Tokenized Real Estate Falters

Tokenized Real Estate Falters

An idea was introduced to combine blockchain tokens and U.S. real estate but the idea started drying up at opening of the year. To concretize the goal college dorms, ski resorts and swanky Manhattam apartment got lined up. These grown-up investors would raise capital and issue loans using blockchain-based tokens following the ICO, initial coin offering, circus of 2017. It was expected that the idea breathe frictionless liquidity into real estate’s legacy system of finance. This hype got transformed into a joint venture between Fluidity and Propellr, which provides eligible investors and institutions with blockchain-based distributed ledger. A disappointment of seismic disruption to the industry compelled Fluidity and Propellr to shelve the venture earlier this year. Thus the project saw a termination officially. They thought that the tokenized market wasn’t ready for the real-estate use case.

Unfavorable decision

The idea of tokenization was taken to remove friction and stimulate liquidity in secondary market. STOs, Security Token Offerings, are fit for the tokenization of real-world assets. STO started operating private placement without maintaining rugged registration process. But fault was the absence of institutional capital. But I think this liquidity meant by them is market access. But the problem rose that institutions want to see liquidity before starting out but meanwhile issuers need to get tokens into the market to ensure their thereis. But this hype led them take an unfavorable decision as people had a dilemma and they needed to go through one side.  

Harbor’s hiccup

Earlier this year, an agreement to tokenize $20 million by blockchain startup Harbor DRW Holdings, real-estate arm of Chicago-based trading firm, fell apart as the parties took care of a no-transfer clause written into the mortgage on the property and the holder of the senior dept did not grant permission to transfer ownership.

Another fact is that the lender would not assent to transfer of the loan but the issue was not related to tokenization as confirmed.

OK boomer

The attention of Fluidity, which has been working on a Tokenized Asset Portfolio, has taken a turn to other attracting sectors. And hopefully you people will have a new fluidity product. Baby boomers want change at this point in their careers. They actually want the system to remain so they can extract as much as value out of it. During their time, Lippiatt and Fluidity co-founder Michael Oved co-authored a white paper considering the problem tokenization was attempting to solve around private placement. The proposal involved two separate tokens including senior, having priority of payments replicating debt, and junior, payments replicating equity. A recalling of the tokenization of a loan on a Brooklyn-based apartment block called FACTOR-805, which incorporates Dai, called by Lippiatt. Dai is basically a MakerDAO stablecoin. Receiving Dai as well as fiat and allocating Dai as interest payment mesmerized the attention of the SEC. The SEC then interviewed the team Propellr. Propellr remains focused on MakerDAO and the potential of multi-collateral Dai. They thing Act 1 and Act 2 will bring better protocol layers and solve some privacy issues and it’s a long play. San Francisco-based Harbor, having clients with tokenized securities, has recently helped tokenize $100 million worth of real estate funds in conjunction with the manager of those funds.

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