It's a subject that i've looked into in the past and one that i feel is an undervalued use case of blockchain and crypto. In amongst all of the fads, scams and memecoins we all know that crypto has so many use case that it's just a matter of time and development before the wider population is using it without needing to know what is going on in the background.
It think that there are a lot or real business use cases that haven't been fully explored or built on yet. One that i can see having a big impact over the next decade is the tokenization of real estate.
If i have 10k in the bank is a savings fund for the future. I will want that money in 20 years to retire on and plan to keep adding to it over the year.
The problem as we all know is that money only loses value over time. That money sitting there is a huge waste and in 20 years time might not even have half the buying power that it does today, if even the way things are moving.
The other problem is that it is very hard to make a return on that money. My best savings option in the bank is 2% APR. Again on money that is losing value while it sits there earning tiny sums. Sums which are then taxed. Stocks aren't a great option here as our laws discourage it. Crypto is risky and most people don't want to put money into it even if they can figure out how to do it.
As a traditional investor I want something that is low risk, easy to get into and that can outpace inflation.
For that, I would love to buy some property and rent it out for income. Property that as a rule goes up in value over time while earning returns as it does. A great investment in this country.
The drawback now being that I can't afford property with just 10K and would need to save up a lot more as well as link in with the banks to get another mortgage and take on debt to make money.
Tokenizing property.
Imagine creating a business.
- A company that creates a token.
- All funds raised from people buying the token is pooled and used to buy property.
- That property is rented out.
- After running costs and other reductions,
Profits are paid out monthly to the token holders who funded these purchases.
Your 10K dollars purchased 10K property tokens. Every month those tokens entitle you to $100 deposited into your property wallet.
this money can be used to buy more tokens and compound your investment or withdrawn to your bank account.
The token is backed by real life properties.
The token can be bought or sold in the app.
They could release a new token per property or one token that works across the whole portfolio.
You can
Real estate tokenization seems like it will significantly contribute to this growth. The market size for real estate tokenization was $2.7 billion in 2022, and its growth trajectory indicates that it could reach $16 trillion by 2030 according to a report by the Boston Consulting Group.
Ref: Forbes
There is definitely a great business model in here somewhere and a profitable one for the person who can organise it, develop it and make it user friendly.
I wish that i was the guy to make it happen but i would be very surprised if somebody doesn't in the next decade.
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A lot of people are thinking about a lot of exciting ideas, that has come and gone, NFT was one of them. unfortunately real estate is that route no one has ever thought of.
It's an exciting model that should work
NFT's have great potential like we can see in splinterlands and in gaming. Unfortunately like most things in crypto there are too many bad actors and too much greed to make it successful.
Honestly, I don’t see 2% APR as a good investment
I feel it is too little or maybe I’m not contented
2% is shit but that is what you get form banks.
The trick is to find investments with 10% or more to beat inflation and make your bankroll grow.
They are hard to find though without a lot of risk attached.
Well, your point is valid
Bank deposits becoming the RWA tokens and stored in the bank that would be another good use case. This way they can eliminate the papers and the bank employees tampering with data is going to get fixed.
Blockchain will have a big use in transparent business practices going forward too.
Seeing how the money is moving and access for the public without the ability to interfere. Hopefully it will cut out some corruption in these traditional institutions.
I hope it does because the people in banks are less knowledgeable than us and we are forced to obey them. I mean we have learned how to operate decentralized wallets lik say ledger, metamask, and other and these bank people would make us lose IQ points force 4 step actions on their bank website and they will assume we are dumb. Human in between the tech interface has to reduce otherwise we will fall in our ability to protect our own selves.
Interesting crypto model, but could the token holders ever own the real estate or is it just, in effect, a share of rental properties?
You would own an equal share of the building to your token holdings. So that fraction of the revenue would belong to you and if the building was sold you would be entitled to an equal share as well.
That way your investment could also grow in value as well as earn returns on the initial investment.
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i think we need multiple RWA tokens across many sectors of human needs, such as:
Shelter (housing)
Food
Clothing
Health (eg. Holistic Healing Centers)
Education (holistic education - not the current brainwashing system)
Electricity
Decentralized Online communication
etc.
Each of these RWA tokens can be fractionalised.
Each of us can program our own basket of #RWA's to include a % of each sector based on our own usage. Thus we have our own personalised #stablecoin ($BHU perhaps) based on our individual needs, backed by the the stuff we need to fulfill our Basic Human Needs
Futhermore, these RWA tokens need to be privacy tokens.
i intend to experiment by minting a RWA token on #Zano
Not sure for what. Perhaps just something simple.
Thank you for sharing this information
I agree that tokenization is one of the greatest potential use cases I see so far.
While self custody of assets and being your own bank will continue to be out of the reach of most people, due to complexity and risk aversion. But tokenization in contradistinction to other crypto aspects , simplifies a process and opens it up to a larger population.
Tokenisation of asset is actually a great business model but my fear is it is also risky. Well at the end of the day, I think what is just needed is balancing
I would say that's it's low risk if ran properly. You are breaking up the value of a real world asset into small pieces for affordability. So the risk to lose money is only in the business being ran incorrectly or the asset going down in value.