Real Estate Revolution: Tokenization Unlocks Liquidity and Slashes Costs
1min read Real estate asset tokenization, a process that converts physical assets into digital tokens on a blockchain, is poised to revolutionize the real estate investment landscape, according to Polygon CEO Mark Boiron. In an interview, Boiron highlighted the potential of tokenization to address key challenges in the real estate sector, such as illiquidity, high transaction costs, and the presence of intermediaries.
Boiron emphasized that tokenizing properties could eliminate unnecessary intermediaries, thereby reducing transaction costs. Additionally, fractional ownership and trading tokenized real estate on secondary markets would enhance liquidity and increase the velocity of money. Boiron noted, "The ultimate goal is to eliminate the illiquidity discount on real estate, making it more valuable when it's liquid."
Lumia Towers, a $220 million commercial real estate development in Istanbul, Turkey, has already leveraged Polygon's technology to tokenize the project. Boiron believes that the future of real estate lies on the blockchain, but regulators must first become comfortable with blockchain technology and public permissionless systems for tokenized real estate to become the norm.
In the United States, Quarter offers tokenized alternatives to debt-based home mortgages, aiming to increase homeownership levels and affordability for aspiring buyers. The company achieves this by assigning fractionalized equity rights to both property investors and prospective home buyers, which can be sold, deviating from traditional debt-based mortgage financing.
In the European Union, real estate platform Blocksquare launched a real estate tokenization framework in February 2025, allowing equity rights to be assigned and transferred on the blockchain. Real estate asset tokenization is also gaining traction in the United Arab Emirates (UAE), with property developers exploring tokenization as an alternative to traditional financing structures. Stablecoin issuer Tether has partnered with real estate platform Reelly Tech to expand the use of USDt (USDT) in real estate transactions in the UAE.
The global real estate market is increasingly embracing blockchain technology, with tokenization emerging as a transformative force. As regulators adapt to the new landscape and investors recognize the benefits of tokenization, the real estate sector is poised for significant change, with onchain real estate becoming an increasingly viable option.
