A real estate digital token is often issued as an Ethereum-based smart contract utilizing the open-source ERC-20 standard. These tokens represent fractional ownership of real property, allowing investors worldwide (with some regional exceptions) to invest in real estate.

Real Estate Digital Token

- Real Token LLC has created a system for tokenizing real property in the United States that allows a token holder to purchase and retain all legal rights and protections that are provided by traditional ownership of the real estate
- Individual investors are now able to invest in real estate like houses, complexes, and apartments with a smaller investment

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blockchain technology as it enables a real estate token to act as a digital security, and greatly lowers the financial barriers to accessing real estate by lowering the price of admission. 

Real Estate Tokenization

- Assets such as real estate have a high barrier to entry due to large upfront capital required
- Frationalizing such assets democratizes its access for smaller investors

Fractionalization Ownership 

- Tokenization enables exposure to individual real estate assets. Thus, instead of investing in the whole sector, portfolios can be customized down to single building

Customizability

- Example: $100,000 worth of real estate property, will divide into 100 token and each token will cost $1,000
- investors will get dividend from rents amount by how much share you have

Concepts

Used Case # 1

● Fractionalization increases the pool of potential investors and can unlock global investor base 
● Secondary markets also facilitate additional liquidity 
● Liquid assets command a premium and can increase asset value

Liquidity

- Regulatory Restrictions and license: limited of who can buy, different law on each citizenship.
- Volume and liquidity: low liquidity and a high illiquidity premium for shares in single buildings due to the small market size.
- Listing on Exchanges: list on the international exchange can be hard, take time, and high listing fee costs
- Marketing and Demand: Marketing is one of the most important for STO. Reach target, lack of demand


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