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Tokenizing real estate and overhauling property investment markets has its challenges but is a killer use case for blockchain technology.
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Real-world asset (RWA) tokenization can completely overhaul the real estate investment sector, which is highly illiquid, filled with intermediaries, and high transaction costs, according to Polygon CEO Mark Boiron.
In an interview with Cointelegraph, the CEO said that tokenization of properties could remove unnecessary intermediaries, thereby lowering transaction costs.
The CEO added that fractional ownership and trading tokenized real estate on the secondary markets would open up liquidity and increase the velocity of money. Boiron told Cointelegraph:
“The thing you really want is the ability to eliminate the illiquidity discount on real estate. All real estate is illiquid and therefore it’s discounted to some degree. It can be more valuable if it’s liquid.”
Lumia Towers, an ongoing $220 million commercial real estate development in Istanbul, Turkey, featuring two skyscrapers with 300 mixed-use commercial and residential units, used Polygon’s technology to tokenize the project.
Boiron said that the future of real estate is onchain. However, regulators must be comfortable with blockchain technology and public permissionless systems before tokenized real estate becomes the de facto standard.
Lumia Towers conceptual photo. Source: Polygon Labs
Related: The $1 billion blueprint for tokenized real estate: RWAs shaping Dubai
Real estate coming onchain globally
In the United States, Quarter offers tokenized alternatives to debt-based home mortgages to increase levels of home ownership and make it more affordable to aspiring home buyers.
The company achieves this by assigning fractionalized equity rights to both the property investor and the prospective home buyer, which can be sold — deviating from the traditional debt-based mortgage financing that is the current standard in many jurisdictions.
In February 2025, real estate platform Blocksquare launched a real estate tokenization framework for the European Union that allows equity rights to be assigned and transferred onchain.
This article first appeared at Cointelegraph.com News
