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During the past two years I’ve had the privilege of talking to many people interested in monetizing their illiquid assets.  People who own warehouses of gold bullion or entire provinces full of natural resources want to know if they can use them to back currencies on the BitShares network.

Of course they can.  It takes less than an hour to have _DawgPatchDiamonds_ trading internationally against hundreds of diverse assets.

However, it might take a bit longer to get someone interested in buying it!

You see, its no longer about engineering the technology to have your own asset backed coin.  It’s about engineering the trust.  I covered this theory extensively over a year ago in [Engineering Trust with Charles Hoskinson](https://steemit.com/bitshares/@stan/engineering-trust-with-charles-hoskinson) .

Asset backed currencies have counter party risk because the blockchain has no control over the actual assets.  The currency merely represents a _promise_ that the issuer will redeem it for the backing asset or its equivalent value.  If that asset is gold in the ground or timber on the hillside, how will the issuer redeem the token?  She has to go mine the gold or cut the timber!  This might not even be possible.  This is why few banks are willing to lend against assets so far from being liquid.  If they do, it’s for pennies on the dollar.  No bank wants to be in the mining or lumber business.  It’s as simple as that.

The same is true for crowdfunding, say, a new smartwatch.  Investors put up money now for a smartwatch later, after it’s developed.  There are risks that it will never be developed or that the issuer will disappear with the money.  The risks are exactly the same as gold in the ground or standing forests on the Serengeti.

Thus, unrealized promises are hard to use to back anything.

### Enter BitShares and the Hero

Since I’ve had so many people ask me for it, especially the leaders of scores of indigenous nations with great natural wealth, I decided to invent a solution.  It’s still in development, but I think it has promise.  Let me know what you think:

It derives from the same technology used to offer the Hero.  You use your lunch money to buy BitShares, then lock them up in escrow to borrow Heros.  You spend your Heros on lunch while your BitShares continue to appreciate.  Of course, this only works if BitShares go up in value.  If it goes the other way it will eat your lunch.

But coming up with ways to ensure that BitShares continues rising forever is the subject of another post – or read all about it at [sovereignhero.com](sovereignhero.com), where I spill the beans on the whole thing…

***Here’s the easy 9 step way to issue an asset-backed token on the BitShares network:***

1.	Explain these steps to your customers.
2.	Sell them the token.
3.	Use the proceeds to buy BTS.
4.	Borrow Heros by locking up the BTS in escrow.
5.	Hire a reputable third party to hold the keys to the escrow account.
6.	Spend the borrowed Heros to develop the product, mine the gold, etc.
7.	When the product is available, deliver it in exchange for the token.
8.	Regain access to the escrow from the reputable third party
9.	Enjoy your profit from fulfilling your promise to deliver your product.

And you have the leveraged appreciation of that escrow account for the entire time you were producing your product.

In the event you fail to deliver your product by a specified time, the escrow agent cashes in your escrow and gives it to your investors instead of the failed product.   

Thus, BitShares can be used to transparently back a risky asset-backed currency.  

We even thought up a catchy slogan:

<center>**DawgPatchGold**</center>
<center>Backed by Gold</center>
<center>Insured by BitShares</center>

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