There’s no denying that real estate is a good investment. However, selling real estate is an expensive and intricate process, making it illiquid. Most industries have taken their processes online, moving documents and organizing data using online tools. The real estate industry, however, is still reliant on outdated methods and is long overdue for an upgrade.
Valuit is a company that is working to revolutionize the real estate industry by providing a blockchain to make the buying and selling of real estate easier. Real estate tokenization increases liquidity, transparency, and security. Valuit explains the process.
Real-world asset tokenization, or real estate asset tokenization, involves dividing a property into small tokens. Each token has a similar value and similar rights over that property, meaning smaller investors can participate.
Valuit’s asset tokenization process involves the issuance of tokens through dApps, which can take the form of hybrid coins in the form of blockchain-based cryptocurrencies that are pegged or linked to specific physical assets.
Blockchain and Transparency
Valuit will work with the investee or the asset owner who is willing to share the ownership through blockchain technology. The owner will tokenize the asset through dApps that will run on Valuit’s blockchain platform. The blockchain records transactions that involve cryptocurrencies and virtual tokens.
We will work with them to have comprehensive due diligence using third-party valuers to ensure that the asset ownership and its valuation are appropriate. As part of the review of physical assets, we will work with the owner to ensure that the tokenization process provides the investors with residual interest in the ownership of the property or the underlying assets.
The Legality of Tokenization
The asset tokenization process also includes compliance with the applicable laws and regulations where the physical assets are located. We will work with our legal team to identify the asset-specific regulations, which will allow us to ensure that we can comply with the local regulations through our asset tokenization platform. This will open up another value addition for the investor as they will have ownership in authentic assets, and the risk of fraud will be eliminated.
Our model includes identifying new assets and providing an opportunity to owners to easily approach the decentralized financial market to raise funding with real-world assets as security to raise the required funding and share the residual interest of the assets with the token owners.
Smart Contracts and Increasing the Investment Pool
The token owners get proportionate interest in the cash flows generated from the assets, which will be transferred to the token owner periodically through dApps with smart contracts, which will become the foundation of these tokenized assets.
One of the primary advantages of our platform is that we do not have any requirement with respect to minimum capital contribution by the investors. They can start investing in the asset tokens as per their minimum capital availability. This increases the investment pool.
If we evaluate this situation with large investment companies or asset management companies, we realize that they generally only accept investment from large businesses or institutional investors, and retail investors are often not provided with the option of investing in real estate assets or receivable factoring.
Our platform removes all such restrictions with respect to capital availability and provides the opportunity where investors can invest as per their capital strength.