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Tokenized Real Estate did not live up to the initial hype

July 31, 2020

When the initial coin offering (ICO) boom subsided and the downward trend of the cryptocurrency began to emerge in 2018, Many analysts predicted that stock tokens could drive the next market cyclewith the huge capital that is stored in the real estate sector and is tokenized.

With the halving of Bitcoin, Ethereum 2.0 and the advent of the DeFi sector, which has recently aroused the imagination of the cryptocurrency markets, Tokenized Real Estate Sale is no longer the taste of the month, and some are questioning its profitability.

Tokenized property sales in 2017/2018

In an article in The Investor, Matthew McAuley, Global Research Director at JLL Real Estate Services said:

“Blockchain technology in the real estate sector has been very slow, although it has been touted as a game changer for several years.”

Tokenized Real Estate did not live up to the initial hypeTokenized Real Estate did not live up to the initial hype

The first real estate sale that was processed with cryptocurrencies took place in 2017, when a $ 60,000 apartment in the Ukrainian capital of Kiev was purchased by TechCrunch founder Michael Arrington via Ether through the Propy platform.

The following year, 2018, the momentum continued when ‘Aspen Coin’ distributed tokens that held $ 18 million in a resort 5 star hotel with 179 rooms in Colorado. It was the world’s first real estate token offering.

A luxury condominium in Manhattan with an estimated value of $ 30 million also announced a sale through a stock token offer by the tokenization companies Fluidity and Propellr.

Real estate tokens will fail in 2019

However, The Manhattan project was discarded the following year due to a lack of institutional appetite for the offer.

The absence of established secondary markets for trade in securities brands also hindered the sectorBecause the Aspen Coin was originally listed on the dark Templum markets.

The efforts of the online retailer Overstock to introduce a regulated alternative trading system for security tokens in the form of tZERO also appeared to be a success last year.When Patrick Byrne’s dramatic departure led to lawsuits against Overstock and his executives.

Will tokenized real estate gain momentum?

McAuley believes that blockchain technology is not yet able to have a lasting impact on the real estate industry.on the grounds that more computing resources, a legislative apparatus and “a practical solution to the immutability” are needed to make the sector dynamic again.

“It is hard for me to believe that blockchain technology will be used or useful in the real estate sector as originally thought.”

Sign of life

While tokenized properties may not have lived up to the initial hype, Progress has been made steadily. Overstock’s TZERO grew to more than $ 2 million a month in stock token trading before launching support for Aspen Coin, which recently changed its name to ASPEN.

The RealT property tokenization platform has also completed 16 token offerings They represent real estate in Michigan real estate and currently offer active token sales for two properties, including a home in Florida. Nine real estate brands indeed are sold in RealT’s secondary marketswith a monthly volume of approximately USD 90,000.

In April, Germany-based Black Manta Capital launched $ 12 million worth of shares in 2,000 square meters of Berlin apartments. The Dubai government has also made significant progress in building blockchain technology. from the real estate sector of the Dubai Land Department (DLDRE) in recent months.

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