Tokenization of real estate

Real estate tokenization is the process of representing property in digital parts called tokens.

These tokens represent the total or partial value of the property and can be bought, sold or exchanged, facilitating access to real estate investments through a platform with blockchain technology. In addition, it allows property to be divided into multiple shares, increasing market liquidity and facilitating access to investment by reducing economic barriers to entry. For developers, this solution offers an agile way to attract customers and obtain liquidity more efficiently and quickly.

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How does real estate tokenization work? What can be tokenized?

Tokenization converts real estate into digital assets represented by tokens on the blockchain. This process democratizes access to investment, allowing anyone to participate in a more flexible, secure and transparent way in the real estate market. Anyone, from anywhere in the world could buy a fraction of that property and generate passive income.

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At Unknown Gravity, we don't directly tokenize properties, but we offer the necessary technology so that companies can carry out this process quickly, safely and without complications.

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Our approach covers all the key stages of the process, ensuring effective and regulatory compliance implementation:

• Business model evaluation: Before starting tokenization, it is essential to analyze and define the business model. This includes identifying objectives, market opportunities and benefits for investors and owners.

• Creation and structuring of tokens: We design and prepare the requirements for the creation of the smart contracts that will govern the tokens.
  
  This step includes:
  • Selection of the most suitable blockchain network for the project.
  • Clear definition of contract terms, such as investor rights and obligations, distribution deadlines, payment terms and type of token.
  • Planning the token sale and distribution process
  • Creation of Whitepaper, token economy (tokenomics)...

• Verification and validation: The tokenization of real estate must comply with regulations. We collaborate with legal experts to ensure that tokens are valid from a regulatory perspective and that they comply with applicable securities laws.

• Issuance or distribution: Once the smart contracts are created, the tokens are issued on the selected blockchain network, ensuring a transparent and traceable process.

• Administration: It is crucial to establish a system to manage the token and keep investors informed with regular updates.

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It is necessary to be informed about compliance with legal and regulatory regulations to prevent financial crimes.

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What types of properties can be tokenized?

Several types of properties can be tokenized, such as:

• Residential: Individual homes and apartment buildings.

• Commercials: Offices, premises and shopping centers.

• Lands: Rural or urban properties.

• Construction: Projects under development with great potential.

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It starts with the valuation of the property, followed by the creation of a digital token that represents a fraction of that property.

These tokens can then be bought, sold, or traded on cryptocurrency markets.

Real estate tokenization It does not operate outside the legal system, but inside it. Ignoring this point is one of the main mistakes of failed projects.

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MiCA and real estate tokenization

The European Regulation MiCA establishes rules for certain cryptoassets and service providers.

Although MiCA does not directly regulate real estate security tokens, if it impacts:

• issuance of tokens
• cross-border marketing
• transparency obligations

Therefore, it must be analyzed from the start.

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CNMV and Investment Services Firms (ESI)

When tokens represent economic rights to a property, can be considered as financial instruments.

In these cases:

• The supervision of the CNMV comes into play
• Authorized ESI can intervene
• Do investor protection obligations apply

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Securities Markets Act 6/2023

La Law 6/2023 adapts the Spanish framework to the reality of digital assets and reinforces:

• legal security
• inverter protection
• coherence with European regulations

It is a key element in real estate tokenization projects in Spain.

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Notary and Land Registry

Tokenization It does not replace:

• The notarial deeds
• the land registry

These elements remain essential to ensure legal validity of the underlying asset.

The blockchain acts as technological layer, not as a replacement for the legal system.

• Immediate liquidity: Tokens can be easily bought and sold in the secondary market, thus generating liquidity for the asset.
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• Democratized access: Investors from all over the world can participate without the need for large amounts of money as a property would need in a traditional market, making it easier for those looking to invest smaller amounts or diversify their portfolio.

• Reducing costs: By eliminating intermediaries and bureaucratic processes through blockchain technology, operating costs are significantly reduced. This speeds up transactions and improves efficiency, making the process much cheaper.

• Full transparency: Every transaction and movement related to tokens is permanently recorded on the blockchain. This guarantees a detailed, accessible and secure history of all transactions, from the tokenization of the property to its sale and any other subsequent transaction.

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How to ensure security in the tokenization of real estate?

At Unknown Gravity, safety is an absolute priority, and we pay special attention to each stage of the process to ensure flawless results.
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Smart contract auditing‍

After the structuring and Development of smart contracts, we conduct a comprehensive audit to identify and correct potential errors or vulnerabilities. These contracts represent the fundamental rules of the system, and our goal is to make them robust and completely reliable, minimizing any risk.
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Functional and stress tests

Before launching the system, we carried out comprehensive tests simulating various scenarios, from the most common to the most extreme. This allows us to ensure that every component works perfectly, even under adverse conditions.
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Regulatory Compliance

We ensure that the entire process complies with applicable legal regulations, both local and international. We collaborate closely with legal experts to oversee every detail, ensuring that the system is aligned with regulations and is completely reliable for users.
Our commitment to security not only protects the business, but also builds trust in our customers and investors.

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Start your tokenization project with Unknown Gravity

Real estate tokenization is revolutionizing the market, and we want to help you be part of this transformation.

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We have a group of experts who combine technology, creativity and security in projects that don't just leave a mark... they make history!

So, contact us and make a difference in your real estate tokenization project.

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The tokenization of real estate does not consist of “digitizing a floor”, but of design a coherent legal, technical and economic structure, prepared to build long-term trust.