This is where “Tokenization” comes into play. Tokenization is set to be the hope for future investors that reduces illiquidity and also many other challenges involved, ensuring a smooth, successful business. The demand and popularity for tokenized assets are rapidly growing by each day, and it is believed to disrupt the real estate industry.
- Broad investor base- With real world assets, it is highly impossible to fraction the ownership of the property or sell a fraction of the property quickly and efficiently. Whereas, with tokenization, comes fractional ownership which opens doors to a broad investor base. Tokenization paves way for new investors to participate in the ownership of a property and widen their investments.
- No geographical restrictions- A blockchain based tokenization platform removes geographical restrictions and comes with automated KYC/AML verification, which allows global participants to involve and secure transactions can happen anywhere around the world.
- Quick settlements- Tokenization platforms come along with smart contracts which helps with instant peer-peer transactions and also allows a 24/7 trading process, which initiates quick settlements.
- Easier amplification- As tokenization is a completely digitized process, it doesn’t involve any traditional infrastructure challenges and enables faster, easier fundraising process.
- Blockchain ledger- The blockchain ledger allows store multiple records in the platform for each shareholder such as the share and ratio of profits, voting rights distribution, buyback rights, etc which helps avoid any confusion in the future and enables smooth business.
- No involvement from third parties/ transaction fees- Tokenization allows peer-peer transactions from and to anywhere around the world, which removes third party involvement, thereby eliminating transaction fees and risk factors.
- Transparency- Tokenization enables easier management of asset liabilities and provides transparency to the users.
- Regulatory framework- Tokenization platforms are legally compliant and comes with necessary regulatory framework, which helps with secure, smooth business and blockchain additionally offers immutability which completely protects the investor’s data.