Breaking Records via Tokenization
RealT has created the world’s fastest purchase-to-transfer system of property ownership.
Purchase to Ownership in <4 hours
RealT is constantly reducing purchase-to-settlement time. We’ve gotten it so low that we’re breaking world records for property transfer times. And we’re not even done.
The benefits of ‘tokenization’ have largely just been theorized. In theory, they are more liquid. In theory, they cost less to issue. In theory, there is a global supply of potential customers. How has the promise of a tokenized world stacked up to the vision?
As the 2017–2018 ICO bubble ended with a deafening silence, there was a resurgence in the interest of potential “Tokenized Securities” or “Tokenized Assets”. This is because of the belief that the innovation of tokenization was real, even if the ‘ICO’ was not.
What are the theorized benefits of tokenized assets?
- Liquidity — global marketplace, more liquidity, right?
- Fractionalization — Infinitely divisible, opening access to anyone
- Settlement times — Tokens move at the speed of Ethereum
- Compliance — Can be ‘baked in’, reducing bureaucracy costs
- Costs of Issuance — Asset issuers will prefer tokens due to their low cost
Breaking a World Record of Issuance Time
RealT has executed the world’s fastest real estate purchase-to-asset transfer time, ever. No other platform in the world lets you sign up and receive ownership of real estate in under 3 hours.
What enables us to do this? What’s real about the theoretical benefits of tokenization?
At RealT, we’ve learned a few things about the realities of tokenized assets
First is that settlement times, compliance, and cost of issuance are all intertwined with each other. The benefits of each one reinforce the benefits of the others.
Compliance on RealT is a simple form that takes 2 minutes to fill out (30 seconds, if you already have a photo of your ID ready to go). The back-end confirmation of a user’s KYC form takes roughly 15–30 seconds. The user’s Ethereum address is then appended to the RealToken whitelist, allowing them to send and receive tokens.
This ‘baked-in’ compliance improves both settlement times and costs of issuance. Due to the whitelist, all compliance diligence is done once. After that, this task is outsourced to Ethereum. Humans no longer need to provide continued exchange oversight; Ethereum does that for us. For RealT, this brings the costs of exchange down to 0. For RealToken holders, the cost of exchange is the price of gas ($0.01), and the speed of exchange is the Ethereum block-time (12 seconds).
Which brings us to settlement times. A user can arrive on RealT.co and receive a share of property just a few hours later. This is made possible by the innovations above, which are enabled by tokenization. Compliance is a ‘one-and-done’ event, and the settlement times are seconds. The longest part of the process is signing the legal documents involved, which come in the form of a Docusign email and involve no more than 4 fields to fill out.
The best part about this is: We’re not even done automating. RealT’s goal is to reduce the purchase-to-settlement time down to 15 minutes by the end of 2020. Our vision for the future of RealT is that investors can arrive on the website, purchase a share of real estate, and have it in their Ethereum wallet within 15 minutes, where they begin accruing rent immediately.
RealTokens pay their owners rent on a 24-hr basis, and reducing settlement times adds to this magic. Buy RealTokens today, receive rent tomorrow!
One improvement at a time
The theoretically-tokenized world that came out of the 2017–18 mania was kept alive by a few core beliefs.
Faster Settlements
Faster trade settlements are in part a byproduct of higher liquidity. The increase in speed is also derived from blockchain technology. Cryptocurrencies can typically settle in minutes, and while those tokens are far simpler than asset-backed security tokens, they serve as a benchmark for what’s possible in trade execution times.
✅ — RealT’s got this one
Compliance
One of the biggest headaches when dealing with securities is ensuring compliance across all regions or jurisdictions in which an asset is traded. Most regions have their own regulatory body with its own set of rules and guidelines. Through tokenization, compliance can be automated through smart contracts and coded into the asset itself.
✅ — We’ve got this one, too
Liquidity Premium
The “illiquidity discount” is the price a user has to pay for trading an illiquid asset, and is typically around 20–30%. The opposite of an illiquidity discount is a liquidity premium, the increase in value derived from the higher liquidity of an asset. Tokenizing an asset opens up the potential investor base to a much larger audience by lowering the barriers to entry and making the process of buying and selling securities more accessible.
❎ — RealT is currently working on our solution for enabling liquid Real Estate. Stay tuned for our next announcement!
Join us in breaking down barriers!
Join the global set of RealT users who are receiving rental payments from U.S. real estate properties every day!
