In yesterday’s world, you’d need millions in your bank account and weeks of paperwork to invest in real estate. Luckily, those days are gone.

Today, more and more properties are tokenized – that is, their ownership is converted into tokens and put onto the blockchain. Those who buy these tokens become property co-owners in the real world. And there can be dozens and even hundreds of co-owners – depending on how many people have purchased the tokens.

Here’s what this means: the high-yield residential real estate market finally opens to the public. You can invest only $50 and enjoy stable passive income from an asset that has never been accessible before.

Nothing Short of a Revolution

Binaryx hasn’t invented real estate tokenization – the trend has been evolving for the last couple of years. The reason for this is simple: tokenization solves a few critical problems at the core of the traditional real estate market.

Tokenized real estate is more liquid

Only 1% of the world's real estate is liquid – that is, traded on stock exchanges. Another 99% is stuck – it takes up to a year to sell an average house. Meanwhile, the global real estate market is immense: it’s valued at $330 trillion, where 79% is the residential property sector. The latter has been growing for the last 10 years.

All these numbers mean one thing: the RE market is huge but inefficient. In tokenized real estate marketplaces, property owners can quickly sell their houses to thousands of buyers, and investors can start co-owning a property for just $50. Sounds win-win, right?

What’s more, these real estate tokens can then be easily exchanged, re-sold, or even used to take a loan in a DeFi protocol. Web3 RE investors can diversify their portfolios while buying many different tokens. Liquid enough!

It’s more transparent

If you want to buy a property in a traditional way, you’d have to spend weeks delving into all nuances and researching disparate sources of information.

In tokenization, there’s an established transparent legal flow. It varies from country to country, and we will explain it in detail in our future posts. But on the user experience side, it’s extremely easy: all the docs are available in one place, and property tokens can be bought in a few clicks.

Real Estate Tokens = Ownership in the Real World

It’s easy to mint a bored ape picture token and proclaim this NFT’s holder its owner. But how’s that possible with such a thing as real estate?

Tokenization has become possible thanks to the new laws developed in the USA, Indonesia, and the UAE. In America, there’s the Wyoming LLC Act – it allows the creation of a legal entity that is owned and governed by a DAO, decentralized autonomous organization, via tokens.

Here’s how Binaryx works:

• When we tokenize a home, we create a new DAO LLC – and the property rights are transferred to this DAO.

• This DAO’s tokens are sold on Binaryx Marketplace, and investors who buy them become co-owners of the property. Once the home is sold fully, DAO members share rent payments and make collective decisions regarding the property.

Our team has done extensive research across 2022 to make sure we’re fully compliant with the law. We’ll make another post with more legal details soon.

Industry Leaders on Tokenization

We said we haven’t invented real estate tokenization – and it’s not only us calling it a revolution! Here are just a few examples:

• Deloitte, a British consulting giant, believes that tokenization will make the financial industry more accessible, unlocking trillions of euros in currently liquid assets.

  “The act of tokenizing assets threatens to disrupt many industries, in particular the financial industry, and those who are not prepared risk being left behind.” — Deloitte

• McKinsey and the World Economic Forum claim that 10% of the world’s GDP will be stored on the blockchain by 2027.

• Vitalik Buterin believes that Real World Asset (RWA)-based stablecoins and real estate tokens offer scalability and practicality “to satisfy the needs of a large number of real-world crypto users.”

• In a Binance Research study published on March 2, the potential impact of tokenized Real World Assets (RWAs) on DeFi is thought to be “transformative”.

Sounds Promising So Far? There Are Hurdles, Too

Lack of regulation. You can try to tokenize a home in India or Argentina, but without proper laws, there’s just too much risk that the deal will not be accepted by the authorities. In America, Indonesia, and the UAE such laws are present, and they are being developed in the EU – Binaryx is going to list properties from all these locations.

Lack of expertise. To tokenize a home, you need to find a legal expert who understands both real estate and blockchain – that’s not an easy task to do.

Digital divide. The digital divide is a gap between those who have access to the internet and technology and those who do not. This is especially relevant for Africa and Central America – poor digitalization is a constraint for widespread tokenization there.

Nevertheless, we believe all these obstacles can be overcome. And maybe in 10 years, we will find ourselves in a different world where you can buy whatever you want on the blockchain – much more than just real estate.