How does real estate backed token work?
Real estate is one of the most active, wide-spread industries for which the demand is never ending. But the industry is facing a bit of a downfall due to the several challenges involved for the investors. The advent of tokenization of real estate assets eliminates these major barriers and provides a hassle-free, risk-free business experience to the investors. How does real estate backed token work? Let’s find out.
How tokenization works?
Tokenization is the process where a real world real estate asset property value is converted into digital tokens. The tokens represent a value of an individual property or shares from various properties. The shares and as well the ownership is divided among investors. All the real estate backed tokens are underpinned by blockchain technology that helps record, verify and secure transactions by a chain of blocks coded with cryptography.
To let it down in a more simpler way, here is an example,
If a person wants to tokenize a property that is 2,00,000 sq feet worth
$60M, he/she can divide the property into multiple shares
i.e each share= per sq feet, which means the property is divided into 200,000 shares and each shareholder will be owning a value of $3000.
Thus tokenization allows fractional ownership and helps owners multiply the profit values with minimal risks and without any hassle. Tokenization also removes geographical barriers and allows global access, and helps with instant, efficient, seamless and highly-secure business experience which will take the real estate business to the next phase. If tokenizing your real estate asset is on your mind, look no farther! Blockchain App factory has solutions for all your tokenization needs.
