Landshare Team
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The financial markets worldwide are witnessing paradigm shifts with inclusion of emerging technologies. Mckinsey report says that the new-age fintech has surged from the periphery to dominate financial services, with its market cap hitting $550 billion by July 2023, and the number of fintech unicorns reaching 272, valued at $936 billion. This growth, driven by innovation, digitization, and changing consumer demands, has seen fintech reshape financial services.
We look at traditional investment sectors such as real estate and commodities markets that are also poised for transformation. One of the technological advancements that emerged recently is tokenization.
The global real estate market is valued in trillions of dollars, yet it's characterized by low liquidity and high entry barriers. Tokenization is poised to unlock the value of illiquid assets and make them accessible to a wider range of investors.
For the real estate market which is worth a whopping $600 Trillion as of now, tokenization is a game changer that can contribute to the sector’s growth and eliminate inefficiencies to a large extent. Several cryptocurrency projects, such as Landshare ($LAND), have also emerged in the past several years dedicated to the tokenization of the real estate sector.
Let’s dive deeper into the subject and try to understand what is on the other side of the innovative intersection of real estate and blockchain technology and how Landshare-like platforms play a crucial role in achieving success.
Tokenization is a process of issuing a digital representation of an asset over a blockchain. The process ensures digital representation of tangible financial assets over blockchain. A tokenized version of a physical asset does not only keep the inherent traits but also eliminate the shortcomings.
The process of tokenization includes token issuance, sale of the token, and then custody of the security token. However, the process of ownership includes asset’s going through tokenization which is then divided into a certain number of tokens where each token represents a percentage of the property possession.
The market size of tokenization was $2.3 Billion by 2021 but the sector is likely to see significant growth in the future given the expected compounded annual growth rate (CAGR) of 19%. The market size could swell up to $5.6 Billion by 2026.
In terms of real estate tokenization, any property can be converted into security tokens over blockchain. These tokens would now represent the value of a unit of real estate property. The popular term for such tokens is Real World Asset (RWA) tokens.
Traditionally, the buying and selling of real estate properties comes with much of a hassle. First up it requires a hefty amount of upfront capital to buy the asset. It takes a lot of time and effort to do paperwork for the property handover. The process is not transparent and there’s always a scope of oversight. Also, there are a lot of constraints for a buyer willing to buy a foreign property.
Tokenization of the real estate market brings unprecedented advantages for one of the biggest investment sectors in the world. Real estate investments are among the few investments with lucrative yet stable returns. The tokenized version brings additional features making it even more attractive.
Tokenized real estate investments are different from traditional real estate investments. However, the differences do not make any one of them superior then the other. Instead, the tokenized real estate is only going to complement the traditional sector. The comparison between the two should clear the picture to a large extent for better understanding.
Though tokenization has noteworthy benefits, there are several challenges in front of the growing sector that needs to be addressed.
Regulatory compliance becomes one of the hurdles in front of real estate tokenization. Since it's an emerging market, the regulatory bodies across the countries might still need some time to come up with regulations to keep the scrutiny without compromising on the sector's growth.
Akin to regulatory compliance, the newness of the tokenized real estate market makes it relatively tough for people to accept. The financial markets are still figuring out and may take time to completely trust and accept the new investment vehicle.
The global real estate market is expected to hit a staggering value of $637.8 Trillion in 2024. The projected annual growth rate is 3.4% CAGR. And considering the expected growth rate, the real estate market is going to be worth $729.4 Trillion by 2028.
A report by the World Economic Forum predicted that by 2027, 10% of the world's GDP will be tokenized — with a significant portion of this potentially in the real estate sector. To put this into perspective, world GDP in 2027 is expected to hit $130 Trillion and hence the tokenized asset market will be worth around $13 Trillion. This number suggests a huge growth potential for the tokenized market in the coming years.
The Landshare Ecosystem takes a unique approach to tokenized real estate, combining the benefits of RWA investment with the opportunities provided by DeFi features such as staking and LP Farming.
Our approach to the real estate tokenization market is underscored by our unique selling propositions, reflecting both innovation and reliability. The successful sale of three properties on the Binance Smart Chain (BSC) serves as a concrete demonstration of our operational capabilities and market acceptance.
Furthermore, the launch of our Real World Asset (RWA) token, Landshare RWA ($LSRWA), introduces new avenues for investors seeking diversification and passive income. RWA tokens represent a pool of properties for you to invest in at once, reducing risk through diversification.
For instance, we acquire a real estate property in Cleveland for $118,000 and add the asset to the RWA Pool. Each RWA Token represents a share of the total pool, providing a clear and tangible stake in the investment.
Our native utility token, $LAND, plays a crucial role in transactions and operations across the platform.
In addition to the core advantages of tokenized real estate, we bring forth extra features for DeFi-centric users. By staking the $LAND token, investors can earn 12% APR, while engaging in staking with $LAND-$BNB LP presents the potential for rewards up to 66%.
The financial markets are undergoing a transformative shift with the advent of technologies like blockchain, particularly in the real estate sector. Landshare and similar platforms are at the forefront, merging blockchain with real estate to enhance accessibility, efficiency, and transparency.
Tokenization is revolutionizing investment by making real estate more accessible and liquid, signaling a future where investing in tangible assets is more democratized. We, at Landshare, are playing our role in this evolution, demonstrating the potential of tokenized real estate and its significant economic implications. This movement isn't just a trend but a pivotal change set to redefine investment landscapes globally.
Landshare Team
What comes to your mind when considering whether there will be an increasingly high demand for real estate properties with time? The answer should be affirmative since we know that land is a finite resource, and so are properties. This more was needed to drive the demand for real estate properties, at least not for another century. However, property owners do not need to worry since real estate tokenization solves this issue.
One of the most effective use cases of blockchain technology—tokenization—has shown impressive results and assured a bright future. Real estate tokenization was among the first implementations of the technology, and it was indeed successful. McKinsey, a global management consulting firm, estimates that the volume of tokenized digital securities will hit $5 trillion by 2030, while other reports suggest that real estate tokenization will have a significant share in it.
A Boston Consulting Group (BCG) report showed that the market size of the tokenized real estate sector in 2022 was $2.7 Billion. However, it is expected to reach $16 trillion by 2030. Such huge numbers are only possible with supply meeting demand. Tokenization brings enormous possibilities, and property owners can now be assured of potential increased demand for tokenized real estate properties.
We must investigate the reasons that are expected to increase the demand for tokenized real estate. Let’s do this by first understanding what tokenization means.
Tokenization is the digital representation of assets on blockchain networks. Real estate tokenization does the same by representing property value through blockchain-based tokens. After tokenization, the real estate sector experienced remarkable changes, as it eliminated inherent flaws and brought some unique features.
The benefits, including rational ownership, increased liquidity, transparency, and security, place tokenized real estate ahead of the traditional market. Investors and property buyers are drawn towards tokenized real estate due to these offerings and likely to increase the demand in the contingency.
The demand for real estate investment has continued to grow. According to KPMG, the global commercial real estate investment hit $830 billion in 2019, demonstrating growing interest. On the other hand, average investors have been massively included in the real estate market because of some practical ways to invest, such as Real Estate Investment Trusts (REITs). The S&P Global REIT Index has seen notable growth in the past few years, indicating the rising demand for real estate investment.
Tokenization offers a more democratized way of investing in real estate, ensuring a huge future demand. Let’s delve into the offerings of tokenized real estate to understand why it could drive more demand:
Fragmentation or fractional ownership of real estate properties through tokenization not only makes it possible for small investors to participate but also empowers them. By making tokenization accessible to small investors, tokenization opens up a vast pool of untapped interested buyers. Once this crowd enters the space, the real estate market could see unprecedented demand, giving small investors a significant role to play.
Tokenization is often hailed as the 'democratization of the real estate sector '. This term refers to the idea that tokenization can make real estate investments more accessible to a wider range of investors, not just the ultra-wealthy. Many reports show that ultra-high-net-worth individuals (UHNWI), a term used to describe individuals with a net worth of over $ 30 million, prefer real estate investments for stability, cash flow, appreciation, and diversification. According to Tiger 21, a network of UHNWI entrepreneurs and investors, about 27% of these HNIs' investment portfolios consist of real estate investments.
If given opportunities, small investors are likely to follow the HNI investment strategy to benefit from the stability, cash flow, and appreciation of the real estate sector. Tokenized real estate provides many investors with an opportunity to enter the market.
Traditional real estate markets have always had a barrier to entry, given the requirement of high capital to invest. This has restricted small investors from entering the market, but tokenization solves this. Tokenized real estate properties are divided into small units and become affordable even for retail investors.
The low threshold for entering the real estate investment market has allowed many investors to enter, which was never possible earlier. There are numerous active projects in the tokenized real estate market that facilitate real estate investment with as low as $50. In comparison to traditional real estate, which might require from $100K to $1 Million, depending on the property, there are enormous possibilities in the tokenized real estate market.
Tokenization doesn't just allow investors to invest in real estate in any corner of the world, it opens up a world of possibilities. This global reach liberates investors from the limitation of investing in regional properties, offering them the excitement of exploring international properties with the possibility of a better return on investment and rental income yield.
Several studies show that nearly 90% of all US-registered real estate properties are accessible only to accredited investors. This shows that many investment options are only available to a small number of investors.
For instance, if you are an aspiring real estate investor from Indonesia, you can invest in tokenized real estate based in the United States. This access to international real estate properties was unimaginable until tokenization.
In tokenization, real estate properties are turned into tokens that investors or property buyers can hold. These tokens can then be easily traded to other investors. This easy and quick selling and buying of tokens not only makes the tokenized real estate sector highly liquid but also provides property owners with a sense of security, knowing that they can receive cash in exchange for their property or part of it quicker than they could traditionally.
Property owners can receive cash in exchange for their property or part of it quicker than they could traditionally. Investors or buyers are also not burdened with carrying the investment for long periods.
Blockchain technology plays a significant role in the easy management of real estate properties with the help of smart contracts. Tokenized real estate properties do not need intermediaries to carry out the transactions. Self-executable smart contracts take care of the property transactions once the conditions are met.
With blockchain technology comes the assurance of security and transparency. As smart contracts take care of the process, participants can see the whole transaction by themselves and see if everything is going according to plan. Due to the immutable nature of blockchain networks, it becomes nearly impossible to alter the transactions.
Since buying and selling tokenized real estate property is digital, it does not require paperwork, bureaucracy, or other requirements that increase transaction costs. The automated process keeps the cost minimal, making the transaction affordable.
KPMG study finds that a significant amount of time and money goes into a real estate transaction. Such transactions could sometimes take six months to 2 years and 1% to 3% of the assets’ value in fees, depending on the property. Tokenized asset transfers get done quickly and at a much cheaper rate.
Traditionally, real estate markets are illiquid, and it might take months to sell or resell your property. In tokenized real estate, however, since investors purchase the tokens, they can easily sell these tokens further to other investors or in the secondary market.
The real estate market has this limitation, but asset-backed tokens are easily tradable, further enhancing liquidity.
Landshare offers the ultimate real estate tokenization services that ensures investors as well as property owners get most benefits. We ensure all the features and offerings mentioned above available on the platform. Providing access to retail investors, accessibility to international real estate, high liquidity, transparent process, low transaction cost and secondary market trading, Landshare is committed to cater both ends in the real estate market: investors and property owners.
We have explored that tokenization of real estate is more than just a fleeting trend; it is a transformative innovation reshaping the market. With enhanced accessibility for retail investors to global reach and high liquidity, tokenization is smashing long-standing barriers.
The integration of blockchain technology makes the process transparent, secure, and efficient by reducing transaction costs and simplifying property management using smart contracts. Indeed, the future is digital, and the real estate sector is still catching up with the trend. Property owners can leverage tokenization and look forward to an emerging market that is more inclusive, efficient, and dynamic.
Landshare is a U.S.-based platform dedicated to the tokenization of real estate properties. It enables investors to acquire fractional shares in residential properties using blockchain technology, streamlining the investment process and broadening the scope of who can invest in real estate. By integrating blockchain technology into the real estate market, Landshare offers tokenized property assets on its platform, making it possible for investments to start at just $50, thus democratizing the entry into property investment.
The platform employs Real World Asset (LSRWA) tokens, granting investors partial ownership in tangible property assets and marking a notable innovation in real estate investment. Landshare's utility token, LAND, has demonstrated its transactional effectiveness by successfully selling four tokenized properties on the Binance Smart Chain (BSC), affirming its readiness for the market. Addressing the traditional inefficiencies and liquidity issues in real estate, Landshare positions itself as a critical player, offering promising prospects for growth and passive income generation.
Landshare Team
The real estate market is witnessing a transformative shift with the introduction of blockchain technology, particularly through the concept of tokenization. This innovative approach is redefining property ownership, offering new opportunities for investment and liquidity.
If you are an investor in real estate, you might have reaped the benefits of tokenized real estate investments. However, real estate tokenization not only opens a new avenue for real estate investors but also brings forth advantages to property owners.
Tokenization allows property owners to convert real estate assets into digital tokens, thereby simplifying transactions and broadening investor access. Liquidity and fractionalization are key benefits in tokenized real estate but for property owners within the ecosystem could see more than this.
In the following blog, let's explore more compelling use cases of tokenization for property owners including house flipping, partial sales, and tokenizing cash flows, backed by real statistics and figures to illustrate its growing impact.
Tokenization is a process of creating a digital identity of a tangible financial asset on blockchain which is unique and anonymous. This method takes the value of an asset on a chain. It brings benefits such as fractional ownership, liquidity, enhanced security and transparency. Currencies, commodities, real estate properties and art pieces are the common tokenized assets.
As an investor, you can enjoy investing in multiple assets through fractional ownership reaping the benefits of varied returns on respective assets. Real estate sector is traditionally one of the most illiquid ones since it takes time to sell off a property which requires time and effort but tokenization solves such pain points.
We have already discussed the pros and cons of tokenized real estate investments in earlier pieces. Along with the investors, tokenization resolves issues for property owners. The tokenized real estate properties can be sold off in units that increase higher chances of sale. Following are more crucial advantages of tokenized real estate for property owners.
Traditionally the practice of purchasing properties, renovating them and then selling them in profit is house flipping. It needs a hefty amount upfront and since the market turns or unexpected costs are also crucial factors, there are risks included in the process. But inclusion of tokenization could mitigate these risks to some extent also resolving issues related to liquidity.
The house flippers could sell fractional shares of the property as tokens in exchange for the required amount. Let’s say a flipper buys a property for $300,000 and needs $50,000 for renovations. Now they could issue 350,000 tokens valued at $1 each to raise the renovation funds. This way they can not only speed up the process but also manage to diversify the risk.
Tokenization also allows partial sales that enable property owners selling a fraction of their property to different investors. Though the method could be useful for any real estate property, the markets with high-value properties such as the United States can benefit the most. This way the property owners bear no debt and it becomes a great alternative to home equity line of credit (HELOC).
Property owners can sell out their shares of property to a pool of investors after tokenizing it. For instance, a property owner takes 60% ownership and sells the rest 40% of the property. Along with the democratization of real estate investment, this approach also provides liquidity to owners to invest in more ventures or even make improvements in the real estate property.
One of the innovative ways to secure the funding along with providing regular income to investors is through tokenization of rental properties’ cash flows. You as an owner of a real estate property that generates $10,000 per month through rent could use the method and tokenize this case flow while offering tokens that represent a share in the rental income. This method attracts investors seeking stable returns without the need for large capital investments.
A Deloitte report states that by offering such fractional ownership and investment opportunities, tokenization could grow the liquidity of global real estate assets by over $1.4 trillion.
At Landshare, we've dedicated ourselves to democratizing real estate investment, and our efforts have culminated in the Landshare RWA Token. This innovative product empowers anyone to generate passive income from real-world assets with an investment as low as $1.
The benefits of our tokenization process extend beyond just investors. Property owners—whether individuals, corporate entities, investment clubs, or funds—now have a powerful tool at their disposal. Through tokenization, both investors and property owners can cultivate a relationship that is mutually advantageous.
As we build on our strong base of RWA investors, our next objective is to enable property owners to tokenize their assets through the Landshare platform. This capability will allow them to raise funds and secure loans against their properties, enhancing the value provided to our existing LSRWA investors.
Tokenization offers property owners a range of strategic advantages. It isn't merely about listing properties for sale. Its true value lies in its ability to provide liquidity and allow for the fractional ownership of properties. Alternatively, they can borrow against the future cash flow from their properties, maintaining their stake while obtaining upfront cash.
Landshare has always been taking bold and unique steps for the sake of community and is now looking to include property owners, who remain at the other end of spectrum, along with the investors.
This initiative is set to broaden the array of properties available on our platform, diversify our offerings with new property types including vacation homes and commercial spaces, and expand our reach beyond the U.S. It also introduces new mintable NFTs, enriching our investors' options.
The broader impact of real estate tokenization is significant, offering increased liquidity, reduced transaction costs, and enhanced market efficiency. A study by the World Economic Forum predicts that by 2027, 10% of the global GDP will be stored on blockchain technology, with real estate being a major component of this shift.
This adoption indicates a robust future where tokenization not only makes real estate investment more accessible but also more integrated with global financial markets, allowing for seamless international transactions and diversified portfolios.
Tokenization stands out as a revolutionary tool in real estate, providing property owners and investors with novel ways to manage and profit from their assets. As the technology matures and regulatory frameworks develop, the possibilities for tokenization in real estate will likely expand, further unlocking the potential of properties as both investment vehicles and sources of revenue.
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $1 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
Landshare Team
As blockchain technology matures, its potential extends beyond digital currencies into the broader domain of tokenizing real-world assets (RWAs). From real estate to artworks and even intellectual property, the ability to tokenize physical assets has opened up new possibilities for investment, ownership, and exchange.
A Boston Consulting Group report stated that the market size of the on-chain RWA market is expected to hit $16 Trillion by 2030. The massive market size showcases enormous possibilities for growth in the future.
The evolution of technology towards a tokenized economy requires robust cross-chain technologies that facilitate seamless interoperability among diverse blockchain platforms. Here, we will explore what a tokenized economy looks like, why tokenizing real-world assets is transformative, and the crucial role of cross-chain solutions in this burgeoning ecosystem.
Tokenization involves converting the rights to an asset into a digital token on a blockchain. These tokens represent ownership or a claim to the underlying asset, allowing them to be bought, sold, or traded on digital platforms. The process democratizes access to investment opportunities and enhances liquidity, transparency, and efficiency in transactions.
Almost every other tangible financial asset can be tokenized today. Thanks to blockchain technology, commodities, currencies, real estate properties, arts, and many other similar assets can be traded in their tokenized versions. The concept of tokenization gained popularity quickly, and a huge amount of credit goes to the benefits it brings to the table.
Increased Liquidity: Tokenization can transform traditionally illiquid assets like real estate or art into divisible and easily tradable tokens. This broadens the market and reduces entry barriers for investors, making the asset more tradable and, hence, comparatively more liquid. For example, platforms like Landshare allow investors to purchase fractions of real estate properties as tokens, which they can sell on secondary markets without the need for lengthy and complex real estate transactions. This method greatly enhances liquidity in a market traditionally dominated by high thresholds for entry and exit.
Enhanced Transparency: Using blockchain ensures that all transactions are recorded on an immutable ledger, reducing the risk of fraud and increasing trust. For instance, the buying and selling of real estate properties have traditionally been opaque processes with layers of brokers, inspectors, and legal checks. However, with tokenized real estate transactions, every transaction from initial purchase to subsequent sales is recorded transparently on the blockchain.
Streamlined Processes With Automation: Blockchain technology can automate many of the processes involved in asset management through smart contracts, reducing the need for intermediaries and lowering transaction costs. The process is on-chain and requires no paperwork, which resolves a huge issue inherent to the trade of tangible assets like real estate. A notable example here is Maecenas, which allows users to buy and sell shares in fine art using blockchain. This system eliminates the need for auction houses and brokers, thereby reducing fees and streamlining the entire investment process in art, a market traditionally inaccessible to average investors due to high costs and complex buying processes.
With the evolution of blockchain technology, the space is filled with many blockchain networks with distinct properties. It was important that these chains connected to each other to create a unified ecosystem, and that’s where Cross-chain systems came to the rescue.
Cross-chain technology enables blockchain networks to communicate and share information, assets, and value. This interoperability allows users to transact across various blockchains without the need to exchange tokens through a central exchange, enhancing the efficiency and scalability of blockchain applications by connecting otherwise isolated networks.
For instance, Polygon (MATIC) offers extensive cross-chain capabilities through its Polygon Bridge, enabling seamless asset transfers between the Ethereum (ETH) blockchain and Polygon sidechains. This feature supports the movement of ERC tokens, NFTs, and other digital assets, facilitating interoperability and scalability. By using Polygon's cross-chain bridges, users benefit from faster transaction speeds and lower fees compared to Ethereum's mainnet, while maintaining robust security.
Arbitrum (ARB) is another example where the Layer 2 scaling solution for Ethereum enhances its cross-chain capabilities primarily through compatibility with Ethereum's network. It allows users to execute Ethereum transactions more swiftly and at a lower cost, without sacrificing security. While it operates on top of Ethereum, Arbitrum doesn't have a native cross-chain bridge like Polygon but leverages Ethereum's security and connectivity.
Cross chain systems bring these benefits to the RWA sector further enhancing its reach. Tokenized assets could move across blockchain networks rather than limited to the native blockchain only. More the reach to multiple blockchains the more users it can cater.
Broader Market Access: RWA investors benefit from cross-chain systems by gaining access to a wider range of tokenized assets across multiple blockchains, optimizing their investment strategies. This not only broadens their market reach but also enhances liquidity in the RWA sector by including a diverse pool of investors.
Reduced Risk of Fragmentation: Cross-chain technology ensures interoperability across different blockchains, preventing market fragmentation and fostering a more unified ecosystem. Connectivity makes RWAs more accessible and prevents projects within the RWA sector from being isolated on single platforms, promoting broader adoption and integration.
Enhanced Scalability: Cross-chain solutions address scalability challenges that single blockchains face by distributing the load among multiple networks. The utilization of various networks’ strengths leads to more efficient handling of transactions and interactions, significantly enhancing the performance and scalability of RWA applications.
A significant advancement in cross-chain technology is the development of blockchain bridges, such as Polkadot and Cosmos, which aim to connect disparate blockchains to enable asset and data transfer. When the tech is integrated with the RWA sector, it brings significant results.
Cross-chain technology significantly enhances the Real World Asset (RWA) sector by improving liquidity and market access. By enabling seamless transactions across various blockchains, it allows investors to diversify their portfolios with a broader range of tokenized assets, such as real estate or commodities.
The volume of tokenized real estate assets like to increase largely due to improved interoperability provided by cross-chain platforms. This technology also reduces market fragmentation, creating a more cohesive and robust investment landscape, which further attracts a larger pool of global investors, driving the sector's growth and stability.
Cross-chain technology is crucial in the context of RWA because it enables interoperability between different blockchain platforms. This means that assets can move seamlessly across various blockchain networks, enhancing the functionality and reach of tokenized assets. Each blockchain would operate in isolation without cross-chain capabilities, limiting the potential for a truly global and integrated tokenized economy.
As more assets get tokenized on various blockchain platforms, interoperability becomes crucial. Cross-chain technology allows different blockchains to communicate and share information, enabling tokens and assets to move freely across diverse networks.
Integrating cross-chain technologies with tokenization efforts will likely redefine asset management and investment across multiple sectors. As regulatory frameworks evolve to accommodate these innovations, we can anticipate a more inclusive and efficient global market landscape.
As assets from real estate to artwork are tokenized, they become more accessible and liquid. Tokenization could unlock trillions in illiquid assets, significantly expanding global investment opportunities. According to a forecast by the World Economic Forum, the tokenized assets market could exceed $24 trillion by 2027.
Integration of multichain systems will enable these tokens to operate across different blockchain platforms, enhancing the functionality and reach of each tokenized asset. This interoperability is critical to building a seamless, efficient global marketplace, bridging diverse economic sectors and geographies, and setting the stage for a more inclusive financial ecosystem.
The potential of a tokenized economy facilitated by cross-chain technology represents a significant shift in how we perceive asset ownership and investment. As this ecosystem continues to evolve, it promises to bring more inclusivity, efficiency, and transparency to the global economy. The journey towards a fully integrated tokenized world is complex and fraught with challenges, but the benefits could redefine the economic landscape for future generations.
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $50 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
By
Landshare Team
What comes to your mind when considering whether there will be an increasingly high demand for real estate properties with time? The answer should be affirmative since we know that land is a finite resource, and so are properties. This more was needed to drive the demand for real estate properties, at least not for another century. However, property owners do not need to worry since real estate tokenization solves this issue.
One of the most effective use cases of blockchain technology—tokenization—has shown impressive results and assured a bright future. Real estate tokenization was among the first implementations of the technology, and it was indeed successful. McKinsey, a global management consulting firm, estimates that the volume of tokenized digital securities will hit $5 trillion by 2030, while other reports suggest that real estate tokenization will have a significant share in it.
A Boston Consulting Group (BCG) report showed that the market size of the tokenized real estate sector in 2022 was $2.7 Billion. However, it is expected to reach $16 trillion by 2030. Such huge numbers are only possible with supply meeting demand. Tokenization brings enormous possibilities, and property owners can now be assured of potential increased demand for tokenized real estate properties.
We must investigate the reasons that are expected to increase the demand for tokenized real estate. Let’s do this by first understanding what tokenization means.
Tokenization is the digital representation of assets on blockchain networks. Real estate tokenization does the same by representing property value through blockchain-based tokens. After tokenization, the real estate sector experienced remarkable changes, as it eliminated inherent flaws and brought some unique features.
The benefits, including rational ownership, increased liquidity, transparency, and security, place tokenized real estate ahead of the traditional market. Investors and property buyers are drawn towards tokenized real estate due to these offerings and likely to increase the demand in the contingency.
The demand for real estate investment has continued to grow. According to KPMG, the global commercial real estate investment hit $830 billion in 2019, demonstrating growing interest. On the other hand, average investors have been massively included in the real estate market because of some practical ways to invest, such as Real Estate Investment Trusts (REITs). The S&P Global REIT Index has seen notable growth in the past few years, indicating the rising demand for real estate investment.
Tokenization offers a more democratized way of investing in real estate, ensuring a huge future demand. Let’s delve into the offerings of tokenized real estate to understand why it could drive more demand:
Fragmentation or fractional ownership of real estate properties through tokenization not only makes it possible for small investors to participate but also empowers them. By making tokenization accessible to small investors, tokenization opens up a vast pool of untapped interested buyers. Once this crowd enters the space, the real estate market could see unprecedented demand, giving small investors a significant role to play.
Tokenization is often hailed as the 'democratization of the real estate sector '. This term refers to the idea that tokenization can make real estate investments more accessible to a wider range of investors, not just the ultra-wealthy. Many reports show that ultra-high-net-worth individuals (UHNWI), a term used to describe individuals with a net worth of over $ 30 million, prefer real estate investments for stability, cash flow, appreciation, and diversification. According to Tiger 21, a network of UHNWI entrepreneurs and investors, about 27% of these HNIs' investment portfolios consist of real estate investments.
If given opportunities, small investors are likely to follow the HNI investment strategy to benefit from the stability, cash flow, and appreciation of the real estate sector. Tokenized real estate provides many investors with an opportunity to enter the market.
Traditional real estate markets have always had a barrier to entry, given the requirement of high capital to invest. This has restricted small investors from entering the market, but tokenization solves this. Tokenized real estate properties are divided into small units and become affordable even for retail investors.
The low threshold for entering the real estate investment market has allowed many investors to enter, which was never possible earlier. There are numerous active projects in the tokenized real estate market that facilitate real estate investment with as low as $50. In comparison to traditional real estate, which might require from $100K to $1 Million, depending on the property, there are enormous possibilities in the tokenized real estate market.
Tokenization doesn't just allow investors to invest in real estate in any corner of the world, it opens up a world of possibilities. This global reach liberates investors from the limitation of investing in regional properties, offering them the excitement of exploring international properties with the possibility of a better return on investment and rental income yield.
Several studies show that nearly 90% of all US-registered real estate properties are accessible only to accredited investors. This shows that many investment options are only available to a small number of investors.
For instance, if you are an aspiring real estate investor from Indonesia, you can invest in tokenized real estate based in the United States. This access to international real estate properties was unimaginable until tokenization.
In tokenization, real estate properties are turned into tokens that investors or property buyers can hold. These tokens can then be easily traded to other investors. This easy and quick selling and buying of tokens not only makes the tokenized real estate sector highly liquid but also provides property owners with a sense of security, knowing that they can receive cash in exchange for their property or part of it quicker than they could traditionally.
Property owners can receive cash in exchange for their property or part of it quicker than they could traditionally. Investors or buyers are also not burdened with carrying the investment for long periods.
Blockchain technology plays a significant role in the easy management of real estate properties with the help of smart contracts. Tokenized real estate properties do not need intermediaries to carry out the transactions. Self-executable smart contracts take care of the property transactions once the conditions are met.
With blockchain technology comes the assurance of security and transparency. As smart contracts take care of the process, participants can see the whole transaction by themselves and see if everything is going according to plan. Due to the immutable nature of blockchain networks, it becomes nearly impossible to alter the transactions.
Since buying and selling tokenized real estate property is digital, it does not require paperwork, bureaucracy, or other requirements that increase transaction costs. The automated process keeps the cost minimal, making the transaction affordable.
KPMG study finds that a significant amount of time and money goes into a real estate transaction. Such transactions could sometimes take six months to 2 years and 1% to 3% of the assets’ value in fees, depending on the property. Tokenized asset transfers get done quickly and at a much cheaper rate.
Traditionally, real estate markets are illiquid, and it might take months to sell or resell your property. In tokenized real estate, however, since investors purchase the tokens, they can easily sell these tokens further to other investors or in the secondary market.
The real estate market has this limitation, but asset-backed tokens are easily tradable, further enhancing liquidity.
Landshare offers the ultimate real estate tokenization services that ensures investors as well as property owners get most benefits. We ensure all the features and offerings mentioned above available on the platform. Providing access to retail investors, accessibility to international real estate, high liquidity, transparent process, low transaction cost and secondary market trading, Landshare is committed to cater both ends in the real estate market: investors and property owners.
We have explored that tokenization of real estate is more than just a fleeting trend; it is a transformative innovation reshaping the market. With enhanced accessibility for retail investors to global reach and high liquidity, tokenization is smashing long-standing barriers.
The integration of blockchain technology makes the process transparent, secure, and efficient by reducing transaction costs and simplifying property management using smart contracts. Indeed, the future is digital, and the real estate sector is still catching up with the trend. Property owners can leverage tokenization and look forward to an emerging market that is more inclusive, efficient, and dynamic.
Landshare is a U.S.-based platform dedicated to the tokenization of real estate properties. It enables investors to acquire fractional shares in residential properties using blockchain technology, streamlining the investment process and broadening the scope of who can invest in real estate. By integrating blockchain technology into the real estate market, Landshare offers tokenized property assets on its platform, making it possible for investments to start at just $50, thus democratizing the entry into property investment.
The platform employs Real World Asset (LSRWA) tokens, granting investors partial ownership in tangible property assets and marking a notable innovation in real estate investment. Landshare's utility token, LAND, has demonstrated its transactional effectiveness by successfully selling four tokenized properties on the Binance Smart Chain (BSC), affirming its readiness for the market. Addressing the traditional inefficiencies and liquidity issues in real estate, Landshare positions itself as a critical player, offering promising prospects for growth and passive income generation.
By
Landshare Team
The real estate market is witnessing a transformative shift with the introduction of blockchain technology, particularly through the concept of tokenization. This innovative approach is redefining property ownership, offering new opportunities for investment and liquidity.
If you are an investor in real estate, you might have reaped the benefits of tokenized real estate investments. However, real estate tokenization not only opens a new avenue for real estate investors but also brings forth advantages to property owners.
Tokenization allows property owners to convert real estate assets into digital tokens, thereby simplifying transactions and broadening investor access. Liquidity and fractionalization are key benefits in tokenized real estate but for property owners within the ecosystem could see more than this.
In the following blog, let's explore more compelling use cases of tokenization for property owners including house flipping, partial sales, and tokenizing cash flows, backed by real statistics and figures to illustrate its growing impact.
Tokenization is a process of creating a digital identity of a tangible financial asset on blockchain which is unique and anonymous. This method takes the value of an asset on a chain. It brings benefits such as fractional ownership, liquidity, enhanced security and transparency. Currencies, commodities, real estate properties and art pieces are the common tokenized assets.
As an investor, you can enjoy investing in multiple assets through fractional ownership reaping the benefits of varied returns on respective assets. Real estate sector is traditionally one of the most illiquid ones since it takes time to sell off a property which requires time and effort but tokenization solves such pain points.
We have already discussed the pros and cons of tokenized real estate investments in earlier pieces. Along with the investors, tokenization resolves issues for property owners. The tokenized real estate properties can be sold off in units that increase higher chances of sale. Following are more crucial advantages of tokenized real estate for property owners.
Traditionally the practice of purchasing properties, renovating them and then selling them in profit is house flipping. It needs a hefty amount upfront and since the market turns or unexpected costs are also crucial factors, there are risks included in the process. But inclusion of tokenization could mitigate these risks to some extent also resolving issues related to liquidity.
The house flippers could sell fractional shares of the property as tokens in exchange for the required amount. Let’s say a flipper buys a property for $300,000 and needs $50,000 for renovations. Now they could issue 350,000 tokens valued at $1 each to raise the renovation funds. This way they can not only speed up the process but also manage to diversify the risk.
Tokenization also allows partial sales that enable property owners selling a fraction of their property to different investors. Though the method could be useful for any real estate property, the markets with high-value properties such as the United States can benefit the most. This way the property owners bear no debt and it becomes a great alternative to home equity line of credit (HELOC).
Property owners can sell out their shares of property to a pool of investors after tokenizing it. For instance, a property owner takes 60% ownership and sells the rest 40% of the property. Along with the democratization of real estate investment, this approach also provides liquidity to owners to invest in more ventures or even make improvements in the real estate property.
One of the innovative ways to secure the funding along with providing regular income to investors is through tokenization of rental properties’ cash flows. You as an owner of a real estate property that generates $10,000 per month through rent could use the method and tokenize this case flow while offering tokens that represent a share in the rental income. This method attracts investors seeking stable returns without the need for large capital investments.
A Deloitte report states that by offering such fractional ownership and investment opportunities, tokenization could grow the liquidity of global real estate assets by over $1.4 trillion.
At Landshare, we've dedicated ourselves to democratizing real estate investment, and our efforts have culminated in the Landshare RWA Token. This innovative product empowers anyone to generate passive income from real-world assets with an investment as low as $1.
The benefits of our tokenization process extend beyond just investors. Property owners—whether individuals, corporate entities, investment clubs, or funds—now have a powerful tool at their disposal. Through tokenization, both investors and property owners can cultivate a relationship that is mutually advantageous.
As we build on our strong base of RWA investors, our next objective is to enable property owners to tokenize their assets through the Landshare platform. This capability will allow them to raise funds and secure loans against their properties, enhancing the value provided to our existing LSRWA investors.
Tokenization offers property owners a range of strategic advantages. It isn't merely about listing properties for sale. Its true value lies in its ability to provide liquidity and allow for the fractional ownership of properties. Alternatively, they can borrow against the future cash flow from their properties, maintaining their stake while obtaining upfront cash.
Landshare has always been taking bold and unique steps for the sake of community and is now looking to include property owners, who remain at the other end of spectrum, along with the investors.
This initiative is set to broaden the array of properties available on our platform, diversify our offerings with new property types including vacation homes and commercial spaces, and expand our reach beyond the U.S. It also introduces new mintable NFTs, enriching our investors' options.
The broader impact of real estate tokenization is significant, offering increased liquidity, reduced transaction costs, and enhanced market efficiency. A study by the World Economic Forum predicts that by 2027, 10% of the global GDP will be stored on blockchain technology, with real estate being a major component of this shift.
This adoption indicates a robust future where tokenization not only makes real estate investment more accessible but also more integrated with global financial markets, allowing for seamless international transactions and diversified portfolios.
Tokenization stands out as a revolutionary tool in real estate, providing property owners and investors with novel ways to manage and profit from their assets. As the technology matures and regulatory frameworks develop, the possibilities for tokenization in real estate will likely expand, further unlocking the potential of properties as both investment vehicles and sources of revenue.
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $1 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
By
Landshare Team
As blockchain technology matures, its potential extends beyond digital currencies into the broader domain of tokenizing real-world assets (RWAs). From real estate to artworks and even intellectual property, the ability to tokenize physical assets has opened up new possibilities for investment, ownership, and exchange.
A Boston Consulting Group report stated that the market size of the on-chain RWA market is expected to hit $16 Trillion by 2030. The massive market size showcases enormous possibilities for growth in the future.
The evolution of technology towards a tokenized economy requires robust cross-chain technologies that facilitate seamless interoperability among diverse blockchain platforms. Here, we will explore what a tokenized economy looks like, why tokenizing real-world assets is transformative, and the crucial role of cross-chain solutions in this burgeoning ecosystem.
Tokenization involves converting the rights to an asset into a digital token on a blockchain. These tokens represent ownership or a claim to the underlying asset, allowing them to be bought, sold, or traded on digital platforms. The process democratizes access to investment opportunities and enhances liquidity, transparency, and efficiency in transactions.
Almost every other tangible financial asset can be tokenized today. Thanks to blockchain technology, commodities, currencies, real estate properties, arts, and many other similar assets can be traded in their tokenized versions. The concept of tokenization gained popularity quickly, and a huge amount of credit goes to the benefits it brings to the table.
Increased Liquidity: Tokenization can transform traditionally illiquid assets like real estate or art into divisible and easily tradable tokens. This broadens the market and reduces entry barriers for investors, making the asset more tradable and, hence, comparatively more liquid. For example, platforms like Landshare allow investors to purchase fractions of real estate properties as tokens, which they can sell on secondary markets without the need for lengthy and complex real estate transactions. This method greatly enhances liquidity in a market traditionally dominated by high thresholds for entry and exit.
Enhanced Transparency: Using blockchain ensures that all transactions are recorded on an immutable ledger, reducing the risk of fraud and increasing trust. For instance, the buying and selling of real estate properties have traditionally been opaque processes with layers of brokers, inspectors, and legal checks. However, with tokenized real estate transactions, every transaction from initial purchase to subsequent sales is recorded transparently on the blockchain.
Streamlined Processes With Automation: Blockchain technology can automate many of the processes involved in asset management through smart contracts, reducing the need for intermediaries and lowering transaction costs. The process is on-chain and requires no paperwork, which resolves a huge issue inherent to the trade of tangible assets like real estate. A notable example here is Maecenas, which allows users to buy and sell shares in fine art using blockchain. This system eliminates the need for auction houses and brokers, thereby reducing fees and streamlining the entire investment process in art, a market traditionally inaccessible to average investors due to high costs and complex buying processes.
With the evolution of blockchain technology, the space is filled with many blockchain networks with distinct properties. It was important that these chains connected to each other to create a unified ecosystem, and that’s where Cross-chain systems came to the rescue.
Cross-chain technology enables blockchain networks to communicate and share information, assets, and value. This interoperability allows users to transact across various blockchains without the need to exchange tokens through a central exchange, enhancing the efficiency and scalability of blockchain applications by connecting otherwise isolated networks.
For instance, Polygon (MATIC) offers extensive cross-chain capabilities through its Polygon Bridge, enabling seamless asset transfers between the Ethereum (ETH) blockchain and Polygon sidechains. This feature supports the movement of ERC tokens, NFTs, and other digital assets, facilitating interoperability and scalability. By using Polygon's cross-chain bridges, users benefit from faster transaction speeds and lower fees compared to Ethereum's mainnet, while maintaining robust security.
Arbitrum (ARB) is another example where the Layer 2 scaling solution for Ethereum enhances its cross-chain capabilities primarily through compatibility with Ethereum's network. It allows users to execute Ethereum transactions more swiftly and at a lower cost, without sacrificing security. While it operates on top of Ethereum, Arbitrum doesn't have a native cross-chain bridge like Polygon but leverages Ethereum's security and connectivity.
Cross chain systems bring these benefits to the RWA sector further enhancing its reach. Tokenized assets could move across blockchain networks rather than limited to the native blockchain only. More the reach to multiple blockchains the more users it can cater.
Broader Market Access: RWA investors benefit from cross-chain systems by gaining access to a wider range of tokenized assets across multiple blockchains, optimizing their investment strategies. This not only broadens their market reach but also enhances liquidity in the RWA sector by including a diverse pool of investors.
Reduced Risk of Fragmentation: Cross-chain technology ensures interoperability across different blockchains, preventing market fragmentation and fostering a more unified ecosystem. Connectivity makes RWAs more accessible and prevents projects within the RWA sector from being isolated on single platforms, promoting broader adoption and integration.
Enhanced Scalability: Cross-chain solutions address scalability challenges that single blockchains face by distributing the load among multiple networks. The utilization of various networks’ strengths leads to more efficient handling of transactions and interactions, significantly enhancing the performance and scalability of RWA applications.
A significant advancement in cross-chain technology is the development of blockchain bridges, such as Polkadot and Cosmos, which aim to connect disparate blockchains to enable asset and data transfer. When the tech is integrated with the RWA sector, it brings significant results.
Cross-chain technology significantly enhances the Real World Asset (RWA) sector by improving liquidity and market access. By enabling seamless transactions across various blockchains, it allows investors to diversify their portfolios with a broader range of tokenized assets, such as real estate or commodities.
The volume of tokenized real estate assets like to increase largely due to improved interoperability provided by cross-chain platforms. This technology also reduces market fragmentation, creating a more cohesive and robust investment landscape, which further attracts a larger pool of global investors, driving the sector's growth and stability.
Cross-chain technology is crucial in the context of RWA because it enables interoperability between different blockchain platforms. This means that assets can move seamlessly across various blockchain networks, enhancing the functionality and reach of tokenized assets. Each blockchain would operate in isolation without cross-chain capabilities, limiting the potential for a truly global and integrated tokenized economy.
As more assets get tokenized on various blockchain platforms, interoperability becomes crucial. Cross-chain technology allows different blockchains to communicate and share information, enabling tokens and assets to move freely across diverse networks.
Integrating cross-chain technologies with tokenization efforts will likely redefine asset management and investment across multiple sectors. As regulatory frameworks evolve to accommodate these innovations, we can anticipate a more inclusive and efficient global market landscape.
As assets from real estate to artwork are tokenized, they become more accessible and liquid. Tokenization could unlock trillions in illiquid assets, significantly expanding global investment opportunities. According to a forecast by the World Economic Forum, the tokenized assets market could exceed $24 trillion by 2027.
Integration of multichain systems will enable these tokens to operate across different blockchain platforms, enhancing the functionality and reach of each tokenized asset. This interoperability is critical to building a seamless, efficient global marketplace, bridging diverse economic sectors and geographies, and setting the stage for a more inclusive financial ecosystem.
The potential of a tokenized economy facilitated by cross-chain technology represents a significant shift in how we perceive asset ownership and investment. As this ecosystem continues to evolve, it promises to bring more inclusivity, efficiency, and transparency to the global economy. The journey towards a fully integrated tokenized world is complex and fraught with challenges, but the benefits could redefine the economic landscape for future generations.
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $50 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
This site is operated by Landshare LLC, which is not a registered broker-dealer or investment advisor.
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