Tokenization's pitch is simple: put a property on-chain, split it into digital shares, and suddenly a $2,000,000 building has a $200 entry ticket. The harder question — the one the industry is now wrestling with — is once a property is on-chain, what does a buyer actually hold? Slice the building below and follow the math.
Tokenize It
Drag to rotate. Gold blocks are the tokens you hold. Net rent assumes $12,500 gross monthly rent minus 28% operating costs — realistic for a small US multifamily property.
The stack behind a token
1 · The legal wrapper
Almost no project puts the deed itself on-chain. Typically an LLC or special-purpose vehicle (SPV) owns the property, and tokens are shares in that entity — securities, in most jurisdictions. If the token contract and the legal documents disagree, the paper wins in court. This is the single most important thing a buyer should verify.
2 · The token layer
A smart contract (commonly ERC-20 with transfer restrictions, or ERC-3643 for compliance-aware tokens) tracks who owns how many shares and can automate rent distribution: the 5% holder above receives $450 of a $9,000 net month automatically, pro-rata, with an auditable record.
3 · The market layer
The promised upside is liquidity — selling a 5% slice without selling the building. Reality check: secondary markets for tokenized property are thin, and a token is only as liquid as its buyer pool. Illiquid assets don't become liquid by changing databases; they become divisible, which is different.
Fractionalization changes access, not risk. A $200 token of a vacant building loses value exactly like a $2M deed does. Due-diligence checklist: Who holds legal title? Is the token a registered/exempt security? Who audits rent flows? What happens to token holders if the SPV goes bankrupt? Can you actually redeem or vote?
The technology solves real friction — 6–10% transaction costs, 30–90 day closings, $50k+ minimums — but the underlying asset math is unchanged.