Tokenization is an updated version of traditional fractionalized property ownership. Tokenizing ownership means converting a physical asset such as real estate into several digital tokens; those who buy the tokens then own a portion of the equity in that asset.
Tokenization is the process of creating a virtual token to represent ownership of a real estate interest. Rather than dealing with regular real estate interests in an outdated manner using paper documents, purchasers are able to engage in transactions digitally using tokens. Tokenization is flexible: a token could represent ownership of the underlying real asset, an equity interest in a legal entity that owns that asset, an interest in a debt secured by the asset, a right to share in profits arising from the use of the asset, and more. The types of real property involved can also vary widely, including single-family homes, multifamily structures, office buildings, warehouses, retail spaces, and everything in between.
