Tokenize Real Estate
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Tokenize Real Estate
A luxury Manhattan condo development is getting a new digital home on the worldwide Ethereum blockchain. The building, a completed 12 unit construction with 1700 sq ft units located on 436 & 442 E 13th St in the East Village, is the first major asset in Manhattan to be tokenized on Ethereum. The property has recently been appraised at more than $30M.
Tokenization is the process of representing the ownership of real world assets digitally on a blockchain. This new method of financing is the result of the partnership between Propellr and Fluidity, two companies that have joined forces to offer compliant products and services for the creation, distribution, and transfer of digital securities.
Propellr is a creation, management, and servicing platform for digitally held assets, and parent company of Propellr Securities, a FINRA registered broker dealer. Propellr will use its financial and capital markets experience to offer and sell traditional and tokenized securities under what is known as Reg D rule 506(c).
Fluidity, the team behind AirSwap, provides technology services to registered broker-dealers, issuers and financial institutions for tokenized securities. Fluidity has partnered with Propellr for their institutional capabilities, allowing them to accept fiat payments and solicit and sell securities under 506(c).
The tokenization structure was contemplated and published in The Two Token Waterfall, a comprehensive framework for applying blockchain technology to the entire capitalization of a real estate transaction. The added transparency of the structure has the potential to improve the liquidity of private securities, and can be applied to a broad spectrum of assets in the real world.
I work as a financial markets researcher and analyst for EGM Securities. I have extensive experience trading Forex, stocks, and cryptocurrencies. I write about market trends, real-world fintech projects, macroeconomics, and blockchain.
Shehan is the Head of Tax Strategy at CoinTracker.io (bitcoin & crypto tax software). He is one of the handful of CPAs in the country who is recognized as a real-world operator and a conceptual subject matter expert on cryptocurrency taxation.
The liquidity that tokenizing real estate unlocks in the sector can benefit both investors and the owners of property assets by offering the former an expanded range of investment opportunities, and the latter access to a larger pool of potential purchasers, many of whom may have been previously unable to participate in the property market due to its capital requirements and other entry barriers.
Xian Yang Wong, head of research for Singapore at global real estate services firm Cushman & Wakefield, said that in addition to allowing landlords to tap a larger pool of investors, tokenization also offered flexibility that was lacking in traditional real estate.
Blockchain technology is not a relatively new technology. It existed for many years, but only now has it gained mainstream appeal. The past few years saw blockchain technology getting integrated into various businesses and bringing significant benefits and change. Now, according to experts, real estate tokenization can bring beneficial changes throughout the economy, financial institutions and companies. Lets know it how!
One of the industries that blockchain will have a tremendous impact on is the real estate industry. Blockchain here makes it possible for users to tokenize houses, properties and apartments and represent them on the blockchain.
Presently, real estate remains the safest investment type and ensures better returns than any other investment opportunity. Ask anyone about the best investment to make, and they will tell you to buy an apartment or a commercial space. The only downside to real estate investment is the significant capital required. People with lots of money can invest in real estate, but that also means that regular people get left out.
Tokenization here means convert