Landshare Feature Preview: Tokenized Assets
Landshare strives to offer accessible real estate investment opportunities on the blockchain. The most common model for selling assets on-chain is through tokenization.
Asset tokenization a very simple yet effective solution for blockchain real estate — it turns real world property into a liquid asset class through the use of special security tokens.
What is Asset Tokenization?
In a nutshell, a tokenized asset is any asset whose ownership is represented by a security token on the blockchain. For example, if there are 100,000 tokens for a given asset, and you hold 10,000 of them, you posses a 10% share in the value of that asset. Any profits generated from the asset (i.e, rental income) will then be distributed amongst the holders of the token.
How Does Asset Tokenization work?
One common question with asset tokenization is how it actually works in practice. For example, how can 500 different people own a house? Who controls the asset, and what kind of power do they have over it?
To solve these issues, the asset is not tokenized directly. Rather, the asset is held in an LLC, and ownership of that LLC is represented by the tokens. So when purchasing a tokenized asset, you are actually purchasing a share of the company that owns it.
In addition to the LLC which owns the asset itself, a parent company (in this case, Landshare’s management company) manages the asset on behalf of the token holders and takes a management fee for the services.
How Will Landshare Implement Tokenized Assets?
Using the general model presented above, the Landshare platform intends to offer tokens which represent a single asset’s owner LLC. These tokens use a modified ERC20 standard, where transfers are restricted to a list of whitelisted addresses. Addresses would be whitelisted when a user performs KYC to ensure legal compliance.
When your address is whitelisted, you would be able to buy, sell, or transfer the token on the Landshare platform. Holding the token would entitle you to a share of the rental income generated by the property.
In summary, the process is designed like this:
- An asset owned by an LLC which is tokenized and listed on Landshare
- Potential investors perform KYC and get whitelisted to ensure legal compliance
- Whitelisted users purchase asset tokens directly from the Landshare platform using BUSD
- Token holders receive a monthly BUSD payout representing their share of the asset’s profits
- The tokens can be sold back to the Landshare platform (restrictions may apply) or distributed to another whitelisted user using a third party token exchange service
Each tokenized asset purchase is made in 90% BUSD and 10% LAND tokens. The same payment ratio applies to selling the tokens back to the platform.
Can anyone sell their assets on the Landshare Platform?
Third party real estate investors may be eligible to sell their assets on Landshare. If you own an asset and are interested in selling through tokenization, please contact us at firstname.lastname@example.org.
Who can use this feature?
All participants will require KYC to purchase Tokenized Assets. Additional restriction may apply depending on your jurisdiction.
The following countries will not be permitted to use the Tokenized Asset features. Additional restrictions including time locks may apply depending on your country, and this list is not all inclusive.
- United States
- Burkina Faso
- Central African Republic
- Cote D’Ivoire
- Crimean Peninsula
- Democratic Republic of Congo
- DNR (Donetsk Republic)
- LNR (Luhansk Republic)
- North Ossetia–Alania Republic
- North Korea
- Pridnestrovian Moldavian Republic
- All US TERRITORIES such as American Samoa
- Northern Mariana Islands
- Puerto Rico
- Virgin Islands (USA)
- Trinidad and Tobago
When will this feature launch?
The first tokenized asset sale will be conducted November 2021. Details of the property can be seen at https://app.landshare.io/property-details. Prospective investors can click “Apply for Whitelisting” to be able to participate in the sale as soon as it begins.