Real Estate Tokenization refers to the division of a property into tradable shares or digital assets on a blockchain network.
Many countries and regulatory bodies are making legislative changes to create a friendly business environment for the tokenization of real estate assets.
Benefits of Tokenizing Real Estate
- The property developers gain access to additional amounts of capital as they can fractionalize a property efficiently. This facilitates more participation from investors leading to greater capital inflow in a project by reducing the barriers.
- The price of the asset will be quite close to its real market value as the illiquidity discounts will be significantly decreased. A lot of assets can be easily traded at low fees by potential investors in the secondary market.
- Real-time pricing information can be obtained from the order books. Cumbersome paper-based systems that share data asymmetrically, need not be relied upon anymore. This ensures that better trading deals are discovered by investors on a timely basis.
- Investors can experience a higher level of transparency as the blockchain-based system will be updated regularly to know their rights and restrictions related to the use of the tokenized digital asset. They will know the value of the underlying property beforehand.
- Various overhead expenses will be reduced and settlement of funds will be done faster. The entire governance of the platform is taken digital and happens automatically. Real Estate Tokenization removes the role of intermediaries like brokers and agents.
- Wealthy investors can effectively diversify their portfolios by investing in multiple properties around the globe and enjoy the benefits of higher returns.
- The chances of fraud are decreased as a transaction that is recorded on the blockchain network cannot be changed by anyone. This establishes more trust and confidence in the minds of property investors.
- Real estate tokens are financially supported by real-world assets. They are less risky when compared to volatile cryptocurrencies or some dubious ICO’s.
- Prompt checks and balances are ensured to maintain stability so that the value of the security token does not fall below the net asset value (NAV) of the real estate asset.
WeU tokens will be a utility token to purchase and sell real-world assets with sufficient liquidity and listing on reputed Centralized and Decentralized Exchange