Real Estate Tokenization
Tokenized property ownership and development.
Physical infrastructure such as Real Estate will be represented as crypto tokens that can be controlled and traded without intermediaries onchain.
Schema
Market
Tokenization will make it easier for anyone to invest to real estate assets, reducing price to enter the market, cutting out middlemen, and making valuable information more widely available.
Will network states enable citizens to own real estate across any nation state?
Benefits
Why tokenize real estate?
- Shared Governance
- Simplified Ownership Transfer
- Investment Liquidity
DAOs
Leverage Decentralised Decision Protocols to collaboratively own and manage real estate portfolios.
Ownership Transfer
- Legal transparency
- Engineering certification
- Financial rules
- Automate escrow
Investing
- Increased liquidity
- More control over investments
- More exposure to real estate assets and greater accessibility
- Increased efficiency for the operational side of the real estate industry
- More transparency amongst global financial networks
- Reduction in costs due to the removal of manual tasks and human involvement
Headwinds
Headwinds of RWA tokenization include:
- Regulatory uncertainty: The RWA tokenization sector is still new. There are many grey areas regarding its legality and regulation. The situation gets murkier when the transactions are cross-border.
- Skepticism: Some players in TradFi are hesitant to adopt the technology. The nascency of the technology and its attendant risks have been a put-off for some people in the industry.
- Technical challenges RWA tokenization faces composability and scalability issues. Blockchains have different architectures. For this reason, developing tokenization protocols with cross-cutting applications remains a challenge.
Process
How do you tokenize a real estate asset?
- Consult legal counsel
- Select assets to tokenize
- Partner with a qualified custodian
- Use omnibus accounting
- Work with tokenization provider
- Perform audits
- List tokens on exchanges
- Integrate with DeFi
Projects
Who is leading crypto innovation related to ownership and governance of property?
Links
What is the MIQ you should be asking yourself?