A property token is a digital asset that represents ownership or rights associated with a physical real estate property, created and managed on a blockchain. It enables the tokenisation of real estate, allowing properties to be divided into smaller, tradable units (tokens). This facilitates fractional ownership, making real estate investment more accessible and liquid. Key [...]
A property token is a digital asset that represents ownership or rights associated with a physical real estate property, created and managed on a blockchain. It enables the tokenisation of real estate, allowing properties to be divided into smaller, tradable units (tokens). This facilitates fractional ownership, making real estate investment more accessible and liquid.
Key Features of Property Tokens:
- Fractional Ownership: Investors can own a fraction of a property by purchasing tokens, lowering the barrier to entry for real estate investment.
- Blockchain-Based: Tokens are secured and recorded on a blockchain, ensuring transparency and reducing fraud risks.
- Smart Contracts: Property tokens often use smart contracts to automate transactions, rental income distribution, or voting rights.
- Liquidity: Unlike traditional real estate, property tokens can be traded on secondary markets, providing more flexibility to investors.
- Global Access: Tokens can be purchased by investors worldwide, expanding the pool of potential buyers.
Types of Property Tokens:
- Equity Tokens: Represent ownership in the property, similar to shares in a company.
- Debt Tokens: Represent a claim on rental income or other revenue streams generated by the property.
- Utility Tokens: Provide specific rights or benefits, such as usage of the property for a defined period.
Example Use Case:
A £1 million property can be tokenised into 1,000,000 tokens, each worth £1. An investor could buy 1,000 tokens for £1,000, effectively owning 0.1% of the property. This ownership might entitle them to a proportional share of rental income or capital gains.
