What Is Real Estate Tokenization?

real estate tokenization

This time we will talk about the tokenization of real estate assets, and it is in the last months of the year that the glory of digital assets has expanded exponentially, transforming economic models and forms of marketing in the markets. Related to this is the creation of non-fungible tokens or NFT assets as a sales model that has completely changed the landscape. Ever since artist Beeple sold his NFT for $69 million at the prestigious Christie’s auction house, the technology has come to dominate various fields, transforming a traditional model into digital models. .

To this end, the real estate market has begun to adapt to this new change by creating a model capable of representing what was previously a physical asset into a token through the process of tokenization.

Now how is this possible? First, we need to understand what real estate tokenization is.

As you know, tokenization is a relatively new concept in which the Investor uses the advantages of blockchain technology to securitize and trade their assets in the secondary market, which provides liquidity and transparency of transactions.

Thus, the tokenization of real estate assets refers to the creation of a token that represents physical real estate. This concept differs from non-fungible tokens in that a real estate asset is linked to the value of a physical asset. Now you can check the best real estate tokenization details at digishares.io

Benefits of real estate tokenization

  • Optimization and increase in the speed of transactions for the purchase and sale of assets.
  • Eliminate service provider costs.
  • Vmite commercialization of assets in the secondary, safe and transparent market.
  • Provides early access to real estate projects.
  • Asset security is provided by Blockchain technology.
  • To get liquidity from investing an asset.
  • It is not necessary to complete a real estate project in order to recoup the investment. The user can sell his tokens on the secondary market at the desired price.

“They reduce risk because their value is backed by physical possessions.

How to tokenize a property?

The first step for an investor who wants to tokenize their assets is to create a real estate token on the blockchain. In the case of Ethereum , an ERC20 token or security token is used to represent the actions of an asset. The number of tokens created will depend on the value of the physical asset, so the total value of the tokens must be the total value of the physical asset.

The next step is to sell the token. After the token sale, investors must participate in the exchange so that they can conduct transactions with their tokens. Currently, there are a large number of crypto currency exchange programs that are gaining demand and popularity. However, you can also work with the Alternative Trading System (ATS), institutions that partner with asset holders of security tokens capable of providing access to the secondary market.

The Future of Real Estate Asset Tokenization

In the short term, as the adoption of blockchain technology and crypto currencies continue to grow, their adoption in organizations and companies creates new emerging markets focused on innovation and modernity. The real estate sector, valued at more than $228 billion, is one of the most popular investment destinations, thanks to blockchain technology; real estate assets enter the foreign trade market, both for large organizations and small investors.

In this regard, this new technology is giving way to opportunities where users and investors can buy and sell with minimal investment. , with their own decisions regarding their assets with the possibility of increasing liquidity at their discretion.