Proptech Tokenization in the UK: Part 2

  1. Home
  2. 7startup Blog Posts
  3. Proptech Tokenization in the UK: Part 2

This blog is a follow up from our latest blog discussing blockchain and the future of proptech tokenization which can be found on the 7startup website.

Proptech Tokenization in the UK

Smartlands, the first firm in the UK to tokenize property, has renamed itself Definder to reflect its ambitious goal of becoming the world’s largest tokenization platform.

The company wants to tokenize $1 trillion worth of assets in addition to real estate and agriculture. The news that the platform’s parent company would change its name to Definder aims to better represent the company’s expansion into new business categories and geographical areas.

The company claims to have gained leadership in the real estate tokenization market by being the first to tokenize a property in the United Kingdom on the Stellar network.

It is now trying to capitalise on the predicted $17 trillion alternative assets market by expanding its portfolio to include physical commodities such as art and gold, as well as SME firm shares and other valuable assets.

Of the rebrand, Ilia Obraztcov, CEO of Smartlands, said:

“After successfully pioneering real estate tokenization in the UK, we have seen huge demand for a more diverse set of offerings, along with overwhelming support from our customers actively signing up to be the first to get access to the new opportunities.”

It is now trying to capitalise on the predicted $17 trillion alternative assets market by expanding its portfolio to include physical commodities such as art and gold, as well as SME firm shares and other valuable assets.

Utilizing state-of-the-art blockchain technology, the platform employs rapid and secure transactions, along with reduced transaction costs. Built on the Stellar network, the website is set to launch early this year, showcasing a waiting list of over 1,500 investors and a substantial following of 20,000 individuals. Furthermore, it possesses an “overwhelming pipeline of high-quality and profitable” real estate ventures.

Tokenization meaning

Hybrid Tokens and Utility Tokens

Some experts are skeptical about the viability of digitally fractionating specific assets. Singularly focusing on this approach risks misallocating resources and tarnishing the image of data tokenization, with concerns spanning various aspects. Conversely, optimism prevails within the market regarding tokenizing debt and funds, indicating a more favorable outlook.

Within this landscape, the hybrid token concept, seamlessly amalgamating security and utility attributes, presents intriguing possibilities. Momentum surges for fractional investing in the residential sector, as interest burgeons for semi-utility, semi-security tokens, offering a potential pathway to establish future shared ownership frameworks.

Nonetheless, real estate tokenization remains in a nascent stage, requiring time for maturity and acceptance. Evaluating its future involves weighing benefits against costs.

Relying solely on the digital fractionalization of assets carries the risk of impeding innovation. Utility tokens, meanwhile, hold promise for broad adoption. A token-driven system tracking and charging for space, energy, and consumable use represents a logical progression, akin to smart building passes and flexible space models.

Mitigating cost concerns, given expenses are spread across numerous transactions, utility token pricing should remain accessible. Hybrid tokens, marrying utility and return elements, also emerge as a bright prospect. Examples include fractionalized private residential initiatives and community infrastructure funding.

In sum, as digital fractionalization and tokenization advance, measured exploration of opportunities and judicious assessment of costs and benefits will shape their trajectories in the evolving landscape.

Proptech real estate

Conclusion

In an ideal realm, tokenization would bypass regulations, elude taxes (notably UK’s stamp duty), reduce fees, remove intermediaries, speed transactions, safeguard information, utilize blockchain efficiencies, and enable crypto trades.

Experts suggest only speed, privacy, and blockchain benefits can realistically result from data tokenization. Economic gains hinge on specific applications.

A significant gap exists between perceived real estate tokenization and pragmatic outlook due to improbable single-property tokenization.

Investing in proven, commercially viable blockchain solutions is wiser than risking misuse. Real estate tokenization’s early stage demands acceptance, understanding, monitoring, and reporting.

Numerous backers and cases showcase technology’s potential. Market expansion requires wider awareness, ongoing monitoring, and reporting of these new goods.

 

Amit Khanna

Amit Khanna, 7startup Founder

Amit has two decades of experience in the industry and an MBA. He supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, and fundraising. Amit & 7startup assist startups in the pre due-diligence process and help connect them to our vast network of investors. Reach out to us today and see if we’re a fit!

 

London Fintech: 2022 and the future
  In 2021, the fintech industry maintained its continuous rate of growth, generating $121.6 billion, a 153 percent rise in terms of worldwide VC transaction value year over year. The…
Menu