Real World Asset Tokenisation - 1/10

Real World Asset (RWA) #tokenisation shall prove to be one of the most efficient business cases of #nft and #web3 in our times.

I am starting a series to explore 10 of these use cases for our #community and anyone who is interested to explore this subject or implement the same in their #business?

REAL ESTATE TOKENISATION?

A lot has been written and discussed about this subject with various perspectives. According to me, #realestate tokenization has the highest potential to be the most widely accepted use case. Easier said than done, as it’s quite complex and there are lot of dependencies and compliances around it.?

Let us first see how can we tokenize these assets:

There are primarily 2 types of tokenization in real estate

1.) Fractional Ownership (FO) – A group of individuals/entities pool funds to acquire real estate and share the ownership mutually. These tokens are like a stock share, meaning that they must be registered. FO tokens behave more like stocks as they represent a share of the real estate project rather than a single real or virtual item.

For example, if we have 30 tokens of a real estate company that invests in an apartment building, we will be sent a share at the end of an earnings cycle that represents 30% of net profit.

2. Early Asset (EA) – It is also called Asset Tokenization where one is converting real-world assets into digital tokens. The benefits of having an AT are that it highly liquidity, efficient, more accessible, and transparent. This is much more suitable for Real Estate…

For example, we have an apartment and are in urgent need of money. We need $40,000, whereas our apartment costs $200,000. This is where we can bring Asset Tokenization. AT can help us convert our $200,000 into 200,000 tokens where each token can carry a 0.0005% share. AT on blockchain platforms enable support for smart contracts. If someone purchases the token, they shall get 0.0005% of ownership in the asset. On the other hand, purchasing 80,000 tokens means the user will get the ownership of 40% of the asset

Fractional Property Ownership is one such application that will provide new opportunities to NFT holders. Homeowners can convert the property they own into an NFT which they can further divide into tokens. These tokens would allow the property to have multiple buyers. Homeowners can sell the property to investors by issuing them tokens. The investors can hold onto these tokens and receive rent for doing so.

Real Estate NFTs can also be used for mortgages. Someone who owns an NFT property can apply for a loan from a lending platform. Similar kinds of platforms can be developed for NFTs where lenders can receive payments using blockchain.

Real Estate NFT works the same as the Art NFT since it follows the same procedure when it comes to buying it. Such as minting, bidding, etc.

ADVANTAGES – Easily traceable, secure records of ownership, allow purchase and sale of real estate items, there is a lot of hassle when you buy a real-world real estate (paperwork, etc.), but with NFT all the transaction process is streamlined, allowing the buyer to assume ownership of a piece of real estate within minutes.

DISADVANTAGES – Just like in the crypto world, the real estate NFTs are also speculative, and highly volatile. Real Estate NFTs are riskier for investments sometimes.?Plus there’s a lot of dependency on government policies and compliances.

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Market Size and Growth Potential-

According to Brandessence market research, the Market growth of Real Estate NFT is growing at 31.2% CAGR to 2028. CAGR stands for Compound Annual Growth Rate. It shows the average rate of return on one’s investments.

Data from?nonfungible.com?indicates that there has been approximately USD 300 million in NFT sales in the December of 2021. These rates will skyrocket in the next few years.

When it comes to Regional Analysis, North America is expected to capture the largest share of the global metaverse real estate market. For example, in December 2021, A company in New York Republic Realm announced that it had spent a record-breaking of around 4.3 million on digital land through The Sandbox, one of the numerous virtual world websites. Another example is a $2.4 million purchase by a company Decentraland.

Another research-based on Brandessence shows that Metaverse’s market size could hit $596.47 Billion by 2027.

Reference - Globalnewswire, PRNewswire

We, at UnicusOne are building #web3 modules which would help traditional #web2 companies along with startups t transform into #web3 domain swiftly and seamlessly using our #web3asaservice (#waas) protocol. We help achieve quick Go-To-Market, with a very low entry cost (as we follow transaction led pricing) without any hassle of hiring developers, smart contract audit and maintaining the Web3 infra.

Platforms and Companies in the Domain

a. Decentraland

c. OpenSea

d. Voxels (formerly Cryptovoxels)

e. Polka City

f. Atomic Market

g. Upland Software

h. Omni Psi

i. The Sandbox

j. Real IT