Tokenization is a process whereby some form of asset – in this case, real estate, is converted into tokens which can be moved, recorded or stored on a blockchain network. Tokenization converts the stored value in one physical or intangible object into a token that can be manipulated on a blockchain.
What is tokenized real estate?
Real estate tokenization allows property owners to issue tokens through blockchain platforms. These tokens represent a certain number of shares for some real estate asset.
Other investors can purchase these tokens, and by doing that, they become partial owners of that asset, which further allows them to be involved in cash flows and asset appreciation.
At the same time, they have the freedom to sell any amount of their shares whenever they want, and they can do this even through some other online markets.
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What are the Implications of Tokenization for Real Estate?
Many people have an interest in real estate, but it’s a cumbersome asset to own and to sell. Some 8.25% of Polish householders are classed as accredited investors. There is a significant barrier to entry for ordinary investors when it comes to real estate. With tokenization, real estate converts from a somewhat illiquid asset to a liquid asset.
The fractional ownership aspect of real estate tokenization opens the market to a much wider investing public. The result potentially could lead to greater access for ordinary investors to take a stake in assets that they ordinarily wouldn’t be able to purchase through existing means.
Additionally, it facilitates access to real estate investment in overseas markets that the investor usually wouldn’t have access to. From the point of view of the real estate developer, it increases the likelihood of getting a project funded and potentially, earlier access to capital.
Real Estate Tokenization Platform Fortem to Hold First IEO in EU at Coinsbit Exchange
Cryptocurrency exchange Coinsbit will hold the first IEO in the EU for a blockchain platform. Fortem seeks to tokenize the real estate market in Poland. The project’s team has been involved in the real estate market for several years. Currently, they hold an investment portfolio worth 155 million zlotys ($41 million).
Fortem’s new product, Fortem Capital token, focuses on the tokenization of real-world assets — a venture it believes will transform the way the world invests, trades, and transfers value.
“We have been diligently working on launching an IEO over the past six months, so now we’re happy to announce the first IEO at our platform. Thanks to Coinsbit they will be able to make their business international,” the spokesperson for Coinsbit commented.
Fortem is creating the first-ever platform on the Polish market based on blockchain technology. The platform allows investors to be part of Fortem’s projects in a simple and secure way.
Fortem provides investors with an opportunity to invest their assets in the real property sector, through Fortem projects by using the Fortem Capital token.
Fortem Capital token aims to solve the problems related to international real estate transactions by means of creating an asset transfer platform for the Polish real estate industry.
Fortem Capital token aims to help real estate investors by eliminating intermediaries, improving transparency and liquidity, and lowering barriers to entry.
Interestingly, several blockchain real estate startups have emerged over the last few years. Each intends to disrupt the way property sales work. Secrecy is not profitable anymore, especially when middlemen become redundant.
A blockchain network, after all, can reduce risk aversion through a trustless environment. In turn, this facilitates property transactions without the need for trusted third parties. Greater market demand for transparency in the global economy has spurred innovation in real estate tokenization.
Tokenizing assets makes many processes associated with property transactions happen faster and at a considerably lower cost.