The first major asset in Manhattan has been tokenized on Ethereum. The luxury condo development features 12, 1700-square-foot units which utilize tokenization as a groundbreaking method of real-estate financing.
The security token sector continues to grow through the implementation of its real-world use case.
The most recent of which has reached Manhattan, which was estimated to contain $1.74 trillion worth of developable land in 2014. To put that into context, Canada— the world’s 10th largest economy— had a $1.79 trillion GDP in 2014.
Real Estate Tokenization as an Alternative to Traditional Financing
The listed broker is Ryan Serhant, a real estate mogul who stars in Bravo’s reality TV series Million Dollar Listing New York. In a recent Forbes article, Serhant explained how real-estate tokenization offers major advantages when it comes to property development.
“The market in New York is always strong, but it can take some time to sell for the right price in a new construction building. With blockchain tokenization, we can remove the unruly pressure of traditional bank financing, which is much healthier for the project and all of the stakeholders. Tokenization is paving the way for a new forefront in real estate development.”
From the funding of Hollywood films to traditional finance, the structure of securities has experienced very little change in the past 30 years. And that’s exactly what Propellr and Fluidity— the teams behind the new Manhattan property— seek to shake-up.
How Propellr and Fluidity Aim to Transform Property Development
Propellr helps firms to structure, raise, and service capital through its fully integrated broker-dealer. They’re also a parent company of FINRA registered broker-dealer, Propellr Securities. In this particular Manhattan project, they will sell both traditional and tokenized securities through Reg D rule 506(c).
Fluidity is the project behind Airswap. They offer a technology service which utilizes Ethereum to store financial transactions. They make use of smart contracts, Ethereum ERC-20 tokens, and Atomic Swaps, and have enabled Propellr to both accept fiat payments and sell securities.
For this specific property, investors can choose between the receipt of either digital or analog interests in securities.
Fluidity also plans to integrate Airswap technology, which provides benefits that were summarized by Fluidity co-founder, Don Mosites.
“Along with our flagship AirSwap, we’re building a system that brings local assets online using blockchain technology. This makes them available for trade on a global marketplace—directly among buyers and sellers. Fluidity is forming the foundation of a new system of tokenization and trade.”
Ultimately, both Propellr and Fluidity are in the midst of showing the full impact of blockchain technology not just for financial securities, but for the world. As stated by Fluidity co-founder Michael Oved,
“Going to market with a landmark deal allows us to make a statement—that this technology is now real. With the right partners and an optimized structure, we are bringing a major real world asset online. We are grateful we have the opportunity to lead the blockchain community in this new paradigm.”
How much of the real estate financing market will tokenization consume? Will tokenization be the next global alternative to traditional bank financing in property development? If so, who will be the leaders of that front? We want to know what you think in the comments below.
Image courtesy of Forbes.
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