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December 21, 2023
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By
Landshare Team
The RWA Token is a brand-new real estate token coming soon to the Landshare ecosystem. Backed by a variety of yield generating real estate assets, the RWA Token streamlines and simplifies investment for all types of users! With easy entry, healthy liquidity, and additional utilities, the RWA Token embodies what real estate on the blockchain should look like.
In this article, we will take a closer look at the tokenomics, utilities, and inner workings of this new system. If you’re new to Landshare or would like to learn more about the RWA Token as whole, please read our Feature Preview article for all of the details.
Upon launch of the RWA Token update, the Landshare ecosystem will feature two different tokens: the Landshare Token (LAND) and the Landshare RWA Token (LSRWA). Each token serves a different role in the ecosystem.
The LAND Token is the platform governance and utility token, serving as a means of exchange, voting, payment, and access. The RWA Token, on the other hand, is a real estate backed security token that represents the value of RWAs. They are separate but equally important components of Landshare.
In the coming sections, we will be covering the unique utilities of the Landshare RWA Token. To learn more about the platform utility token, LAND, please click here.
Real Estate Backed
Each RWA Token represents a share of a pool of US-based real estate assets. This is made possible through tokenization, which is the process of converting real world assets (RWAs) into tokens on the blockchain. The value of each RWA Token grows proportionally with the value of underlying properties and the cash flow they produce, allowing investors to benefit by simply holding over time.
Unlike other cryptocurrencies, the RWA Token represents a legally binding share in the property holding company. This means that as an RWA holder, you are entitled to the same legal protections as an investor in a traditional company. This makes the RWA Token a simple and secure way to gain exposure to real estate directly on-chain.
DeFi integrations
Our goal with the RWA Token is to leverage the unique advantages of being an on-chain asset. This includes the ability to trade instantly and automatically with decentralized exchanges (DEXes), and to leverage your investment utilizing other systems, including borrow/lend protocols. In this way, the RWA Token is designed to work like any other DeFi asset.
Landshare NFTs
The existing NFT ecosystem will transition from our existing Asset Token to the new RWA Token. Landshare NFTs allow you to stake RWA Tokens and earn LAND rewards by upgrading and maintaining your virtual property. These rewards stack with what you already earn from the RWAs themselves and are a great way to boost your returns. For more information on the NFT ecosystem, see here.
An Alternative Safe Haven
The Landshare RWA Token offers something for every crypto trader, even if they aren’t interested in real estate investment. Unlike USD stablecoins, the Landshare RWA Token is transparently backed 1:1 by RWAs and can grow in value over time. The asset-backed nature of RWA Tokens means they are not subject to the wild swings commonly seen in the crypto space. In this way, RWA Tokens offer an excellent safe haven for crypto investors.
The RWA Token is designed to maintain a relative peg with the underlying real estate assets it represents. Each RWA Token represents a share of the pool of underlying properties, which also includes the rental income they produce. A simple calculation is used to determine the value of each RWA Token:
RWA Token Value = (Total Property Value + Total Cash Reserves) / Circulating RWA Token Supply
The RWA Token can be bought or sold on the Landshare platform for its underlying value based on the calculation above. This ensures adherence to the value of underlying assets and price stability in secondary markets such as DEX trading.
Now that we understand how the RWA Token’s value is determined, let’s break down each component of the calculation.
Total Property Value
The value of properties is estimated using Corelogic AVM, which utilizes real estate information such as comparable sales, property characteristics, and price trends to provide a current estimate of market value for a specific property. Corelogic AVM is widely used in the real estate industry to estimate the value of properties, including by clients like Realtor.com.
The estimated values of each property are added together and automatically brought on-chain via Chainlink Any API and Chainlink Automation. This allows our smart contracts to store the latest price of the properties at all times.
Total Cash Reserves
In addition to property values, the RWA Token will benefit from the rental income generated by properties. Cash reserves may include USD in a bank account or stablecoins on-chain. Similar to property values, every time the cash reserves change, the updated total will be stored on-chain.
Combining total cash reserves and total property value determines the total underlying RWA in the pool, so the final step of the calculation is to determine the value of each individual token.
Circulating RWA Supply
The circulating RWA supply will include all tokens sold to investors. This total does not include unsold tokens from the offering. As tokens are sold from the offering, circulating supply will increase. Meanwhile, the proceeds enter the cash reserves, maintaining equilibrium as supply expands. In some cases, circulating supply may be reduced through redemption events.
A real estate-backed token should look and feel just like any other token on the blockchain. We’ve designed the RWA Token with that in mind — focusing on ease of use, DeFi integration, healthy liquidity, and additional utilities.
The RWA Token will also boost the utility of our existing LAND utility token. Each token serves a complimentary function in the Landshare ecosystem, and both are equally crucial to the functioning of our platform. To read more about the interaction between LAND and the RWA Token, check out our previous Development Update.
We expect to determine a launch window very soon. In the meantime, you can look forward to upcoming events and campaigns to help get the word out about the RWA Token! If you haven’t already, be sure to check out our Feature Preview article for more information on the RWA Token.
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The real estate market is witnessing a transformative shift with the introduction of blockchain technology, particularly through the concept of tokenization. This innovative approach is redefining property ownership, offering new opportunities for investment and liquidity.
If you are an investor in real estate, you might have reaped the benefits of tokenized real estate investments. However, real estate tokenization not only opens a new avenue for real estate investors but also brings forth advantages to property owners.
Tokenization allows property owners to convert real estate assets into digital tokens, thereby simplifying transactions and broadening investor access. Liquidity and fractionalization are key benefits in tokenized real estate but for property owners within the ecosystem could see more than this.
In the following blog, let's explore more compelling use cases of tokenization for property owners including house flipping, partial sales, and tokenizing cash flows, backed by real statistics and figures to illustrate its growing impact.
What Benefits Real Estate Tokenization Bring?
Tokenization is a process of creating a digital identity of a tangible financial asset on blockchain which is unique and anonymous. This method takes the value of an asset on a chain. It brings benefits such as fractional ownership, liquidity, enhanced security and transparency. Currencies, commodities, real estate properties and art pieces are the common tokenized assets.
As an investor, you can enjoy investing in multiple assets through fractional ownership reaping the benefits of varied returns on respective assets. Real estate sector is traditionally one of the most illiquid ones since it takes time to sell off a property which requires time and effort but tokenization solves such pain points.
We have already discussed the pros and cons of tokenized real estate investments in earlier pieces. Along with the investors, tokenization resolves issues for property owners. The tokenized real estate properties can be sold off in units that increase higher chances of sale. Following are more crucial advantages of tokenized real estate for property owners.
House Flipping
Traditionally the practice of purchasing properties, renovating them and then selling them in profit is house flipping. It needs a hefty amount upfront and since the market turns or unexpected costs are also crucial factors, there are risks included in the process. But inclusion of tokenization could mitigate these risks to some extent also resolving issues related to liquidity.
The house flippers could sell fractional shares of the property as tokens in exchange for the required amount. Let’s say a flipper buys a property for $300,000 and needs $50,000 for renovations. Now they could issue 350,000 tokens valued at $1 each to raise the renovation funds. This way they can not only speed up the process but also manage to diversify the risk.
Partial Sales
Tokenization also allows partial sales that enable property owners selling a fraction of their property to different investors. Though the method could be useful for any real estate property, the markets with high-value properties such as the United States can benefit the most. This way the property owners bear no debt and it becomes a great alternative to home equity line of credit (HELOC).
Property owners can sell out their shares of property to a pool of investors after tokenizing it. For instance, a property owner takes 60% ownership and sells the rest 40% of the property. Along with the democratization of real estate investment, this approach also provides liquidity to owners to invest in more ventures or even make improvements in the real estate property.
Tokenizing Cash Flow
One of the innovative ways to secure the funding along with providing regular income to investors is through tokenization of rental properties’ cash flows. You as an owner of a real estate property that generates $10,000 per month through rent could use the method and tokenize this case flow while offering tokens that represent a share in the rental income. This method attracts investors seeking stable returns without the need for large capital investments.
A Deloitte report states that by offering such fractional ownership and investment opportunities, tokenization could grow the liquidity of global real estate assets by over $1.4 trillion.
Benefits of Third-Party Tokenization with Landshare
At Landshare, we've dedicated ourselves to democratizing real estate investment, and our efforts have culminated in the Landshare RWA Token. This innovative product empowers anyone to generate passive income from real-world assets with an investment as low as $1.
The benefits of our tokenization process extend beyond just investors. Property owners—whether individuals, corporate entities, investment clubs, or funds—now have a powerful tool at their disposal. Through tokenization, both investors and property owners can cultivate a relationship that is mutually advantageous.
As we build on our strong base of RWA investors, our next objective is to enable property owners to tokenize their assets through the Landshare platform. This capability will allow them to raise funds and secure loans against their properties, enhancing the value provided to our existing LSRWA investors.
Tokenization offers property owners a range of strategic advantages. It isn't merely about listing properties for sale. Its true value lies in its ability to provide liquidity and allow for the fractional ownership of properties. Alternatively, they can borrow against the future cash flow from their properties, maintaining their stake while obtaining upfront cash.
Landshare has always been taking bold and unique steps for the sake of community and is now looking to include property owners, who remain at the other end of spectrum, along with the investors.
This initiative is set to broaden the array of properties available on our platform, diversify our offerings with new property types including vacation homes and commercial spaces, and expand our reach beyond the U.S. It also introduces new mintable NFTs, enriching our investors' options.
The Broader Impact and Future Outlook
The broader impact of real estate tokenization is significant, offering increased liquidity, reduced transaction costs, and enhanced market efficiency. A study by the World Economic Forum predicts that by 2027, 10% of the global GDP will be stored on blockchain technology, with real estate being a major component of this shift.
This adoption indicates a robust future where tokenization not only makes real estate investment more accessible but also more integrated with global financial markets, allowing for seamless international transactions and diversified portfolios.
Tokenization stands out as a revolutionary tool in real estate, providing property owners and investors with novel ways to manage and profit from their assets. As the technology matures and regulatory frameworks develop, the possibilities for tokenization in real estate will likely expand, further unlocking the potential of properties as both investment vehicles and sources of revenue.
About Landshare
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $1 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
As blockchain technology matures, its potential extends beyond digital currencies into the broader domain of tokenizing real-world assets (RWAs). From real estate to artworks and even intellectual property, the ability to tokenize physical assets has opened up new possibilities for investment, ownership, and exchange.
A Boston Consulting Group report stated that the market size of the on-chain RWA market is expected to hit $16 Trillion by 2030. The massive market size showcases enormous possibilities for growth in the future.
The evolution of technology towards a tokenized economy requires robust cross-chain technologies that facilitate seamless interoperability among diverse blockchain platforms. Here, we will explore what a tokenized economy looks like, why tokenizing real-world assets is transformative, and the crucial role of cross-chain solutions in this burgeoning ecosystem.
Tokenization involves converting the rights to an asset into a digital token on a blockchain. These tokens represent ownership or a claim to the underlying asset, allowing them to be bought, sold, or traded on digital platforms. The process democratizes access to investment opportunities and enhances liquidity, transparency, and efficiency in transactions.
Almost every other tangible financial asset can be tokenized today. Thanks to blockchain technology, commodities, currencies, real estate properties, arts, and many other similar assets can be traded in their tokenized versions. The concept of tokenization gained popularity quickly, and a huge amount of credit goes to the benefits it brings to the table.
Advantages of Tokenized Economy Bringing Financial Empowerment
Increased Liquidity: Tokenization can transform traditionally illiquid assets like real estate or art into divisible and easily tradable tokens. This broadens the market and reduces entry barriers for investors, making the asset more tradable and, hence, comparatively more liquid.For example, platforms like Landshare allow investors to purchase fractions of real estate properties as tokens, which they can sell on secondary markets without the need for lengthy and complex real estate transactions. This method greatly enhances liquidity in a market traditionally dominated by high thresholds for entry and exit.
Enhanced Transparency: Using blockchain ensures that all transactions are recorded on an immutable ledger, reducing the risk of fraud and increasing trust. For instance, the buying and selling of real estate properties have traditionally been opaque processes with layers of brokers, inspectors, and legal checks.However, with tokenized real estate transactions, every transaction from initial purchase to subsequent sales is recorded transparently on the blockchain.
Streamlined Processes With Automation: Blockchain technology can automate many of the processes involved in asset management through smart contracts, reducing the need for intermediaries and lowering transaction costs. The process is on-chain and requires no paperwork, which resolves a huge issue inherent to the trade of tangible assets like real estate.A notable example here is Maecenas, which allows users to buy and sell shares in fine art using blockchain. This system eliminates the need for auction houses and brokers, thereby reducing fees and streamlining the entire investment process in art, a market traditionally inaccessible to average investors due to high costs and complex buying processes.
With the evolution of blockchain technology, the space is filled with many blockchain networks with distinct properties. It was important that these chains connected to each other to create a unified ecosystem, and that’s where Cross-chain systems came to the rescue.
Cross-chain technology enables blockchain networks to communicate and share information, assets, and value. This interoperability allows users to transact across various blockchains without the need to exchange tokens through a central exchange, enhancing the efficiency and scalability of blockchain applications by connecting otherwise isolated networks.
For instance, Polygon (MATIC) offers extensive cross-chain capabilities through its Polygon Bridge, enabling seamless asset transfers between the Ethereum (ETH) blockchain and Polygon sidechains. This feature supports the movement of ERC tokens, NFTs, and other digital assets, facilitating interoperability and scalability. By using Polygon's cross-chain bridges, users benefit from faster transaction speeds and lower fees compared to Ethereum's mainnet, while maintaining robust security.
Arbitrum (ARB) is another example where the Layer 2 scaling solution for Ethereum enhances its cross-chain capabilities primarily through compatibility with Ethereum's network. It allows users to execute Ethereum transactions more swiftly and at a lower cost, without sacrificing security. While it operates on top of Ethereum, Arbitrum doesn't have a native cross-chain bridge like Polygon but leverages Ethereum's security and connectivity.
Cross chain systems bring these benefits to the RWA sector further enhancing its reach. Tokenized assets could move across blockchain networks rather than limited to the native blockchain only. More the reach to multiple blockchains the more users it can cater.
Benefits of Cross-Chain Solutions Within RWA Sector
Broader Market Access: RWA investors benefit from cross-chain systems by gaining access to a wider range of tokenized assets across multiple blockchains, optimizing their investment strategies. This not only broadens their market reach but also enhances liquidity in the RWA sector by including a diverse pool of investors.
Reduced Risk of Fragmentation: Cross-chain technology ensures interoperability across different blockchains, preventing market fragmentation and fostering a more unified ecosystem. Connectivity makes RWAs more accessible and prevents projects within the RWA sector from being isolated on single platforms, promoting broader adoption and integration.
Enhanced Scalability: Cross-chain solutions address scalability challenges that single blockchains face by distributing the load among multiple networks. The utilization of various networks’ strengths leads to more efficient handling of transactions and interactions, significantly enhancing the performance and scalability of RWA applications.
A significant advancement in cross-chain technology is the development of blockchain bridges, such as Polkadot and Cosmos, which aim to connect disparate blockchains to enable asset and data transfer. When the tech is integrated with the RWA sector, it brings significant results.
Cross-chain technology significantly enhances the Real World Asset (RWA) sector by improving liquidity and market access. By enabling seamless transactions across various blockchains, it allows investors to diversify their portfolios with a broader range of tokenized assets, such as real estate or commodities.
The volume of tokenized real estate assets like to increase largely due to improved interoperability provided by cross-chain platforms. This technology also reduces market fragmentation, creating a more cohesive and robust investment landscape, which further attracts a larger pool of global investors, driving the sector's growth and stability.
The Need for Interoperability in the RWA Sector
Cross-chain technology is crucial in the context of RWA because it enables interoperability between different blockchain platforms. This means that assets can move seamlessly across various blockchain networks, enhancing the functionality and reach of tokenized assets. Each blockchain would operate in isolation without cross-chain capabilities, limiting the potential for a truly global and integrated tokenized economy.
As more assets get tokenized on various blockchain platforms, interoperability becomes crucial. Cross-chain technology allows different blockchains to communicate and share information, enabling tokens and assets to move freely across diverse networks.
The Future of Tokenized Economies and Multi Chain Integration
Integrating cross-chain technologies with tokenization efforts will likely redefine asset management and investment across multiple sectors. As regulatory frameworks evolve to accommodate these innovations, we can anticipate a more inclusive and efficient global market landscape.
As assets from real estate to artwork are tokenized, they become more accessible and liquid. Tokenization could unlock trillions in illiquid assets, significantly expanding global investment opportunities. According to a forecast by the World Economic Forum, the tokenized assets market could exceed $24 trillion by 2027.
Integration of multichain systems will enable these tokens to operate across different blockchain platforms, enhancing the functionality and reach of each tokenized asset. This interoperability is critical to building a seamless, efficient global marketplace, bridging diverse economic sectors and geographies, and setting the stage for a more inclusive financial ecosystem.
The potential of a tokenized economy facilitated by cross-chain technology represents a significant shift in how we perceive asset ownership and investment. As this ecosystem continues to evolve, it promises to bring more inclusivity, efficiency, and transparency to the global economy. The journey towards a fully integrated tokenized world is complex and fraught with challenges, but the benefits could redefine the economic landscape for future generations.
About Landshare
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $50 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
The advent of blockchain technology heralds a seismic shift in the real estate sector, promising unparalleled liquidity and accessibility through tokenizing real-world assets (RWAs). Traditionally we have seen the real estate sector as an illiquid asset class with high entry barriers but now it is reimagined by integrating on-chain secondary market trading of RWA tokens.
According to CoinMarketCap, the market cap of real-world asset (RWA) tokens stands above $53.7 Billion. This substantial market cap shows us that the RWA sector in the crypto market is proliferating. The high pace of growth ensures that it will soon overlay a notable portion of the traditional real estate market.
We can see how the RWA narrative has taken crypto space by the storm, and it has made a massive leap in the financial landscape. It is making tangible financial assets such as real estate investments more fluid, transparent, and accessible to a broader spectrum of investors. The amalgamation of RWA tokens with secondary market trading brings unprecedented advantages for you in the highly lucrative real estate investment sector.
We can understand secondary market trading as trading of assets among buyers and sellers rather than with the companies or projects. A budding project in the crypto space launches a token through either an ICO, IEO, or IDO, which primarily trades native tokens in exchange of raising funds from investors. After the launch, when these tokens are up for trade among traders, it becomes a secondary market, and the trading becomes secondary market trading.
NYSE and NASDAQ are, for instance, secondary market trading platforms, as they offer you to trade or invest in stocks. On the same note, trading on both centralized and decentralized crypto exchanges falls within secondary market trading. We can trade Bitcoin on crypto exchanges such as Coinbase or buy or sell Ethereum on decentralized exchanges like Uniswap.
How Does RWA Token Secondary Market Trading Affect the Real Estate Sector?
Real-world assets (RWAs) refer to objects possessing tangible or intangible value, including but not limited to gold, fine art, and real estate. In 2024, the scope of these assets linked to the real world is set to broaden beyond the confines of physical space. The advancement of blockchain technology makes the expansion possessive, providing a unique on-chain identity to traditional assets. This innovation creates a novel concept known as the real-world asset token.
The global real estate market is over $630 Trillion today and is continually growing. It is expected to hit $729 Trillion by 2028. This also makes real estate investments one of the most lucrative investment vehicles due to huge returns, but they do come with their own shares of hassle.
The real estate market is illiquid, and even a single transaction of buying or selling a property could take weeks or even months. In addition, it takes time to complete the extensive paperwork required for a transaction, making the whole process inefficient.
With the introduction of real estate-backed RWA tokens, real estate property transactions can now be carried out faster, more transparently, and more efficiently. There's more to the phenomenon than just that; let's delve into the benefits of trading RWA tokens in secondary markets.
- Fractional Ownership: A Gateway to Enhanced Liquidity: The concept of fractional ownership, enabled by RWA tokens, demystifies real estate investment, allowing for the division of property into purchasable tokens. This approach significantly lowers investment thresholds, inviting participation from a wider demographic. The fractionalization of assets thus catalyzes market liquidity, with smaller investment portions facilitating quicker and more frequent transactions.
- Streamlining Transactions: The Efficiency Paradigm: Blockchain technology accelerates the transaction process, cutting through the red tape that often encumbers real estate dealings. The traditional weeks-long wait for deal closure is condensed into transactions that can settle in minutes or hours, thanks to smart contracts and on-chain verifications. This efficiency not only boosts market liquidity but also enhances the appeal of real estate as an investment vehicle, promising quicker returns on investment.
- Global Market Access: Expanding the Investor Pool: Tokenization propels real estate into the global market, offering investment opportunities beyond geographical confines. This global accessibility attracts diverse investors, further invigorating market liquidity. The borderless nature of blockchain facilitates an influx of capital from international investors, diversifying the investment base and stabilizing the market against local economic fluctuations.
- Democratizing Real Estate Investment: The democratization of real estate investment through tokenization is perhaps its most revolutionary aspect. By breaking down financial barriers to entry, RWA tokens open the real estate market to small and medium investors, previously sidelined by the substantial capital requirements of property investment. This inclusive approach broadens the investor spectrum and instills a more dynamic and participatory market environment.
- Cost Efficiency: Reducing the Financial Burden: Implementing smart contracts and eliminating intermediary fees through blockchain transactions lead to significant cost reductions. These savings extend to buyers and sellers, making investments more attractive and accessible. Furthermore, the reduced costs associated with transactions and management of real estate investments ensure a more efficient allocation of resources, optimizing returns for investors.
- Security and Transparency: Building Trust: Blockchain's inherent transparency and security features play a pivotal role in building investor confidence. Each transaction's immutability and transparent record of ownership and transactions mitigate the risks of fraud and unauthorized transactions, fostering a secure investment landscape.
Project Making Noise In The RWA Segment
As mentioned above, the RWA crypto tokens already have a market cap of billions of dollars. Several projects are spearheading change within the space with unique propositions and offerings.
Landshare ($LAND) is among the rare projects that offer real estate-backed RWA tokens: Landshare RWA ($LSRWA). $LAND is the native utility and governance token that takes care of transactions and other operations over the platform.
The RWA token represents the unit of the pool of real estate properties 1:1. Landshare makes it possible for you to step into tokenized real estate investments with as low as $1. Landshare RWA tokens are playing a crucial role in changing the real estate investment landscape with unique propositions and offerings.
Landshare is actively tackling the challenge of the lack of secondary trading options for most security tokens with a comprehensive three-pronged approach. The strategy includes on-chain valuations, ensuring transparency with up-to-date property valuations and cash reserves; fixed price liquidity, maintaining token value alignment with the underlying assets through controlled sales; and DEX Trading, aiming to foster a vibrant secondary market for LSRWA tokens by enabling unrestricted trading.
The upcoming listing of LSRWA Tokens on the DS Swap Security Token DEX is a significant milestone in this endeavor for Landshare. The on-chain real estate trading by offering instant settlements, no transaction fees, and the flexibility to trade against LAND or stablecoin pairs will be possible and it's a paradigm shift in making.
The introduction of the DS Swap listing is expected to amplify trading dynamics by providing zero-fee liquidity pools, facilitating arbitrage opportunities, and allowing for higher trading limits. Landshare takes a leap in resolving the liquidity issues with the DS Swap Security Token DEX listing, promising a more fluid and accessible market for real estate tokenization.
Further enriching the ecosystem, Landshare plans to propose an LSRWA-USD liquidity pool, akin to the successful LAND-BNB LP, to incentivize LSRWA holders with rewards for contributing to liquidity. This initiative not only aims to elevate LSRWA's utility but also to broaden the trader base, mitigate price volatility, and ensure a more stable and liquid market environment.
The Path Forward: Innovation and Opportunities
The tokenization of real estate assets paves the way for innovative investment models and financing mechanisms, from crowdfunded investments to yield-generating real estate funds. These developments promise to enrich the investment landscape and provide property owners and developers with novel avenues for funding and growth.
The listing of LSRWA Tokens on the DS Swap Security Token DEX represents a pivotal moment for Landshare, a huge change in on-chain real estate trading. Enabling instant settlements, zero transaction fees, and versatile trading against LAND or stablecoin pairs, this step will bring unprecedented liquidity in the space. It amplifies trading dynamics with zero-fee liquidity pools, arbitrage opportunities, and higher trading limits, marking a significant step towards solving liquidity issues and enhancing the accessibility of real estate tokenization.
RWA tokens' on-chain secondary market trading sets the stage for a more liquid, inclusive, and dynamic real estate market. By leveraging the power of blockchain technology, the real estate sector is poised for a transformation that promises to redefine the essence of property investment, making it more accessible, efficient, and attractive to a global audience of investors.
The future of real estate investment is not just about owning property; it's about being part of a revolutionary movement toward a more democratized financial ecosystem.
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The real estate market is witnessing a transformative shift with the introduction of blockchain technology, particularly through the concept of tokenization. This innovative approach is redefining property ownership, offering new opportunities for investment and liquidity.
If you are an investor in real estate, you might have reaped the benefits of tokenized real estate investments. However, real estate tokenization not only opens a new avenue for real estate investors but also brings forth advantages to property owners.
Tokenization allows property owners to convert real estate assets into digital tokens, thereby simplifying transactions and broadening investor access. Liquidity and fractionalization are key benefits in tokenized real estate but for property owners within the ecosystem could see more than this.
In the following blog, let's explore more compelling use cases of tokenization for property owners including house flipping, partial sales, and tokenizing cash flows, backed by real statistics and figures to illustrate its growing impact.
What Benefits Real Estate Tokenization Bring?
Tokenization is a process of creating a digital identity of a tangible financial asset on blockchain which is unique and anonymous. This method takes the value of an asset on a chain. It brings benefits such as fractional ownership, liquidity, enhanced security and transparency. Currencies, commodities, real estate properties and art pieces are the common tokenized assets.
As an investor, you can enjoy investing in multiple assets through fractional ownership reaping the benefits of varied returns on respective assets. Real estate sector is traditionally one of the most illiquid ones since it takes time to sell off a property which requires time and effort but tokenization solves such pain points.
We have already discussed the pros and cons of tokenized real estate investments in earlier pieces. Along with the investors, tokenization resolves issues for property owners. The tokenized real estate properties can be sold off in units that increase higher chances of sale. Following are more crucial advantages of tokenized real estate for property owners.
House Flipping
Traditionally the practice of purchasing properties, renovating them and then selling them in profit is house flipping. It needs a hefty amount upfront and since the market turns or unexpected costs are also crucial factors, there are risks included in the process. But inclusion of tokenization could mitigate these risks to some extent also resolving issues related to liquidity.
The house flippers could sell fractional shares of the property as tokens in exchange for the required amount. Let’s say a flipper buys a property for $300,000 and needs $50,000 for renovations. Now they could issue 350,000 tokens valued at $1 each to raise the renovation funds. This way they can not only speed up the process but also manage to diversify the risk.
Partial Sales
Tokenization also allows partial sales that enable property owners selling a fraction of their property to different investors. Though the method could be useful for any real estate property, the markets with high-value properties such as the United States can benefit the most. This way the property owners bear no debt and it becomes a great alternative to home equity line of credit (HELOC).
Property owners can sell out their shares of property to a pool of investors after tokenizing it. For instance, a property owner takes 60% ownership and sells the rest 40% of the property. Along with the democratization of real estate investment, this approach also provides liquidity to owners to invest in more ventures or even make improvements in the real estate property.
Tokenizing Cash Flow
One of the innovative ways to secure the funding along with providing regular income to investors is through tokenization of rental properties’ cash flows. You as an owner of a real estate property that generates $10,000 per month through rent could use the method and tokenize this case flow while offering tokens that represent a share in the rental income. This method attracts investors seeking stable returns without the need for large capital investments.
A Deloitte report states that by offering such fractional ownership and investment opportunities, tokenization could grow the liquidity of global real estate assets by over $1.4 trillion.
Benefits of Third-Party Tokenization with Landshare
At Landshare, we've dedicated ourselves to democratizing real estate investment, and our efforts have culminated in the Landshare RWA Token. This innovative product empowers anyone to generate passive income from real-world assets with an investment as low as $1.
The benefits of our tokenization process extend beyond just investors. Property owners—whether individuals, corporate entities, investment clubs, or funds—now have a powerful tool at their disposal. Through tokenization, both investors and property owners can cultivate a relationship that is mutually advantageous.
As we build on our strong base of RWA investors, our next objective is to enable property owners to tokenize their assets through the Landshare platform. This capability will allow them to raise funds and secure loans against their properties, enhancing the value provided to our existing LSRWA investors.
Tokenization offers property owners a range of strategic advantages. It isn't merely about listing properties for sale. Its true value lies in its ability to provide liquidity and allow for the fractional ownership of properties. Alternatively, they can borrow against the future cash flow from their properties, maintaining their stake while obtaining upfront cash.
Landshare has always been taking bold and unique steps for the sake of community and is now looking to include property owners, who remain at the other end of spectrum, along with the investors.
This initiative is set to broaden the array of properties available on our platform, diversify our offerings with new property types including vacation homes and commercial spaces, and expand our reach beyond the U.S. It also introduces new mintable NFTs, enriching our investors' options.
The Broader Impact and Future Outlook
The broader impact of real estate tokenization is significant, offering increased liquidity, reduced transaction costs, and enhanced market efficiency. A study by the World Economic Forum predicts that by 2027, 10% of the global GDP will be stored on blockchain technology, with real estate being a major component of this shift.
This adoption indicates a robust future where tokenization not only makes real estate investment more accessible but also more integrated with global financial markets, allowing for seamless international transactions and diversified portfolios.
Tokenization stands out as a revolutionary tool in real estate, providing property owners and investors with novel ways to manage and profit from their assets. As the technology matures and regulatory frameworks develop, the possibilities for tokenization in real estate will likely expand, further unlocking the potential of properties as both investment vehicles and sources of revenue.
About Landshare
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $1 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
As blockchain technology matures, its potential extends beyond digital currencies into the broader domain of tokenizing real-world assets (RWAs). From real estate to artworks and even intellectual property, the ability to tokenize physical assets has opened up new possibilities for investment, ownership, and exchange.
A Boston Consulting Group report stated that the market size of the on-chain RWA market is expected to hit $16 Trillion by 2030. The massive market size showcases enormous possibilities for growth in the future.
The evolution of technology towards a tokenized economy requires robust cross-chain technologies that facilitate seamless interoperability among diverse blockchain platforms. Here, we will explore what a tokenized economy looks like, why tokenizing real-world assets is transformative, and the crucial role of cross-chain solutions in this burgeoning ecosystem.
Tokenization involves converting the rights to an asset into a digital token on a blockchain. These tokens represent ownership or a claim to the underlying asset, allowing them to be bought, sold, or traded on digital platforms. The process democratizes access to investment opportunities and enhances liquidity, transparency, and efficiency in transactions.
Almost every other tangible financial asset can be tokenized today. Thanks to blockchain technology, commodities, currencies, real estate properties, arts, and many other similar assets can be traded in their tokenized versions. The concept of tokenization gained popularity quickly, and a huge amount of credit goes to the benefits it brings to the table.
Advantages of Tokenized Economy Bringing Financial Empowerment
Increased Liquidity: Tokenization can transform traditionally illiquid assets like real estate or art into divisible and easily tradable tokens. This broadens the market and reduces entry barriers for investors, making the asset more tradable and, hence, comparatively more liquid.For example, platforms like Landshare allow investors to purchase fractions of real estate properties as tokens, which they can sell on secondary markets without the need for lengthy and complex real estate transactions. This method greatly enhances liquidity in a market traditionally dominated by high thresholds for entry and exit.
Enhanced Transparency: Using blockchain ensures that all transactions are recorded on an immutable ledger, reducing the risk of fraud and increasing trust. For instance, the buying and selling of real estate properties have traditionally been opaque processes with layers of brokers, inspectors, and legal checks.However, with tokenized real estate transactions, every transaction from initial purchase to subsequent sales is recorded transparently on the blockchain.
Streamlined Processes With Automation: Blockchain technology can automate many of the processes involved in asset management through smart contracts, reducing the need for intermediaries and lowering transaction costs. The process is on-chain and requires no paperwork, which resolves a huge issue inherent to the trade of tangible assets like real estate.A notable example here is Maecenas, which allows users to buy and sell shares in fine art using blockchain. This system eliminates the need for auction houses and brokers, thereby reducing fees and streamlining the entire investment process in art, a market traditionally inaccessible to average investors due to high costs and complex buying processes.
With the evolution of blockchain technology, the space is filled with many blockchain networks with distinct properties. It was important that these chains connected to each other to create a unified ecosystem, and that’s where Cross-chain systems came to the rescue.
Cross-chain technology enables blockchain networks to communicate and share information, assets, and value. This interoperability allows users to transact across various blockchains without the need to exchange tokens through a central exchange, enhancing the efficiency and scalability of blockchain applications by connecting otherwise isolated networks.
For instance, Polygon (MATIC) offers extensive cross-chain capabilities through its Polygon Bridge, enabling seamless asset transfers between the Ethereum (ETH) blockchain and Polygon sidechains. This feature supports the movement of ERC tokens, NFTs, and other digital assets, facilitating interoperability and scalability. By using Polygon's cross-chain bridges, users benefit from faster transaction speeds and lower fees compared to Ethereum's mainnet, while maintaining robust security.
Arbitrum (ARB) is another example where the Layer 2 scaling solution for Ethereum enhances its cross-chain capabilities primarily through compatibility with Ethereum's network. It allows users to execute Ethereum transactions more swiftly and at a lower cost, without sacrificing security. While it operates on top of Ethereum, Arbitrum doesn't have a native cross-chain bridge like Polygon but leverages Ethereum's security and connectivity.
Cross chain systems bring these benefits to the RWA sector further enhancing its reach. Tokenized assets could move across blockchain networks rather than limited to the native blockchain only. More the reach to multiple blockchains the more users it can cater.
Benefits of Cross-Chain Solutions Within RWA Sector
Broader Market Access: RWA investors benefit from cross-chain systems by gaining access to a wider range of tokenized assets across multiple blockchains, optimizing their investment strategies. This not only broadens their market reach but also enhances liquidity in the RWA sector by including a diverse pool of investors.
Reduced Risk of Fragmentation: Cross-chain technology ensures interoperability across different blockchains, preventing market fragmentation and fostering a more unified ecosystem. Connectivity makes RWAs more accessible and prevents projects within the RWA sector from being isolated on single platforms, promoting broader adoption and integration.
Enhanced Scalability: Cross-chain solutions address scalability challenges that single blockchains face by distributing the load among multiple networks. The utilization of various networks’ strengths leads to more efficient handling of transactions and interactions, significantly enhancing the performance and scalability of RWA applications.
A significant advancement in cross-chain technology is the development of blockchain bridges, such as Polkadot and Cosmos, which aim to connect disparate blockchains to enable asset and data transfer. When the tech is integrated with the RWA sector, it brings significant results.
Cross-chain technology significantly enhances the Real World Asset (RWA) sector by improving liquidity and market access. By enabling seamless transactions across various blockchains, it allows investors to diversify their portfolios with a broader range of tokenized assets, such as real estate or commodities.
The volume of tokenized real estate assets like to increase largely due to improved interoperability provided by cross-chain platforms. This technology also reduces market fragmentation, creating a more cohesive and robust investment landscape, which further attracts a larger pool of global investors, driving the sector's growth and stability.
The Need for Interoperability in the RWA Sector
Cross-chain technology is crucial in the context of RWA because it enables interoperability between different blockchain platforms. This means that assets can move seamlessly across various blockchain networks, enhancing the functionality and reach of tokenized assets. Each blockchain would operate in isolation without cross-chain capabilities, limiting the potential for a truly global and integrated tokenized economy.
As more assets get tokenized on various blockchain platforms, interoperability becomes crucial. Cross-chain technology allows different blockchains to communicate and share information, enabling tokens and assets to move freely across diverse networks.
The Future of Tokenized Economies and Multi Chain Integration
Integrating cross-chain technologies with tokenization efforts will likely redefine asset management and investment across multiple sectors. As regulatory frameworks evolve to accommodate these innovations, we can anticipate a more inclusive and efficient global market landscape.
As assets from real estate to artwork are tokenized, they become more accessible and liquid. Tokenization could unlock trillions in illiquid assets, significantly expanding global investment opportunities. According to a forecast by the World Economic Forum, the tokenized assets market could exceed $24 trillion by 2027.
Integration of multichain systems will enable these tokens to operate across different blockchain platforms, enhancing the functionality and reach of each tokenized asset. This interoperability is critical to building a seamless, efficient global marketplace, bridging diverse economic sectors and geographies, and setting the stage for a more inclusive financial ecosystem.
The potential of a tokenized economy facilitated by cross-chain technology represents a significant shift in how we perceive asset ownership and investment. As this ecosystem continues to evolve, it promises to bring more inclusivity, efficiency, and transparency to the global economy. The journey towards a fully integrated tokenized world is complex and fraught with challenges, but the benefits could redefine the economic landscape for future generations.
About Landshare
Landshare is a platform for tokenizing property in the United States. It allows investors to buy shares in residential properties through blockchain tokens. This method has simplified the investment process and made real estate investment accessible to a broader audience. Landshare merges blockchain technology with the real estate sector by offering tokenized real estate assets on its platform, enabling investments as low as $50 and democratizing access to property investment.
The platform utilizes Real World Asset (LSRWA) tokens to offer investors shared ownership in actual property assets, which is a significant innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional efficiency with the successful sale of four tokenized properties on the Binance Smart Chain (BSC), showcasing its market readiness. By addressing inefficiencies and liquidity challenges in traditional real estate, Landshare is emerging as a pivotal player, providing attractive opportunities for growth and passive income.
The advent of blockchain technology heralds a seismic shift in the real estate sector, promising unparalleled liquidity and accessibility through tokenizing real-world assets (RWAs). Traditionally we have seen the real estate sector as an illiquid asset class with high entry barriers but now it is reimagined by integrating on-chain secondary market trading of RWA tokens.
According to CoinMarketCap, the market cap of real-world asset (RWA) tokens stands above $53.7 Billion. This substantial market cap shows us that the RWA sector in the crypto market is proliferating. The high pace of growth ensures that it will soon overlay a notable portion of the traditional real estate market.
We can see how the RWA narrative has taken crypto space by the storm, and it has made a massive leap in the financial landscape. It is making tangible financial assets such as real estate investments more fluid, transparent, and accessible to a broader spectrum of investors. The amalgamation of RWA tokens with secondary market trading brings unprecedented advantages for you in the highly lucrative real estate investment sector.
We can understand secondary market trading as trading of assets among buyers and sellers rather than with the companies or projects. A budding project in the crypto space launches a token through either an ICO, IEO, or IDO, which primarily trades native tokens in exchange of raising funds from investors. After the launch, when these tokens are up for trade among traders, it becomes a secondary market, and the trading becomes secondary market trading.
NYSE and NASDAQ are, for instance, secondary market trading platforms, as they offer you to trade or invest in stocks. On the same note, trading on both centralized and decentralized crypto exchanges falls within secondary market trading. We can trade Bitcoin on crypto exchanges such as Coinbase or buy or sell Ethereum on decentralized exchanges like Uniswap.
How Does RWA Token Secondary Market Trading Affect the Real Estate Sector?
Real-world assets (RWAs) refer to objects possessing tangible or intangible value, including but not limited to gold, fine art, and real estate. In 2024, the scope of these assets linked to the real world is set to broaden beyond the confines of physical space. The advancement of blockchain technology makes the expansion possessive, providing a unique on-chain identity to traditional assets. This innovation creates a novel concept known as the real-world asset token.
The global real estate market is over $630 Trillion today and is continually growing. It is expected to hit $729 Trillion by 2028. This also makes real estate investments one of the most lucrative investment vehicles due to huge returns, but they do come with their own shares of hassle.
The real estate market is illiquid, and even a single transaction of buying or selling a property could take weeks or even months. In addition, it takes time to complete the extensive paperwork required for a transaction, making the whole process inefficient.
With the introduction of real estate-backed RWA tokens, real estate property transactions can now be carried out faster, more transparently, and more efficiently. There's more to the phenomenon than just that; let's delve into the benefits of trading RWA tokens in secondary markets.
- Fractional Ownership: A Gateway to Enhanced Liquidity: The concept of fractional ownership, enabled by RWA tokens, demystifies real estate investment, allowing for the division of property into purchasable tokens. This approach significantly lowers investment thresholds, inviting participation from a wider demographic. The fractionalization of assets thus catalyzes market liquidity, with smaller investment portions facilitating quicker and more frequent transactions.
- Streamlining Transactions: The Efficiency Paradigm: Blockchain technology accelerates the transaction process, cutting through the red tape that often encumbers real estate dealings. The traditional weeks-long wait for deal closure is condensed into transactions that can settle in minutes or hours, thanks to smart contracts and on-chain verifications. This efficiency not only boosts market liquidity but also enhances the appeal of real estate as an investment vehicle, promising quicker returns on investment.
- Global Market Access: Expanding the Investor Pool: Tokenization propels real estate into the global market, offering investment opportunities beyond geographical confines. This global accessibility attracts diverse investors, further invigorating market liquidity. The borderless nature of blockchain facilitates an influx of capital from international investors, diversifying the investment base and stabilizing the market against local economic fluctuations.
- Democratizing Real Estate Investment: The democratization of real estate investment through tokenization is perhaps its most revolutionary aspect. By breaking down financial barriers to entry, RWA tokens open the real estate market to small and medium investors, previously sidelined by the substantial capital requirements of property investment. This inclusive approach broadens the investor spectrum and instills a more dynamic and participatory market environment.
- Cost Efficiency: Reducing the Financial Burden: Implementing smart contracts and eliminating intermediary fees through blockchain transactions lead to significant cost reductions. These savings extend to buyers and sellers, making investments more attractive and accessible. Furthermore, the reduced costs associated with transactions and management of real estate investments ensure a more efficient allocation of resources, optimizing returns for investors.
- Security and Transparency: Building Trust: Blockchain's inherent transparency and security features play a pivotal role in building investor confidence. Each transaction's immutability and transparent record of ownership and transactions mitigate the risks of fraud and unauthorized transactions, fostering a secure investment landscape.
Project Making Noise In The RWA Segment
As mentioned above, the RWA crypto tokens already have a market cap of billions of dollars. Several projects are spearheading change within the space with unique propositions and offerings.
Landshare ($LAND) is among the rare projects that offer real estate-backed RWA tokens: Landshare RWA ($LSRWA). $LAND is the native utility and governance token that takes care of transactions and other operations over the platform.
The RWA token represents the unit of the pool of real estate properties 1:1. Landshare makes it possible for you to step into tokenized real estate investments with as low as $1. Landshare RWA tokens are playing a crucial role in changing the real estate investment landscape with unique propositions and offerings.
Landshare is actively tackling the challenge of the lack of secondary trading options for most security tokens with a comprehensive three-pronged approach. The strategy includes on-chain valuations, ensuring transparency with up-to-date property valuations and cash reserves; fixed price liquidity, maintaining token value alignment with the underlying assets through controlled sales; and DEX Trading, aiming to foster a vibrant secondary market for LSRWA tokens by enabling unrestricted trading.
The upcoming listing of LSRWA Tokens on the DS Swap Security Token DEX is a significant milestone in this endeavor for Landshare. The on-chain real estate trading by offering instant settlements, no transaction fees, and the flexibility to trade against LAND or stablecoin pairs will be possible and it's a paradigm shift in making.
The introduction of the DS Swap listing is expected to amplify trading dynamics by providing zero-fee liquidity pools, facilitating arbitrage opportunities, and allowing for higher trading limits. Landshare takes a leap in resolving the liquidity issues with the DS Swap Security Token DEX listing, promising a more fluid and accessible market for real estate tokenization.
Further enriching the ecosystem, Landshare plans to propose an LSRWA-USD liquidity pool, akin to the successful LAND-BNB LP, to incentivize LSRWA holders with rewards for contributing to liquidity. This initiative not only aims to elevate LSRWA's utility but also to broaden the trader base, mitigate price volatility, and ensure a more stable and liquid market environment.
The Path Forward: Innovation and Opportunities
The tokenization of real estate assets paves the way for innovative investment models and financing mechanisms, from crowdfunded investments to yield-generating real estate funds. These developments promise to enrich the investment landscape and provide property owners and developers with novel avenues for funding and growth.
The listing of LSRWA Tokens on the DS Swap Security Token DEX represents a pivotal moment for Landshare, a huge change in on-chain real estate trading. Enabling instant settlements, zero transaction fees, and versatile trading against LAND or stablecoin pairs, this step will bring unprecedented liquidity in the space. It amplifies trading dynamics with zero-fee liquidity pools, arbitrage opportunities, and higher trading limits, marking a significant step towards solving liquidity issues and enhancing the accessibility of real estate tokenization.
RWA tokens' on-chain secondary market trading sets the stage for a more liquid, inclusive, and dynamic real estate market. By leveraging the power of blockchain technology, the real estate sector is poised for a transformation that promises to redefine the essence of property investment, making it more accessible, efficient, and attractive to a global audience of investors.
The future of real estate investment is not just about owning property; it's about being part of a revolutionary movement toward a more democratized financial ecosystem.
This site is operated by Landshare LLC, which is not a registered broker-dealer or investment advisor.
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