There are various uses of blockchain technology since its arrival on the market, long gone are the days when it was only associated with cryptocurrency technology; Today, various industries are aware of the contributions in terms of traceability, transparency, security and trust that blockchain offers for carrying out commercial activities and exchanges without the need for third parties on the web. The real estate sector is one of the most benefited by the streamlining and optimization of processes that it offers for real estate businesses

What is real estate tokenization?

Real estate tokenization consists of dividing the value of a property into a specific amount of tokens that can be acquired by investors through a decentralized platform and for which profitability benefits are obtained.

Real estate NFTs represent a great advance at the level of development in business management for this sector, however, as expected, the legal management of these assets must be included to ensure that they are safe investments in the market; For this reason, different decentralized platforms have gone to the regulatory bodies in their local markets to provide a panorama of security and confidence to investors.

What is the CNMV (National Securities Market Commission)?

It is a public law entity with full legal personality, its own public and private capacity in Spain, whose jurisprudence and powers correspond to the securities market law. The CNMV will focus on ensuring the transparency of the securities markets, the correct formation of prices and the protection of investors, promoting the dissemination of all necessary information to guarantee the achievement of these objectives.

Functions of the CNMV

• Supervision and inspection of the securities markets.
• Supervision and inspection of the activity of all natural and legal persons involved in the traffic of those markets.
• The exercise of the sanctioning power over such persons.
• The authorization and verification of subjects and entities that intervene in the securities market and financial instruments, when so provided by current regulations.
• The other functions attributed to it by current legal regulations.

How to register my platform with the CNMV?

To register your own platform you must meet the following requirements:

• Submit the application for registration of the Company in the corresponding registry of the CNMV.
• Make a notarial testimony of the public deed of incorporation of the Company registered in the Commercial Registry.
• Submit an explanatory brochure and document with the fundamental data for the investor of the Company (sent electronically using the CIFRADOC/CNMV system).
• Send the composition of the board of directors electronically using the CIFRADOC/CNMV system.
• Deliver the certificate that accredits the existence of at least one hundred shareholders. (Only in companies admitted to trading on Stock Exchanges)

What are participatory loans and how to tokenize them?

**Participatory loans are those where, in addition to the ordinary and usual remuneration generated by the interests of the loan, a remuneration is obtained that depends on the benefits obtained by the borrower-beneficiary.

For the tokenization of this type of financial instrument, it is possible to resort to the use of security tokens (STO), cryptographic assets based on blockchain technology and integrated into a traditional financial asset, the most common, the debt issued by companies seeking to finance their projects.

What is a STO or security token offering?

Security token offering or STO,** corresponds to the purchase of tokens where an investor exchanges money for an asset**, it should be noted that STOs are safer than ICOS since they represent securities in the stock market. Based on the above, we can affirm that STOs are linked to assets such as real estate, arts, carbon credits, green bonds, reserves, collaborative credits, production in industries or reserves. STOs correspond to assets divided into millions of tokens through a non-fungible token to be used as negotiable financial instruments with an attached monetary value as part of the ownership of an asset

Types of STO

Capital or Equity Token

This is a stock token, similar to traditional shares in companies, except for how ownership is recorded and transferred on the blockchain, where they can be easily exchanged on the network without the intermediation of third parties. Capital holders are entitled to a share of the company's profits as well as a vote in decision-making.

Debt token

It corresponds to a short-term loan including an interest rate, in the amount granted by investors as a loan to a company; they can be made up of real estate mortgages, corporate bonds or other types of structured debt.

How to tokenize units that are currently in Fixed Profit Projects and their benefits?

Security tokens also represent the financial instrument in blockchain that is usually used to total fixed profitability projects.

Benefits of project tokenization. Below we present the benefits of using these:

Transparency

In the blockchain network, each process is auditable, its activities correspond to the equivalent of a ledger to track commercial exchanges of fungible and non-fungible tokens.

Instant Settlement

Liquidity is one of the elements of greatest concern for investors. In this case, transactions are carried out quickly, while the transfer of ownership can take a few days in terms of legal procedures. However, in blockchains such as CCSCEX, the process is automatic and fast.

Availability

Unlike traditional financial markets, commercial activities within the blockchain do not have any stipulated commercial hours, and are therefore available 24 hours a day, 364 days a year.

Divisibility

The opportunities represented by the totalization of an asset at the market volume level are important because it opens up a range of options through which a greater number of investors can participate for each available asset product. Tokenization democratizes retail access to a larger investor market.

What is a whitepaper for this type of project?

White Paper is an explanatory document of the business model that covers all the functional areas of the same, operations, finances, market, as well as a summary of the need that the project is trying to solve, the solution to the problem, as well as a detailed description of its proposal considering the way to interact with users.

Audit and certification process

Smart contract audits consist of a detailed evaluation of the characteristics that make up a blockchain project by a team of auditors with manual and automated tools focused on verifying the logical code of the project.

Smart contract audits generate security for online investors regarding the selection of an optimally profitable and appropriate project. Generally, once the audit is carried out, its results are published online so that it is publicly accessible. Audit execution times vary depending on the complexity of the Smart Contract.

How to create a tokenization platform in real estate projects?

-Initially, you must have the strategic alliance or the projects in development available, which would be offered to the market for financing through tokens. Once this first step is taken. -A blockchain network must be selected for the development of the app according to its scalability and fee costs. -Create and select the brand image and its elements -A landing page must be created with information about the project, its benefits, and business partners to offer the tokens through this means. -Then, work on the development of the blockchain-connected application where sections will be created for the exhibition of projects, graphs and investment indicators to call holders, inventory to see the acquired tokens, and rewards to claim the benefits of the tokens owned. -Creating social networks for the application, paying for advertising to communicate the project, alliance with prominent people in the media to make it known can be an excellent way to expand the initial market.

Re-invest staking pools through REFI safely

Regenerative finance is becoming more and more relevant every day in the carbon footprint tokenization market as well as in green investment proposals, capable of solving social needs and generating profitability for their shareholders, which is why they stand out as an excellent option to reinvest staking profits generated by other projects where participation is held.

UNIDO

Unido is a platform that provides a series of crypto custody solutions for economic entities, based on a state-of-the-art fragmented private key signing engine.

Enzyme Finance (MLN)

A protocol based on on-chain asset management where users can build and scale vaults based on the investment strategies of their choice

Tokenization in the real estate sector is here to stay, and it will only be a growing trend in the following decades. Don't forget to participate in this new world of blockchain business by analyzing your options in the market to obtain the best performance.

MiTSoftware offers you a series of blockchain tools capable of streamlining and optimizing your company's processes. Write to us for more information on web technology solutions.