A $10M hotel situated in Bali, an Indonesian island, is set to soon be tokenized in what is just the latest example of how digital securities can open up new investment opportunities in, and provide liquidity to, real world assets.
Making the Deal Possible
Those behind this tokenization effort are a pair of companies by the names of CoFund, and Tokeny. The duo have indicated that CoFund will “…leverage Tokeny’s innovative platform to bring institutional-grade real estate assets to the masses,”. In doing so, CoFund will be issuing digital securities atop the Polygon network in the form of ERC 3643 security tokens.
The Finer Points
In this particular deal, CoFund describes the asset set to be tokenized as a ‘…luxurious hotel situated in the heart of Bali’. Like most tokenization efforts involving security tokens, investors will now be able to gain exposure to the hotel as an investment at a much lower cost than what would traditionally be possible. CoFund notes that in this instance, participation by eligible investors can be had for ‘…as little as $1,000’.
Neither company has yet shared the exact structuring of the security tokens, and whether they will be purely equity based, involve dividends, voting rights, etc.
Commentary
Upon announcing this tokenization effort, representatives from each CoFund and Tokeny took the time to comment.
Giri Kayogiswara, CEO of CoFund, states,
“Our ultimate goal at CoFund has always been to democratize real estate investment by making it accessible and profitable for everyone. With Tokeny’s proven platform, we can create a secure and accessible real estate investment market that meets the needs of all types of investors while ensuring compliance. This collaboration takes us one step closer to realizing our vision of a global real estate investment market that’s open to all and we are extremely excited in starting our journey with the amazing island of Bali.”
Luc Falempin, CEO of Tokeny, states,
“We are thrilled to be working with CoFund to help upgrade the real estate investment market. With the tokenization market accelerating, serious projects like CoFund are realizing that simple ERC20 tokens and NFTs don’t meet compliance needs. Our technology platform leverages the ERC3643 token standard to ensure our partners can enforce compliance, even on a permissionless blockchain. CoFund’s real estate expertise and our technical capabilities make for a powerful combination, bringing accessibility to real estate investment.”
In Other News
As mentioned previously, the above development is just the latest example of tokenization efforts involving real world assets. Such efforts, which have been garnering an increasing amount of attention from financial institutions like Citi, have also been undertaken by companies like Freeport in recent months. Rather than tokenizing a low-liquidity asset like real estate however, Freeport has chosen to do the same for prints by fame artist, Andy Warhol.
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