One potential use case for real estate tokenization is to allow small investors to participate in the ownership of high-end properties. For example, let’s say a group of investors wanted to purchase a luxury vacation home in a desirable location. Without tokenization, each investor may have to contribute a large sum of money to be a part of the ownership group. With tokenization, however, the property can be divided into digital tokens, and each investor can purchase a smaller number of tokens, allowing them to participate in the ownership of the property without having to invest as much money upfront.

In 2022, the first real estate tokenization platform was launched in Asia, Xstate, allowing investors in the region to easily buy and sell fractional ownership in a variety of properties. The platform has already seen significant interest from investors, with millions of dollars’ worth of properties being tokenized in the first few months of operation.

Hypermode and IEC collaborated in an R&D effort to work on a real estate tokenization platform. The problem they were targeting was that many real estate companies have shifted their focus to digital media, such as online portals, websites, and social media. This brings in a set of problems like lack if digitization, scams, and lack of awareness. Moreover, people must do a lot of documentation, paper-based legalization and handbook registration is still being carried out which is an outdated and prone to scams approach.