Understanding Location Swap
Location swap refers to the process of exchanging asset-backed tokens on a blockchain while keeping the physical goods in their original locations.
Asset-backed tokens represent claims to real-world physical goods, describing various properties of the asset, including its dimensions and current storage location.
If two tokens are identical in all aspects except their storage location, swapping one token with another means that the holder has changed the location from which they can redeem the underlying asset.
Efficient Asset Transfer Without Physical Movement
It’s important to note that the physical goods themselves, which are the backing for the tokens, remain unaffected by the swap and stay in their original locations.
Only the ownership of the tokens, representing the claim to the assets, is transferred.
Location swaps are particularly useful in a global economy as they can reduce transportation costs and prevent product shortages by optimizing the utilization of goods already available at the desired location but not currently needed by their current owners.