Real estate has always been a fancy asset class for most people to have their hands in. This is justified by the fact that the global real estate market is projected to grow to $6.27 billion by 2030, fueled majorly by how people trade these assets. Experts predict that real estate tokenization could be one of the major elements dictating the growth of the relatively illiquid market, evidenced by the evolution of the market for tokenized RWAs, which includes real estate. Our blog will focus on how the tokenization of real estate can be a game changer for the global economy and how you can be part of an immense opportunity.
Table of Contents
Real Estate Tokenization: An Overview
Real Estate Tokenization Development: The Process
Advantages a Real Estate Tokenization Platform Brings
How Can We Aid You with the Tokenization of Real Estate?
Real estate tokenization is the process of tokenizing real estate assets on the blockchain. It first gained momentum during the ICO boom in 2017, when multiple ventures tokenized real estate properties. Although the domain comes with vast potential, the buzz around it has been a stop-start affair so far.
- The process aims to reduce (if not eliminate) the intermediaries involved in the traditional real estate market.
- Doing so can aid common people to invest in real estate without having to worry about long waiting times, lengthy and complicated documentation, and associated expenses.
- Still, blockchain industry experts predict a bright future for the industry, with the craze around tokenized real-world assets increasing in 2023.
If you are wishing to tokenize real estate assets, this section is for you. Real estate tokenization development is a rather complex process due to its dependence on several intermediaries (albeit lesser than number in those involved in conventional real estate).
- Structuring the Deal: The real estate tokenization process begins with structuring the deal. Factors such as legal implementations, target market needs, technological requirements, and marketing plans are discussed and finalized before kicking off.
- Digitization of Real Estate: The real estate asset to be tokenized is digitalized by converting its physical documentation into blockchain-backed digital files. Smart contracts play a prominent role in the creation of real estate tokens representing the documentation.
- Primary Distribution of Tokens: The tokens backing the property are distributed through a crowdfunding process known as Security Token Offering (STO) using decentralized exchanges (DEX) as the purchasing medium. All transactions are conducted automatically and data is recorded on the blockchain.
- Post-Tokenization Processes: After launching the tokenized real estate project, other utilities mentioned in the tokens should be offered to holders, including governance rights, and equities in profits. A proper execution of these processes will result in the brand value of the project and its tokens.
- Secondary Trading Provisions: Secondary trading provisions can be enabled for token holders by listing tokens on reputed crypto exchanges. If the project’s tokens have their prices appreciated due to brand value and utility, trading activity will boost the project’s prospects to new levels.
Do You Want to Tokenize Real Estate Properties for Business?
With prospects around a real estate tokenization platform for business becoming hot, it will be only wise to discuss the advantages these platforms bring. These applications come with a plethora of benefits that ease user experience while processing transactions quickly.
- Transparency: Platforms selling tokenized real estate assets offer utmost transparency as all transactions (primary and secondary) are recorded on the blockchain. People can view and verify transactions to ensure the authenticity of the tokens they had traded.
- Liquidity: Real estate has long been an illiquid market owing to high barriers of entry and lengthy processing times. With blockchain-backed tokenization, real estate transactions can be easily executed by people from all backgrounds.
- Fractionality: Tokenization platforms offer the facility for fractional ownership, where people can buy and trade tokens representing a fraction of the real estate property. The representative asset can even be tiny in size, making it easier for people to enjoy the benefits of real estate.
- Security: Real estate is one of the sectors most prone to scams in the form of counterfeit documents often that result in lengthy legal proceedings. With real estate tokenization, all data is present on the immutable blockchain ledger, and anyone trying to alter the information in anyway would find it incredibly resource-draining, rendering it useless.
If you’re someone aspiring to make real estate accessible to all or one planning to use blockchains to distribute your property to a huge pool of investors, you’re at the right place. As an established provider of services related to the tokenization of real estate, we bring you the highest quality in all aspects of the process.
- From setting up your business model’s anticipated roadmap to bringing you closer towards executing it, we do everything that is required for a successful project.
- With our formidable technological stacks, you can easily tap into 10+ major layer-1 and layer-2 blockchains, increasing the possibility of gaining the necessary foothold in the market.
- We don’t stop there – We offer continued support to ensure your blockchain-based real estate project achieves its novel goals, reaches the target markets, and serves the intended purpose.
Thus, we now have an overview of how real estate tokenization can be ideal as a business option. With more real estate projects turning towards blockchain technology, this should be the perfect time to set sail in the exciting industry. Who wouldn’t want to capitalize on an industry with an excellent purpose and a great business model? If you want to build a real estate tokenization platform, you can opt for our experienced real estate tokenization team. Our professionals can create applications catered to your unique requirements. What more are you waiting for? Get in touch with one of our experts to begin your new venture!