Here are some things a tokenized security could do:

• Keep track of the owner (and by extension, the whole cap table)
• Eliminate paper certificates
• Facilitate transfers
• Provide a history of transfers
• Drastically reduce cost of transfer agent services
• Provide for distributions with the click of a button
• Make capital calls with the click of a button
• Allow conversions (e.g., Convertible Note to equity) with the click of a button
• Provide reinvestment options
• Provide the K-1 or 1099
• Allow digital voting
• Carry up-to-date and historical information about the company, including financial statements and SEC filings
• Track the tax basis of the security
• Carry relevant documents, like an up-to-date Operating Agreement
• Provide an automatic listing on an exchange
• Integrate with all of the owner’s other securities, private and public, to provide a personal portfolio
• Provide a communication channel, including video conference calls and chat rooms, with management and other investors
• Provide information about the market and/or industry generally
• Provide instant analytics on standard metrics like ROI, IRR, and P/E ratio, and allow exports to Excel and other tools
• Compare returns to existing or new indices
• Provide links to other issuers with similar characteristics, with the opportunity to trade, buy, or sell
• Provide information about trading in the security by other owners, with alerts about trading by insiders

The way capitalism works, I suspect the first tokenized securities will include just a few features – those with the most sizzle and/or the easiest to implement – with more to come later.

Questions? Let me know.