A Decentralized Asset Tokenization System using Ethereum

Abstract

Abstract: Real estate is one of the most trusted investments that people have preferred. It provides a steady source of income which can be in the form of rent as well as lease. There are a number of advantages, but one of the key disadvantages of real estate investments is illiquidity. Although the global real estate investments are twice the size of investments in the equity markets, the number of investors in the real estate market is remarkably lower. Blockchain technology has real potential to solve the issues of illiquidity and transparency, and most importantly, it opens this very market to the retail investors as well. By creating Security Tokens, which are backed by real-world assets, real estate can be made more liquid with the help of Special Purpose Vehicles. These security tokens, which represent fractional ownership of the real estate can be traded by a trader / investor and these tokens can be listed on legitimate secondary exchanges. The robustness of Smart Contracts can be very efficient in transferring of tokens and also provide a seamless distribution of earnings amongst the investors / traders. This work describes Ethereum blockchain based solutions has the potential to make the existing Real Estate investment system much more efficient and reliable. Keywords: Tokenization , Blockchain , Fungible Assets, Tokens, Special Purpose Vehicle, Smart Contracts, Liquidity, Security Tokens,