Basic principles to understand the tokenization of real estate assets
The tokenization of real estate assets is a great opportunity, but few people know what it is, its benefits and the risks it represents.
BY EUNICE MARTINEZ
CATEGORY: REAL ESTATE MARKET PUBLISHED: DECEMBER 28, 2022
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Real estate developers and investors can find benefits from Tokenization.
In order to understand the tokenization of assets, the first thing to do is to introduce yourself to its basic principles, to later understand what its benefits are and to be able to focus on the real estate sector.
Ignacio Alonso, Coo of Moneyfi Technologies LTD, developer of Datium IntelliHealth, considers that “it is a tool that allows access to a greater number of small investors, who otherwise would not be able to access it, resulting in greater liquidity for projects and energizing the sector”.
In a conversation with Real Estate Market, he described that the tokenization of assets allows an asset to be easily divided into smaller units, representing ownership, promoting the democratization of investment in historically liquid assets and generating fairer markets.
He indicated that whether it is paintings, digital media platforms, real estate, company shares or collectibles, everything can be tokenized.
“Simply put, it is the process by which an issuer creates digital tokens on a blockchain network, which represent digital or physical assets. Blockchain ensures that once someone buys tokens that represent an asset, no authority can erase or change their ownership; the ownership of that asset remains completely unchanged.
NFTs offer new opportunities for companies and developers
He explained that it is important to mention that there are two main categories of token types, fungible and non-fungible.
A fungible asset has two main characteristics:
Tradable: each unit of the tokenized asset has the same market value and validity.
Divisible: A fungible cryptocurrency can be divided into as many decimal places as were configured during its issuance. Each unit will have the same value and validity.
On the other hand, the non-fungible token (NFT) is:
Non-tradeable: They cannot be replaced with tokens of the same type because each token represents a unique value.
Not Divisible: NFTs are typically not divisible, although F-NFTs offer fractional ownership of NFTs, such as expensive art or commercial real estate.
Unique – Each token is distinct from another token of the same type and has unique information and attributes.
According to the Moneyfi expert, a Software Factory company that specializes in blockchain and crypto technologies, variables such as greater liquidity, faster settlement, lower costs and better risk management, without neglecting transparency, traceability and greater efficiency. , are the main benefits that can be attributed to this financial tool.
He added that another of the remarkable benefits is the elimination of territorial barriers, simplifying international transactions and facilitating all document management through digital platforms.