Why Tokenize?
The Benefits of Tokenization of Real-World Assets
Benefits of Tokenized Real Estate
Increased Liquidity
Traditional real estate investments are illiquid, usually requiring significant time and effort to buy or sell. Real estate tokenization has changed this process dramatically. Dividing property ownership into smaller, easily tradable tokens allows investors to buy or sell fractions of real estate assets, providing once unimaginable liquidity. This democratizes real estate investing, making it accessible to a wider range of people.
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Fractional Ownership
Tokenization enables fractional ownership, which means that multiple investors can collectively own a property by holding tokens. This not only reduces the financial barrier to entry but also diversifies risk. It allows investors to spread their capital across various properties or parts of a property, mitigating the impact of market fluctuations.
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Global Accessibility
Until now, real estate has been an investment accessible primarily to high-net-worth individuals and institutions. Tokenization unlocks real estate opportunities to a global audience, including retail investors. Any individual with access to the internet can invest in real estate assets, promoting financial inclusion and expanding investment possibilities.
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Transparency and Security
Blockchain technology offers unequaled transparency and security. All transactions and ownership records are recorded on an immutable ledger, reducing fraud and disputes. Smart contracts, which are embedded in tokens, automate processes such as rent collection and distribution of profits, increasing trust and efficiency.
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Market Access 24/7
Unlike traditional real estate markets that operate within specific time zones and business hours, real estate tokenization platforms provide 24/7 market access. Investors can buy, sell, and monitor their real estate holdings at any time, offering unprecedented flexibility and responsiveness to market dynamics. This accessibility aligns with the global nature of cryptocurrency markets and accommodates investors who may be in different time zones.
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Dividend Distribution Efficiency
Tokenized real estate assets streamline the distribution of dividends to investors. Smart contracts can be programmed to automatically execute dividend payouts based on predefined criteria, ensuring timely and accurate distribution. This efficiency benefits both property owners and investors, eliminating the need for intermediaries and reducing administrative overhead.
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Automated Compliance
Real estate transactions often involve complex legal and regulatory requirements. Real estate tokenization platforms integrate compliance features directly into smart contracts, automating processes such as identity verification and regulatory compliance. This automation ensures that transactions comply with relevant regulations, reducing the risk of legal complications and facilitating smoother, more secure transactions.
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Cost Efficiency
Tokenization eliminates many intermediaries which are usually associated with real estate transactions, such as brokers, notaries, and banks. This significantly reduces transaction costs, making it a cost-effective way to invest in and manage real estate. It also streamlines administrative processes, reducing paperwork and administrative overhead.
Benefits of Tokenized Gold
Greater Accessibility
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Fractionalized ownership through tokenization allows for smaller-value purchases, such as one fraction of a gram, which makes gold-based financial products more accessible to billions of people across the world.
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Enhanced Transparency
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Storing immutable ownership records on a blockchain ledger enables provenance tracking and auditable data trails to verify authenticity and eliminate the need to trust custodians with holding paper certificates.
Increased efficiencies and reduced costs—Streamlining backend processes with programmable smart contracts speeds up verification and reduces settlement costs. For example, atomic settlement eliminates the need for T+2 settlement by syncing payment with asset delivery.
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Deeper Liquidity
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Interoperability across various blockchain-based markets and composability of tokenized financial products within a blockchain ecosystem make it easier for tokenized gold products to achieve far greater liquidity than is possible if they were siloed across fragmented markets.
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Unlock Innovation
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Combining a high-quality asset with the power of blockchain technology helps unlock exciting new financial products that better serve everyone, from underserved investors to leading institutions.
