May 6, 2022
Jerald David
Thought Leadership

Tokenized Real Estate

Real estate is one of the largest asset classes in the world, with over $280 trillion in market value. Investing in property has persisted as highly attractive and advantageous due to the relative stability of real estate compared to traditional equities and higher earning potential than a low-risk bond.

Although the current value of residential real estate is at its highest in 16 years, and the market is projected to increase consistently, inefficiencies and inaccessibility to the market leave a substantial amount of potential untapped. However, blockchain technology could remedy current shortcomings, quickly catapulting the sector to significantly higher valuations. Leveraging the power of blockchain and non-fungible tokens (NFTs) to tokenize real estate could optimize the industry and expand the pool of potential investors.

The convergence of real estate and tokenization has considerable implications for property developers, owners and investors. Tokenization is the issuance of ownership of physical or digital assets as non-fungible tokens (NFTs) on a blockchain. Less than 1% of real estate market capitalization is tradable on an exchange. Tokenizing the private real estate industry could significantly increase capital and market participation by enabling 24/7 trading to a historically illiquid industry.

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