Asset Tokenization on Blockchain: Real Estate with Realio
Real estate is quite simply the largest asset class in the world. HSBC released a report back in July 2017. In it, they calculated that the global real estate market was worth $228 trillion. To give you some context, the value of all the gold ever mined has been estimated to be around $7.5 trillion. Despite being the most affluent space in the world, the industry still runs like a rudimentary “pen and paper” business. However, it looks like some of the industry’s biggest pain points can be organically solved with blockchain integration.
Problems with traditional real estate
- Barriers to entry: The entry barriers for real estate investments are so high that they have somehow become a “rich man’s toy.” Most of the people living in the middle class can’t even dream of owning a house, let alone other properties. Examples of these barriers are – citizenship, international bank accounts, credit score, financing, cash requirements, accreditation, etc.
- No transparency: Real estate is notorious for being an opaque space. Many people have used real estate to launder their dirty money or escape paying taxes.
- Intermediaries: Real estate is riddled with different intermediaries who charge their own fees. Paying all the exchange fees, transfer fees, broker fees, attorney fees, taxes, investment fees, etc. can completely bloat your budget.
- Tamperable papers: Bribing officials to change the terms stated in the property agreement is a prevalent practice.
- No liquidity: Finally, we come to the biggest problem with real estate; it is extremely illiquid. How many times have you heard or seen people struggling to sell their houses? It is nearly impossible to convert your real estate to cash instantaneously.
The blockchain solution
The blockchain has three unique properties that solve these issues pretty organically:
- Decentralization: A blockchain network has no centralized governing body. This immediately removes any dependency and makes the system trustless.
- Immutable: The blockchain uses cryptographic hash functions to ensure none of the data inside it can be tampered with.
- Transparency: All the nodes in a blockchain network can see all the data that’s stored inside it.
Blockchain use cases: Tokenization
One of the core use cases of blockchain technology is tokenization. A token can be thought of as a digital representation of a real-world asset like real estate. This can exponentially increase the liquidity of traditionally illiquid assets. By tokenizing real estate and selling them in an exchange, it will be possible for users to own a fraction of a property, lowering the barriers to entry to a considerable extent. As per the World Economic Forum, over $10 trillion of the world’s assets will be stored as tokens in the next ten years.
Advantages of asset tokenization:
- Removing mediators: Tokenization allows you to leverage the underlying blockchain and connect the sender to the receiver. The underlying transparency and immutability ensure that the blockchain acts as a single source of truth. This removes the need for trusted third-parties.
- Divisibility: As already touched upon before, tokenization allows you to split any asset into smaller fragments. As such, tokenization can help you bring in a large amount of liquidity into any space.
- Track asset history: Blockchain gives you unprecedented transparency. You can trace each and every token right to its very source. This allows you to check its ownership and usage history.
- Safety: The blockchain is immutable, which makes it naturally more secure and honest than any traditional database or payment channel.
- Automation: Blockchain platforms can use self-executing agreements called “smart contracts,” to automate workflows and procedures. This enables you to execute the transfer of value without being overseen by anyone.
Realio: Disrupting Real Estate with Tokenization
Realio is a digital issuance, investment, and peer-to-peer trading platform that enables you to tokenize various assets like real estate investment trust (REIT). Realio also helps users to manage these token throughout their life cycles.
Let’s run through some features of the Realio platform:
- Designed to simplify real estate investments and removes barriers to entry.
- Beginner-friendly and intuitive user interface
- Brings in all the advantages of a decentralized, blockchain-based platform
- Offers compliance with regulatory expectations of all major global jurisdictions
- Hosts a decentralized exchange that will enable you to trade assets. This allows you to mitigate the risks of centralized exchanges.
- Realio’s layer-2 solution – called the “Realio Issuance Network” – will help in interconnecting decentralized ecosystems and increase overall interoperability.
- Realio removes intermediaries which removes transaction fees, waiting times, and any security concerns.
- RealioX is a Realio-based peer-to-peer marketplace. Users can link their wallets to realioX for DEX trading.
RIO, rUSD, and RST – The triple-token ecosystem
Realio utilizes a dual-token system with RIO and realioUSD (rUSD).
- RIO: RIO is Realio’s pure utility token. RIO can be used for paying fees for creating and issuing tokens for projects, listing them on realioX, trading fee payments/discounts, etc. There is no ICO (initial coin offering) or founder pre-mine associated with RIO. Its distribution has been designed to be entirely fair and equal. After the initial airdrop, the existing circulating supply of 7.07 million RIO was distributed to the 707 unique accounts equally (10,000 RIO each).
- rUSD: This is a stablecoin back 1:1 to the US dollar that’s held in reserve by Realio’s custodial partner Prime Trust. rUSD will receive regular audits that will confirm if the reserve accurately matches the circulating supply or not. Users can use rUSD to trade with USD pairs on RealioX or any other SDEX-enabled wallet and enable 24/7 instant cross border transactions.
- RST: A first-of-its-kind hybrid security/utility token that offers ownership and profit share rights over the network. It’s based on the Algorand Standard Asset (ASA) design and has been designed for interoperability with other supported blockchains. RST was offered via a token sale on the Algorand platform.
The Realio Issuance Network – For layer 2 functionalities
The Realio Issuance Network has the following features and benefits:
- It’s a layer 2 network that removes malicious users from participating in overall network validation and voting.
- Acts as a compliance server and sidechain.
- Ensures that the Realio platform enjoys both regulation and decentralization, simultaneously.
- Manages sensitive information such as confidential contracts and other related agreements
With Realio already collaborating with Algorand to host its token sale on the latter’s platform. The real estate space has been stagnating for decades. However, blockchain projects like Realio can be the shot in the arm that real estate needs. Imagine the possibilities of unlocking a $223 trillion market to everyone instead of a select few! It could be truly staggering.
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