.
c. Travelers, Token Stakers & community Representatives: The Travelers, Fans, Token Stakers & community Representatives will represent the interests of travelers who use the platform, token holders who actively stake and participate in governance, and the broader community. These representatives will voice the perspectives of users and community, advocating for their experiences, feedback, and interests within the BukProtocol ecosystem.
The decision making process for any proposal will follow the steps outlined
a. Proposal Submission: Any member of the Governance Decision Council can submit proposals on behalf of their respective groups or on general platform matters. Proposals may include enhancements to platform features, changes to the token utility, new initiatives, or any other relevant topics.
b. Review and Discussion: Upon proposal submission, the Governance Decision Council members will engage in a thorough review and discussion period. They will analyze the proposal's potential impact on each group's interests and consider the overall benefit to the BukProtocol ecosystem.
c. Equal Voting Power: During the voting phase, each representative will have an equal voting power, regardless of their group's size or influence. This ensures that no single group dominates the decision-making process and that each perspective is given equal consideration. Voting of KYCed members will only be considered to avoid any collusion.
d. Quorum Requirement: To ensure meaningful participation, a quorum requirement will be set. This ensures that a significant number of representatives from each group must be present and actively vote for a proposal to be valid.
e. Transparent Voting Results: Voting results will be transparently recorded on the blockchain or an auditable platform, ensuring accountability and visibility of the decision-making process.
Inclusive Discussions and Feedback:
a. Community Forums: In addition to the Governance Decision Council, community forums and communication channels will be established to allow broader participation and feedback from the platform's users and stakeholders.
b. Surveys and Feedback Mechanisms: Regular surveys and feedback mechanisms will be employed to gather input from travelers, token stakers, community, hoteliers, and the distribution ecosystem. This will provide valuable insights for the Governance Decision Council's discussions and decision-making processes.
For consumers, this results in wasted money and missed experiences
For businesses, it leads to empty seats, unfulfilled customer, and lost additional revenue opportunities via cross-selling
Sourcing of Assets
BukProtocol acquires dynamic asset data via API integrations with industry-specific sources. Partnerships ensure high-quality data, and onboarding includes strict quality checks.
Tokenization
Sourced assets are converted into NFTs, each customized to reflect asset specifics like expiration, usage, and industry metadata. Smart contracts ensure trust and transparency.
Distribution
Marketplace smart contracts facilitate asset transfer (P2P, B2B, B2C). The aggregated inventory model enhances liquidity, and white-labeled marketplaces simplify distribution.
Consumption
User-friendly interfaces enable browsing, purchasing, and trading of tokenized assets. Modular architecture allows seamless integration, and whitelabel solutions speed up deployment.
Modularity
BukProtocol's architecture consists of modular components like sourcing engines, tokenization engines, and marketplace smart contracts, allowing businesses to create custom configurations.
Composability
Users can modify existing components or build new ones, integrating third-party services or adding features, ensuring the platform adapts to industry trends and regulations.
Interoperability
Components easily integrate with external systems, allowing seamless data exchange and workflow integration, maximizing existing tech investments while using BukProtocol's advanced features.
Scalability
The modular design enables easy expansion or downsizing, supporting growth and increasing transaction volumes, making it suitable for startups to large enterprises.
