‘At your fingertips’ — this is what the digital world tells us! We are living in a world where we can get almost everything is accessible with ease, as a piece of cake. From tangible to intangible, that would perhaps be the best way to describe the change brought by digital technology. As every industry has its digital footprint, the services we request online reach us quickly. The real estate industry is the core part of the discussion here — blockchain/Web3 integrated with real estate!
Dubai Land Department opens new realm, real estate tokenized project
The recent announcement of Dubai Land Department (DLD) launching its debut real estate tokenized investment project speaks a lot to blockchain, real estate, and the emirate of Dubai. In simple words, the department is now allowing customers to purchase fractions of properties via the virtual real estate platform Prypco Mint, through a process known as real-world asset (RWA) tokenization.
What is Real-World Asset tokenization?
Isn’t it something amazing that you can convert real-world assets into digital tokens? This is exactly what Real-World Asset or RWA tokenization does by transforming traditional assets into digital tokens using blockchain technology.
Why is Real-World Asset tokenization important?
For every digitally turned service, such as online shopping, easier accessibility is a crucial feature. RWA tokenization also plays the same role by enhancing,
Increased accessibility: Customers can buy fractions of a high-value property, such as real estate, with relatively less capital. The virtually tokenized assets are easily accessible and available for users across the world.
High liquidity: The digital presence of the assets makes users easily buy and sell the assets when compared to the slow offloading process of traditional assets.
Security and transparency: All the transactions on a blockchain technology is secure and transparent with real-time auditing and traceability.
Lower cost, speedy transaction: Paying for brokers, middlemen, and banks is a headache in the traditional real estate business. However, tokenized real estate removes this pain and provides lower-cost and speedy transactions using blockchain technology.
How does Dubai Land Department’s new real estate tokenization work?
Dubai’s real estate industry is buoyant, and so is Web3 and blockchain adoption. The DLD’s tokenized real estate asset is activated through Prypco Mint, a blockchain-based real estate investment platform, and works on the XRP blockchain ledger. You might have been purchasing shares of a property in the traditional market. In the same way, you can now buy properties, but in digital tokens.
What’s so alluring in this new tokenized project is its lower cost! Yes, customers can now buy fractions of properties starting from a minimum of AED 2,000!
- Choose your tokenized properties
Each property listed on the Prypco Mint platform gives you clear and detailed features, including price, location, technical specifications, investment requirements, and even risk factors. - Own your virtual properties
Real estate tokenization allows fractional ownership of ready-to-own properties in Dubai. You can access lists of properties on Prypco Mint. Each of these properties is a digital token that represents a fractional share of a property. The project is currently accessible for Emirates ID holders only.
Why does this matter?
Owning a fractional share of a property allows for increased accessibility as multiple investors can co-own a single property.
- Purchase using Dirham
You can start buying the fractions of a property with a minimum of AED 2,000. Considering the project’s pilot phase, the DLD permits to use of Dirham only rather than paying in cryptocurrency. - Your funds are secured
The investment funds you spend on the property are secured in Client Money Accounts (CMAs) and follow regulatory oversight from DLD, Virtual Assets Regulatory Authority (VARA), and the Central Bank of the UAE. - Earn rental income
Once you own a fractional property, you can start earning a proportional share of rental income. In case of property value increase, you can avail of capital appreciation.
Is Dubai the first to tokenize real estate?
No, Dubai is not the first place in the world to implement blockchain technology in real estate. However, it is a pioneer in the MENA region, backed by government regulators such as VARA and DLD.
Globally, digital asset management firm Elevated Returns tokenized a portion of the St. Regis Aspen Resort in Colorado, US. Similarly, Propy, a real estate tech company, tokenized a $1 million property in New York City.
Besides real estate, Dubai and the wider UAE have already adopted blockchain technology across sectors, including RTA, Dubai Police, Dubai Customs, Ajman Police, and telecom giant Du.
