Report: Real estate is the leading securitized blockchain asset

There are 89% of all security tokens trade in the real estate sector, suggesting NFTs are prime for further adoption by the blockchain industry.

Asset classes like real estate are ripe for integration with blockchain. Among the many categories of security tokens, real estate dominates. 

Blockchain is revolutionizing the real estate industry

The popularity of nonfungible tokens (NFT) has skyrocketed from the past to now, reaching a new high in 2021. Many of the negative press about NFTs focuses on the fact that they can only handle pixelated pictures of JPEGs but have no “real-life” applications. People familiar with blockchains and cryptos know that NFTs utilize far more than pixelated apes or Shiba Inu memes.

The report provides a general overview of how the primary tokenized real estate market is performing right now. 14 major active projects in the space, and how these real estate tokens are trading on the secondary market.

Blockchain technology’s perfect application

Many industries use security tokens, including fine art, wine, and insurance, but none have grown as rapidly as the real estates sector, which makes up 89% of all traded security tokens. A closer look at those 89% reveals that 87% are residential real estate, while 2% are commercial transactions. The global real estate market size in 2021 was approximately $3.38 trillion. With the rise of blockchain applications in real estate, it is no surprise that the crypto revolution will spread into the real estate industry.

The transfer of ownership and title is a natural fit for blockchain applications. Since the systems involve in the transfer of ownership, build directly into the exchange process itself. Verifiability and trustlessness make the technology ideal for eliminating many different barriers to transactions that plague the traditional real estate market.

For instance, title searchers and their insurance. To ensure the seller can effectively transfer property rights to the buyer, mortgage lenders and buyers conduct a title search on the property. Conducting a blockchain search becomes easier with a tokenized property asset. The possibilities are endless. Emerging and Nascent, but growing

A token-based on the ERC-20 standard was minted on the Ethereum blockchain in 2019. Although the real estate industry may seem slow to adopt, it must be noted that it is highly regulated. With this factor and the growing decentralized blockchain industry, you’re likely to see slow growth – at least in the beginning.

Real Estate Trade

According to the report, actively traded real estate tokens increased by 107% from 2017 to 2021. The active projects cover various areas, including commercial hotels, private estates, Section 8 and affordable housing, financial securities through a blockchain IRA, and insurance. According to the chart below, residential activity dominates compared to commercial activity. 

The tokenization process increases liquidity in the real estates market, a problem that has historically plagued the industry. The blockchain also offers investors the opportunity to target yield generation with different property fractionalizations, which eliminates entry barriers and complicated processes. 

The blockchain is revolutionizing Real Estate

No industry is immune to change, including real estates. This report provides insights for anyone involved in real estates to help them maintain their competitive advantage in this market.

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