Tokenization: Fractionalize Physical Property into Digital Asset

Admin 19/September/2022 04:02

Real estate is known to have an attractive returns; but price poses as a high barrier making it hard to get started. Tokenization is resolution tothis obstacle. It do so by diving big physical asset into fractions of digital or tokens on blockchain.

How does tokenization in real estate work? 

In real estate, tokenization refers to the process of dividing physical assets into tiny digital assets or tokens.  Tokenization allows property owners to fractionalize big property into small attainable digital assets using blockchain technology, and to allow people to own a share of the fractionalized and securitized toke of the real world asset. 

Assume an owner of the property wants to sell a property valued at $10 million and while a lot of people want to get hold of the property, they wish to invest in real estate with only $1,000. The property can be tokenized into small digital assets or tokens so that both financial institutions and individuals can become the ownership of the asset. 


Benefits of real estate tokenization 

1/ It does not require big capital

Traditional real estate investing needed a significant amount of funds, which can be difficult for those on a tight budget. With tokenization, anyone can begin investing with little and accessible funds.

2/ Selling out property become easier

Tokenizing the property make selling it faster and less complicated – a great approach to mobilizing funds for real estate property investment. On top of that, there are many real estate investing platforms using this method. Particularly, Z1 FINANCIAL – a digital investment platform utilizing Blockchain technology in Cambodia which aims to create opportunities for real estate investment and digital asset monetization. The platform has become an innovative solution to the real estate investment market.

3/ Transparency and efficiency

Tokenizing asset through a platform that utilizes Blockchain technology provides a high level of efficiency and transparency.  Blockchain technology splits information and stores them into all blocks, making it impossible to steal, duplicate, or even delete –allowing the sellers and buyers to trade assets directly, without the need for a third party to get involved in verifying their transaction.



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