WHAT IS TOKENIZATION?
Tokenization is the division of an asset into a certain number of equal parts, comparable to shares, each of which is represented by a token in a blockchain.
WHAT IS A BLOCKCHAIN?
A blockchain, in simplified terms, is nothing more than a distributed database that immutably and irreversibly stores all transactions between members of a network.
WHAT IS A TOKEN?
A token is a programmable accounting unit that can represent an infinite number of things, such as a unit of payment within an ecosystem, a share of a company, a vote or a portion of an asset.
Tokeniza focuses its services on the tokenization of Real Estate assets, whose fractional ownership will be represented by a token. The holders of these tokens will be entitled to receive the returns associated with this fractional ownership (rental or sale) and will be able to do so automatically thanks to smart contracts. In addition, they will be able to transfer their tokens to other people at any time, thus obtaining immediate liquidity.
How is an asset tokenized?
When you decide to tokenize an asset, you “split” it into a number of equal parts. For example, you can take an existing or future building valued at $250,000 and create 10,000 tokens, each representing 0.01% of the asset and with a value of $25.
These tokens are issued on a blockchain and they will initially be in the same wallet, in the possession of the issuer (the original owner of the property).
When the issuer decides to put them up for sale, fund-raising for these tokens begins. They can be sold in two ways:
THROUGH A SMART CONTRACT
Buyers send cryptocurrency to a certain address and the contract automatically sends them the tokens they purchased
If you want to accept fiat money payments, the issuer sends the tokens to the buyers once the payment has been received.
What advantages does tokenization offer?
The main benefit obtained over similar platforms is the liquidity of the investment. The holder of a token doesn’t need to wait until the term of the investment comes to its end to recover its principal. He can access a decentralized market and put his tokens on sale at the desired price and as soon as a buyer accepts the offer he will be able to dispose of his money immediately.
Another benefit is the simplification of the tokenization process for property owners who wish to quickly access liquidity. They are offered the possibility of selling all or part of that property, assigning the right to collect the associated income to the buyers.
How do I know this is safe?
When purchasing tokens from an issuer, a contract is signed between the two parties that obligates the token seller to manage the property, either directly or through an appointed professional administrator. The issuer will be contractually obligated to guarantee the interest of the holders as a top priority, keeping the property in optimal condition and maximizing their income. If this is not met, token holders may legally exercise their rights against the issuer.
In addition, the tokenized property will be insured by a legal solution that will protect the property from any operation with third parties such as a mortgage or a sale outside the blockchain. This prevents the issuer from executing transactions that are contrary to the interests of the token holders.
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