Polymesh
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For those who've heard of real estate tokenization but always wondered how it works – here we outline a step-by-step process! 👇🏼
Nuance aside, #tokenization of real estate broadly involves 4 steps:
1️⃣ Asset selection and evaluation:
Identifying the property and performing any necessary due diligence, including legal and financial assessment, valuation of the real estate asset, and a compliance review complete with any jurisdictional considerations.
2️⃣ Legal structure setup:
Setting up the appropriate legal framework and defining ownership rights, investor privileges, and regulatory requirements, including any compliance requirements for tokenized securities.
3️⃣ Token creation and platform integration:
Selecting an appropriate #blockchain plus any issuance or trading platforms as needed. Things to consider include fee considerations, the complexity of token creation and management, wallet systems, KYCL/AML procedures, and other factors relating to your unique business needs.
4️⃣ Token distribution and management:
Creating the real estate asset through an initial token offering. Once a real estate asset exists onchain, it can also be traded in secondary markets. From there, the focus will be on ongoing property management, dividend distribution, and compliance.
_ _
Tokenization of any #RWA is a complex process with technical, legal, financial, and functional implications. Depending on what blockchain you choose, it's going to look a little different (if you're using Polymesh, you won't be as reliant on #SmartContracts).
Issuers also need to consider what makes sense for the legal setup. Some may look to copy traditional #RealEstateInvesting and use a Special Purpose Vehicle or #SPV to isolate financial risk.
Nuance aside, #tokenization of real estate broadly involves 4 steps:
1️⃣ Asset selection and evaluation:
Identifying the property and performing any necessary due diligence, including legal and financial assessment, valuation of the real estate asset, and a compliance review complete with any jurisdictional considerations.
2️⃣ Legal structure setup:
Setting up the appropriate legal framework and defining ownership rights, investor privileges, and regulatory requirements, including any compliance requirements for tokenized securities.
3️⃣ Token creation and platform integration:
Selecting an appropriate #blockchain plus any issuance or trading platforms as needed. Things to consider include fee considerations, the complexity of token creation and management, wallet systems, KYCL/AML procedures, and other factors relating to your unique business needs.
4️⃣ Token distribution and management:
Creating the real estate asset through an initial token offering. Once a real estate asset exists onchain, it can also be traded in secondary markets. From there, the focus will be on ongoing property management, dividend distribution, and compliance.
_ _
Tokenization of any #RWA is a complex process with technical, legal, financial, and functional implications. Depending on what blockchain you choose, it's going to look a little different (if you're using Polymesh, you won't be as reliant on #SmartContracts).
Issuers also need to consider what makes sense for the legal setup. Some may look to copy traditional #RealEstateInvesting and use a Special Purpose Vehicle or #SPV to isolate financial risk.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
