Feature Preview: Landshare Tokenization Hub

9 min readJun 5, 2024

The impact of real estate tokenization is significant, offering increased liquidity, reduced transaction costs, and enhanced market efficiency. With global institutions like Blackrock already jumping in, the sector is likely to see significant growth in the future given the expected compounded annual growth rate (CAGR) of 19%. A study by the World Economic Forum predicts that by 2027, 10% of the global GDP will be stored on blockchain technology, with real estate being a major component of this shift.

At Landshare, we’ve been tokenizing real estate since 2021. Starting off with the first ever real estate offering on the Binance Smart Chain and following that up with the world’s first on-chain house flip, we’re used to exploring uncharted territory in the RWA space. Last year, our efforts culminated in the launch of the Landshare RWA Token, a real estate-backed security token that offers access to an entire pool of tokenized real estate with a single investment.

With the core investment mechanism now in place, we’ll be moving aggressively to grow and diversify the properties available on our platform. To achieve this, we are extending our services to 3rd parties property owners, including individuals, investment clubs, funds, corporations, and anyone else who is interested in tokenizing their real estate assets. This will be accomplished with our brand-new feature, the Tokenization Hub.

The Tokenization Hub will establish an On-Chain B2B solution for property owners, giving them access to Landshare’s existing base of real estate investors while simultaneously providing LSRWA holders new investment opportunities and a diversified property pool.

Before we jump in further, let’s summarize our primary goals and expected outcomes with this update:

More Properties: The Tokenizaion Hub will drive new properties to the Landshare platform by enabling third parties to tokenize their properties or cash flow.
New Property Types: Short term rentals, Airbnb, vacation properties, commercial, and global assets will be eligible for tokenization.
Tokenized Real Estate Solutions: On-chain real estate solutions designed to fit the needs of landlords, house flippers, and companies of all sizes.
Increased LAND Burns & Utility: Token burn rates will increase by driving more RWA volume. The growth of the ecosystem as a whole drives token utility.

The Tokenization Hub is designed to give property owners access to our existing base of investors and provide flexible and tailored solutions to fit their needs. We’ll cover that more later, but first, let’s take a look at the existing tokenization options for property owners.

Existing RWA Landscape

As a new industry, tokenization is often misunderstood by casual observers. While there is a tendency to assume every RWA project is offering the same solutions, there are in fact a wide variety of different of different applications for tokenization, each of which presents its own set of pros and cons.

The ideal fit for the individual project will depend on a number of factors, including the type of asset being tokenized, the value of that asset, and the outcome being sought after. All of these must be considered rather than trying to apply a one-size-fits-all solution to a multi-trillion-dollar industry.

For example, an entity seeking a large raise with the means to solicit investments themselves might elect for a white label solution, which gives them the flexibility they need to run an offering on their own terms. A smaller operation without a marketing apparatus, however, will likely not find success with this model.

Another major consideration is the fractionalization and management of the asset. For someone looking to sell a property outright, converting the ownership to an NFT and selling it on a marketplace may be the simplest option. For someone looking to fractionalize the asset, manage it and distribute income on-chain, however, this model is not feasible.

In our assessment, there exists a major gap in the existing tokenized real estate landscape. For property owners with small-to-medium sized portfolios, there are very few options that offer the combination of flexibility and cost efficiency they require. The prospect of launching their own offering is unlikely to succeed, and many of the other options are either too expensive, geographically restrictive, or fail to meet the specific requirements they seek.

At Landshare, we’ve spent 3 years making real estate more accessible to investors. Our next goal is to make real estate tokenization solutions a real option for property owners of any size and scale.

Landshare’s Tokenization Solution

When considering how we wanted to implement 3rd party tokenization solutions, we drew on our own experience in owning, renting, managing, and flipping properties. Rather than simply offering a marketplace to list assets for sale, we want to push things further by offering tailored solutions and alternatives to TradFi for property owners through tokenization.

Our process was fairly straightforward — we asked ourselves what type of services we wish were available for our own properties, while also considering the existing solutions in TradFi and how they could be improved. In doing so, we’ve developed a few primary examples of novel tokenization arrangements we intend to offer for property owners:

Partial equity: With this arrangement, property owners can tokenize and sell a portion of their asset, essentially borrowing against its value. These arrangements may or may not involve a buyback plan for the owner. Rather than taking on debt, property owners simply split the cash flow and equity of the property with LSRWA holders, making it an excellent alternative to a home equity line of credit (HELOC). This arrangement can also involve an outright sale of the asset (100% equity).
Renovations and flips: House flippers typically take on high-interest loans to purchase and renovate distressed properties. In many cases, they’re forced to race against the clock and cut corners to prevent interest payments from piling up. With our house flipping solution, flippers can receive investments from Landshare and split the profits with LSRWA holders, once again avoiding debt.
Cash flow: This arrangement would allow property owners to borrow against their future cash flow. In this situation, no equity would be transferred. Instead, LSRWA holders would continue to receive cash flow over time in an amount exceeding the initial investment.
Sell and Manage: Similar to the partial equity arrangement, if you’re an owner who manages your own properties, you can sell some or all of the equity while continuing to make an income managing the asset.

While this list covers a few of the basic arrangements, the possibilities are virtually limitless. Tokenization on Landshare is all about providing property owners the ability to tokenize their real estate in a way that fits their needs while also enhancing investor value. It can be viewed as a way of bringing property owners and LSRWA investors together in a mutually beneficial way. In other words, a symbiotic relationship is created between those who are seeking new assets to invest in and the property owners seeking to raise funds from their assets.

The Landshare Ecosystem

In the tokenization space, investors are not motivated solely by the assets themselves. Extrinsic factors, including staking opportunities, secondary market liquidity, and ease of use play a major role in making an investment opportunity attractive. With the Landshare RWA Token, we’ve spent a great deal of time developing and refining these extrinsic motivations, creating a solid base of motivated investors in the process.

This means that property owners won’t need to worry about promotion, liquidity, or offering additional incentives for investment. All of these components are already baked into the Landshare ecosystem, along with an existing community eager to invest in exciting new assets. We’ve built a platform with a clear value proposition for investors and asset providers alike.

Investor incentives (Demand)

Stable returns from RWAs
NFTs and RWA Token staking
LSRWA-USDT LP incentives
Secondary market access

Asset provider incentives (Supply)

Flexible solutions for a variety of needs
Built-in base of motivated investors
Hassle-free — we handle marketing and compliance
Debt free alternatives to TradFi solutions

Putting it all together, asset providers gain access to a motivated base of investors who are already engaging with the Landshare ecosystem, while LAND and LSRWA holders benefit from a proliferation of new assets entering the ecosystem. More properties mean more LAND burns, enhanced token utility, new NFTs, and a deeper RWA pool.

How it works

The Tokenization Hub will provide a central location for property owners to explore our on-chain solutions, with tools and guidelines to help them determine the best fit for them. When they’ve identified their preferred methods, they will be able to submit their properties for review to the Landshare team. This will initiate the four-step process of onboarding new assets.

Step One: Vetting

After a property owner submits their asset(s) on the Tokenization Hub, the first step will involve a thorough analysis to ensure the deal is a good fit for both parties. After determining that the owner’s fundraising goals align with our model, the Landshare team will take a close look at the property to ensure that it’s also a good fit for our investors.

For example, in an equity or cash flow deal, we would look at the property’s financial records, occupancy history, and inspection report to ensure that it’s in good standing and producing consistent returns. For a flip or renovation, on the other hand, we would put more emphasis on the neighborhood and potential upside. Each case is unique, and we apply the same standards to properties from 3rd parties as we would for any deal we’d make on the open market. In any case, we prioritize quality over quantity.

Step Two: Initiating the Deal

After a mutually beneficial arrangement has been established, the deal can be signed and finalized. It is important to note that Landshare does not act a broker between 3rd parties and LSRWA investors, but rather makes direct investment into the assets themselves.

In addition to finalizing the terms between Landshare and the property owner, this step will also involve finalizing the hard cap, soft cap, and offering length desired by the owner, if applicable.

Step Three: Offering

One of the major changes to LSRWA will involve the idea of “sprints”. LSRWA Tokens will be offered with fixed hard caps designed to meet the fundraising goals of each asset. Upon successfully reaching the hard cap for an asset, a new NFT model will be made available to LSRWA holders, and that particular sale will close.

The sprint approach allows us to give the community a clear fundraising goal and generate momentum via unique events surrounding each new addition to the RWA pool. With this model, we can showcase new additions to the platform before they’ve been fully raised, allowing for more efficient scaling and clearer incentives for investment. This approach will generate buzz around new properties, benefitting owners and investors alike.

Step Four: Asset Tokenization

The final step of the process is to tokenize the asset. As the offering progresses, funds will be made available to the property owner in exchange for equity and/or cash flow from the asset which are added to the Landshare RWA pool. When the hard cap is reached or the offering expires, the asset will be fully integrated into the Landshare RWA pool. This means a new NFT, monthly yields, and exposure to the property’s underlying value for LSRWA holders.

Closing Thoughts

The tokenization of real estate represents a shift in how properties are bought, sold, and managed. Drawing on years of experience in owning, renting, managing, flipping, and most importantly tokenizing properties, we have crafted solutions designed to succeed for property owners of any size.

As we move forward, our focus will be on expanding the RWA pool with new and varied property types, thereby broadening investment opportunities and further enhancing the utility of the LAND token. By connecting investors and property owners in our ecosystem, we’ll be creating new opportunities for both.

Keep an eye out for our complete Q3-Q4 2024 roadmap, which will include this new feature and a whole lot more. In the meantime, we encourage you to check out the many opportunities already available on Landshare:

As always, if you have any questions, concerns, or suggestions, don’t hesitate to reach out to us on our Telegram group or other social media channels. Remember — your participation and feedback are vital to the success of Landshare!

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