What is tokenization?
Tokenization is a fully regulatory-compliant process that converts a real-world asset into a digital security. These tokens can be bought, sold, and traded like shares. Tokenization happens in two stages: first, the asset is
digitized, and then it is securitized, meaning split up into tradeable shares.
Tokens are first purchased by investors in a security token offering (STO), similar to the IPO phase of a public company. Following the initial sale, these digital securities can be traded in secondary markets, creating demand and
Is there a lot of tech setup?
With SolidBlock’s platform, you don’t need any specific technology knowledge to issue, buy, or sell security tokens. It’s as easy as online banking. We take care of the technical details to bring asset owners and investors together
with as few barriers as possible.
What are the advantages of tokenization?
Major benefits of tokenization over other types of real estate investment include a far smaller minimum investment. This creates an opportunity for investors who couldn’t ordinarily invest in real estate investment products. More
investors can mean a quicker time to completing the raise.
For investors, investment is also faster and simpler thanks to operating transactions through a fully-digital online platform rather than third parties, bureaucracy, and paperwork.
For asset or fund owners, tokenization means raising capital more efficiently from a much more diverse and global investor base while giving investors unprecedented access to private real estate investments, transparency, and
Is tokenization legal? That sounds like a way of hiding from regulations and taxes.
Absolutely! In keeping with stringent know your customer (KYC) and anti-money laundering (AML) regulations in various jurisdictions worldwide, SolidBlock platform provides rigorous identity checks prior to an asset owner or
investing being admitted. In jurisdictions which require it, we also ascertain that an individual or organization is a properly accredited investor when there is a regulatory requirement to do so.
We also advise all investors and asset owners to find out the rules for proper reporting of tokenization income to comply with their local tax regulations. We believe regulatory compliance rules exist to keep investors and asset
owners safer, and we go above and beyond to ensure compliance and use our technology to make the process easier.
Can tokens be bought and sold across multiple jurisdictions?
Yes! However, in order to comply with local regulations, a compliant structure must be created for the tokenized security in every jurisdiction where investors will buying and selling the tokens. As the world moves toward greater
standards for digital securities, greater interoperability may become available, creating truly international marketplaces.
What do investors actually get when they invest?
Investors receive the value of their investment (stock / share value) in the form of security tokens, a digital asset, which represents their equity ownership stake in the project. They may also receive dividends paid out at rates
and intervals determined in the original agreement. It is possible that, as with other types of securities, the value of the token held by investors may increase with secondary market trading.
Can I hold my tokens in my hand? What do they look like?
Tokens are issued as a secure digital file. Investors may store the tokens in their crypto wallet if they choose to or entrust it to SolidBlock’s platform to provide what are known as “custodial” services (the majority will choose
Can tokens be traded elsewhere? I don’t want to be locked in.
Yes! Thanks to SolidBlock’s network of marketplace partners, investors can enjoy the benefits of secondary trading on a range of platforms to support our commitment to maximum liquidity.
What is blockchain? Isn’t it a little sketchy?
Blockchain is just the name for the secure digital ledger technology on which SolidBlock’s system is built. Since these digital ledgers are protected with ultra-tight cryptographic security, the whole field came to be known as
This technology has already been around for over a decade and is used by regulated organizations such as banks and governments for applications like supply chain tracking, internet of things (IoT), as well as for digital currencies,
most famously, Bitcoin. Real estate asset tokenization represents the convergence of real estate investment and blockchain technology.
Are security tokens the same as Bitcoin? Are they the same as utility tokens?
No. SolidBlock’s security token offerings shouldn’t be confused with other crypto and blockchain-based offerings. These include cryptocurrencies like Bitcoin, Ethereum, Ripple, and others. You may have also heard of utility tokens,
which are not backed by real assets but rather represent future value (utility) of a company’s goods or services.
Unlike both of these models, SolidBlock’s offerings are backed by real estate, which has the advantage of a standardized valuation (appraisal methodologies), giving the tokens a verifiable real-world value.
What kinds of real estate projects is tokenization best for?
Almost any project can be funded with tokenization. So far, around the world, tokenization has been used or is being piloted to jumpstart projects around commercial and residential real estate with both, equity- and debt-based
securities issued to investors.
Can we use bank financing with tokenization
At the moment, big financial institutions still have a significant hold on the lending market and offer relatively low interest. SolidBlock is advising to work with lenders to leverage the project and use our platform to complete
the equity part (downpayment).
Who can I turn to if I have more questions?
At SolidBlock, we’ve built up an incredible network of business, tax, investment, and legal advisors and partners. We’ve been in this field longer than almost anyone else. So if we can’t answer your question about tokenization, real
estate investment, blockchain and crypto, or any other area of our expertise, we’ll happily refer you to someone else who can.