The real estate tokenization hype machine has slowed recently, but that’s because it churned so heavily a few years ago. Throughout 2018 and 2019, several examples of successful tokenization projects appeared in the media. One early example was a project by Aspencoin, which represented fractional ownership in the St. Regis Aspen Resort in Colorado. The ownership group behind the resort sold off 18.9 percent of the hotel through $18 million in digital tokens. The ICO was the first of its kind in the U.S. for a so-called single-asset real estate investment trust, according to the Aspen Times. The dream of real estate tokenization was starting to feel real.
But since then, there have been just as many tokenization failures. Perhaps the most notable loss was a high-profile joint venture between tech startup Fluidity and broker-dealer Propellr, who planned to tokenize a Manhattan luxury condo worth $30 million in 2018. The project was quietly shelved a year later, and both companies said the tokenized market wasn’t ready yet. “The market was just too young at the time,” Sam Tabar, a co-founder at Fluidity, told CoinDesk. “It didn’t have sufficient institutional appetite.”
Though the hype about tokenization has been quieter lately, that doesn’t mean progress has stalled. And it also doesn’t mean the benefits and potential transformative power of fractional ownership have faded. The total market cap of the real estate digital security market was more than $25 million in December 2020, according to a report from the Security Token Market. By June 2021, the market cap had grown to over $32 million, a 25 percent increase in six months. Regulation of real estate tokenization has become stricter, but there have been other successful projects in the past few years. These successes include RealT, which has tokenized about 75 properties since 2019. Polymath is another success story, having tokenized roughly $2.2 billion worth…
