Tokenization
At the heart of Fractise lies the process of tokenization, a revolutionary method of converting real-world assets into blockchain-based digital tokens. These tokens represent fractional ownership of the underlying asset, enabling seamless investment, transfer, and trading.
What is Tokenization
Tokenization is the process of creating a digital representation of a tangible or intangible asset on a blockchain. These digital tokens encapsulate the value and ownership rights of the asset, which can then be divided and distributed among multiple investors.
Example:
A $1,000,000 property is tokenized into 1,000,000 tokens.
Each token represents 0.0001% ownership of the property.
Investors can buy as many tokens as they wish, starting from as little as $1.
Fractional Ownership
One of the greatest advantages that fractional ownership brings to the table is liquidity. Since high-value homes and commercial properties face difficulty being sold to a single entity, real estate assets have remained largely an illiquid asset class.
Fractional ownership opens the floodgates for participation from small-ticket investors. This brings much need liquidity to the asset class and enables retail investors to build a diversified real estate investment portfolio
Advantages of Tokenization
Fractional Ownership:
Tokenization allows assets to be divided into fractions, making high-value assets accessible to a broader audience.
Liquidity:
Fractional tokens can be traded on secondary markets, providing liquidity to traditionally illiquid assets like real estate or collectibles.
Transparency:
Every transaction is recorded on an immutable blockchain, ensuring transparency and security for all stakeholders.
Accessibility:
By removing high entry barriers, tokenization democratizes asset ownership, allowing anyone with an internet connection to participate.
Cost Efficiency:
Eliminates intermediaries such as brokers or agents, reducing transaction costs and increasing efficiency.
Global Reach:
Tokens can be purchased or sold across borders, enabling international participation in asset ownership.
How Tokenization Works on Fractise
Asset Identification:
Fractise collaborates with asset owners to identify suitable assets for tokenization.
Asset Valuation and Legal Structuring:
Assets are appraised, and legal structures are established to ensure compliance with regulatory frameworks.
Token Creation:
Smart contracts on the blockchain generate tokens that represent fractional ownership of the asset.
Listing on Fractise Platform:
The fractionalized tokens are listed on the Fractise marketplace, where users can invest.
Ownership and Returns:
Investors who own tokens are entitled to their share of asset returns, such as rental income or resale profits.
Applications of Tokenization on Fractise
Real Estate:
Residential and commercial properties can be tokenized, enabling small investors to own a share of prime locations.
Luxury Assets:
High-value items such as watches, cars, and art pieces are fractionalized, opening up opportunities for shared ownership.
Gaming and Metaverse:
In-game assets and virtual lands are tokenized, allowing players and enthusiasts to own a stake in digital economies.
Infrastructure Projects:
Large-scale infrastructure investments, such as renewable energy projects, are tokenized to attract diverse investors.
Collectibles and Commodities:
Rare items like trading cards, memorabilia, and precious metals are made accessible through fractional ownership.
Security and Compliance in Tokenization
Fractise prioritizes the security of tokenized assets by leveraging blockchain's inherent properties:
Immutable Records:
Ownership details and transaction history are permanently recorded on the blockchain.
Smart Contracts:
Automated and self-executing contracts ensure the fair and accurate distribution of ownership and returns.
Regulatory Compliance:
Fractise works with legal experts to ensure tokenized assets adhere to relevant financial regulations in each jurisdiction.
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