RealEstate.Exchange

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The Global Tokenization Market

Assets on the blockchain is growing, fast.

World Economic Forum estimates that 10% of global GDP is recorded on the blockchain by 2027 

Finyear says the tokenization market CAGR will be 59% from 2019-2030 

Frankfurt School BC estimates the European tokenization market $1.5 trillion in 2024

JLL projects 80% of all investments into real estate in just 60 cities around the globe, meaning that 1000s of areas are underserved. 

MIT claims that 93% of real estate is beyond the reach of retail investors. 

Better Homes and Gardens survey shows 89% of US investors interested in real estate but only 3% has invested.

 

The Tokenization Process

1
 
 
The Deal

Determine the specific property or properties to tokenize and consider jurisdiction, types of shareholders, and the relevant regulations.
2

 

Appropriate Technology

Determine the legal structure. Various options are available and the owner can choose to tokenize the equity of a Special Purpose Vehicle (SPV), a debenture, or another form of participation right such as revenue or profit.

3

 

Legal Structure

Choosing Blockchain protocol, Token configuration, KYC/AML questionnaire. Setup token custody solution with a custody provider and choose the right blockchain network for token creation.

4

 

Token Creation & Distribution

Creating a distribution plan and payment methods for potential investors to purchase the token. On your dashboard you can see the amount of funds that you have raised in real-time.

Benefits

Asset Owner

  • Your own real estate crowdfunding platform
  • Digitizes and automates many processes related to financing and management of investors
  • Advanced share cap table module
  • Allows investing in most currencies (fiat & crypto)
  • Uses audited smart contracts for high safety and security
  • Offers instant liquidity through our OTC marketplace
  • Shareholder meetings, votes etc.
  • Electronic signatures
  • Tokens are compatible with exchanges, custodians, etc.

Investor

  • Digital shares
  • Cost effective trading
  • Transferable shares
  • 24/7 Markets
  • Rapid settlement

Platform Operator

  • Strong recurring revenue source from assets
  • Become a tokenization provider in your region
  • Ability to serve many clients
  • Fast and flexible customization of platform

FAQ

Price

How can the price of real estate tokens increase?

The price of real estate tokens should remain stable, as the underlying real estate asset is appraised annually. This should ensure that the traded price of any real estate token will not fluctuate much of its underlying value, as any price below or above the underlying value represents an arbitrage opportunity.

How will BRICK help to avoid price manipulation and volatility of real estate tokens?

Real estate tokens are different from other native blockchain tokens like BTC and ETH in that there is an underlying asset with a book value. Because tokens are traded in the open market, they can be manipulated. To safeguard price manipulation and sell-pressure below the book value of a real estate token, we provide three mechanisms that creates a price floor at book value:

  • BRICK reserve: Whenever a real estate token is traded below the book value of the underlying asset, the BRICK reserve will start buying up these real estate tokens. The real estate tokens are only resold to the market when the price has increased above the book value.

     

  • Real estate developer reserve: Similar to the BRICK reserve, the real estate developer that initially issued the real estate tokens has allocated a certain amount of BRICK or other tokens raised in a reserve to buy up real estate tokens if the price drops below book value.

     

  • Real estate investment firms: We are partnering up with real estate investment firms that are actively trading real estate tokens. These firms look for undervalued properties and hence tokens, and will start buying up real estate tokens if the price drops below book value.

     

Besides the above mentioned, a structural defence against large price impacts is to set up BRICK and real estate tokens to be highly liquid. By creating BRICK-RE pools as smart pools, we can set certain trading restrictions that we can activate if we see actors in the market trying to manipulate the price of any real estate token issued.

Liquidity

How will the BRICK token ensure real estate tokens don’t become illiquid?

The problem faced by BRICK and the real estate tokens we are planning to introduce is that they are completely illiquid prior to launching. 

So to ensure liquidity, we need a way to tap into existing liquidity pools and connect to these. With the token sale of BRICK, a large proportion of the funds raised have been allocated to provide liquidity in liquidity pools on AMMs such as Balancer. We do this in order to ensure high liquidity in the market from day one when a new real estate token is issued. Since there are many real estate tokens – from many different real estate properties – there is a high risk of a particular real estate token becoming illiquid in the market, unless there is a mechanism that works to prevent this. 

That mechanism is our BRICK token, as every real estate token is routed through BRICK, which is going to be a highly liquid asset in a large liquidity pool. This means that an investor will be able to swap almost any crypto asset into a real estate token with minimal to no price impact.

How will BRICK help to avoid impermanent loss when adding liquidity to a pool?

When it comes to the BRICK-BAL pool, we intend to compensate liquidity providers with rewards that should surpass any potential impermanent loss. See token distribution for more information.

When it comes to the BRICK-RE pools, there are multiple ways we either circumvent or compensate for impermanent loss:

  • Imbalanced pools, which minimizes the risk of impermanent loss
  • Incentives in the form of high APYs when adding liquidity
  • Extra incentives in the form of BRICK tokens provided as rewards for early liquidity providers 
     

Token Sale

What happens if there are some tokens not sold during a token sale?
  • Any tokens not sold in seed, private og public sale will be burned

Announcements

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We are growing our ecosystem to help bring real estate on the blockchain.
If you want to take part in the revolution reach out to us today.