With the integration of blockchain technology, the Real Estate industry is undergoing a major overhaul. Real estate tokenization on the blockchain has opened up the industry to individuals who have flair for real state business but could not participate in it due to insufficient funds. It has also solved the inherent issues of the industry like lack of transparency, trust, and speed.
The market of digital asset tokenization of real estate properties can be divided into the following types:
Historically speaking, real estate has been one of the most illiquid asset classes. It’s because real estate dealings involve extensive planning, have cost constraints and require a lot of property management effort, and legal prowess.
Digital asset tokenization on blockchain helps overcome all these challenges by following these 5 stages:
In a real estate tokenization asset, the shareholder type and regulations based on jurisdiction play a very crucial role. When the tokenization is carried out, the ground rules are laid out for current and future investors beforehand.
The traditional information of the real estate deal is stored on the blockchain in smart contracts and security tokens are issued.
To securitize the asset and turn it into an investment vehicle on blockchain 4 structures are used:
Based on these structures, the ground rules for smart contracts are laid out.
Technology selection is very crucial for real estate tokenization. Once you have finalized your asset Tokenization Services provider, you need to make 3 important decisions:
Once the smart contracts are developed and rolled out, token creation and distribution need to be carried out. Real asset tokenization platforms can offer investors various payment methods to buy tokens. Three methods generally used for token distribution are:
Primary Distribution: These are the minted tokens that are distributed to the investors in return for their initial capital investment in the projects.
Secondary Trading: Tokenization is very important as it enhances liquidity. Secondary trading involves the listing of tokens on other exchanges where other investors can exchange the tokens with other tokens or users.
The asset tokenization services company provides post-tokenization support that includes mortgage challenges, dealing with legal issues, activity tracking, and more.
In this blog, we have covered almost everything that you must know about the process of real estate tokenization that provides a solution to all the liquidity challenges in the real estate industry. As a blockchain development company, Antier provides you with a hassle-free tokenization solution for your real estate properties by providing you with a reliable tokenization platform.
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