Real Estate

Tokenization

Tokenization is a recent innovation that promises to revolutionize the real estate industry. It uses blockchain technology to divide a real estate asset into multiple digital units, called tokens, which can be bought, sold or traded on a blockchain platform.

In few steps

Digitization of real estate assets

The asset is technically digitalized on the blockchain. This process involves assessing the value of the asset, creating a smart contract to manage it and defining the total number of tokens that will represent the asset.

The division into tokens

Once the asset is digitized, it is divided into multiple tokens. Each token represents a fraction of the real estate asset. For example, if a $1 million building is tokenized, it could be divided into 1 million tokens, each token representing 0.000001% of the building.

Marketing the tokens

The tokens are then sold to investors. These tokens can be bought and sold on blockchain trading platforms, allowing investors to buy and sell fractions of real estate assets in the same way they buy and sell stocks.

Legal management

Token holders have rights to the real estate asset in proportion to their number of tokens. These rights may include voting rights in the management of the asset, a share of the rental income or a share of the profits from the sale of the asset.

Examples

Office buildings

An owner of an office building could tokenize the asset to raise funds. The tokens could be sold to investors, who would receive a share of the rental income in proportion to the number of tokens they hold.

Residential housing

A real estate developer could tokenize a residential housing project. Investors could purchase tokens to finance the project, and receive a share of the profits from the sale of the units once the project is completed.

Agricultural cooperatives

A farm could be tokenized to allow visitors to become co-owners of the farm. They could use their tokens to book stays at the farm, buy fresh produce or participate in agricultural activities.

Inheritance

A family property can be tokenized to facilitate division among heirs. Each heir could receive a number of tokens corresponding to their share of the inheritance, and could choose to sell their tokens or exchange them for other assets.

Condominium

A residential condominium can be tokenized, allowing residents to own a fraction of the assets corresponding to their apartment. This could simplify the process of buying and selling apartments, avoiding the need for real estate agents and notaries.

Main advantages

Increased Liquidity

Tokenization facilitates quick transactions and opens the market to more investors, thereby increasing liquidity.

Fractionalization

Tokenization makes real estate investing more accessible by allowing the purchase of small fractions of an asset.

Transparency and Security

Thanks to the blockchain, tokenization offers greater transparency of transactions and enhanced security.