RWA: a new driver for the global real estate market

According to Deloitte analysts, the tokenized real estate market — a significant segment of real-world asset (RWA) — could grow to $4 trillion by 2034.

The main driver behind this trend is the decentralization of asset ownership: while real estate investments used to require significant capital, a share in a property can now be represented by a token worth $100 or even less. These financial instruments are already being used in real-world applications.

RealT: decentralized investment in U.S. real estate

RealT is one of the tokenized real estate market's first and most prominent players. The company offers retail investors the opportunity to participate in the residential real estate market with a minimum investment of just $50. Each property listed on the platform is divided into shares represented as tokens on the Ethereum blockchain (and partially on Gnosis Chain), which confirm the right to rental income and potential property appreciation.

Token holders receive income in stablecoins (USDC, DAI) proportionally to their holdings, with payouts made weekly. This is in stark contrast to the traditional market, where rental income is typically distributed monthly or quarterly.

RealT handles legal and operational matters, including property management, tenant relations, and maintenance. Investors become passive co-owners, gaining access to high-yield U.S. residential real estate from anywhere in the world.

Lofty AI: tokenization and real-time management

Lofty AI is a platform focused on "smart investing" in U.S. residential real estate through tokenization and algorithmic analytics. Lofty enables the purchase of tokens with a minimum investment of $50 and employs artificial intelligence for property selection, risk assessment, and dynamic pricing. Each token corresponds to a share in an LLC (limited liability company) that owns a specific property.

A unique feature of Lofty is the ability for token holders to participate in management decisions, voting on key issues such as renovations, changes in property management, or rent adjustments. This creates a decentralized governance model akin to a DAO (Decentralized Autonomous Organization).

Why tokenized real estate is in demand

One key advantage of RWAs is the broadening of the investor base. Through tokenization, real estate investment becomes accessible not only to institutional investors but also to individuals around the globe.

According to a Boston Consulting Group estimate, the total value of all tokenized assets could reach $16 trillion by 2030, with a significant portion tied to real estate. Tokenization also reduces transaction costs: while traditional real estate deals can take up to 45 days and cost 5–10% of the transaction amount (due to notary services, agents, taxes, etc.), the blockchain process can take just hours and cost less than 1%.

Skepticism and liquidity: the other side of the coin

Despite growing enthusiasm, the tokenized real estate market faces criticism. Michael Sonnenshein, managing director at Securitize, noted:

"Yes, blockchain can remove intermediaries, increase transparency, and automate processes. But in practice, most real estate tokens remain illiquid. For an online economy, that's a serious drawback."

Liquidity refers to the ability to sell an asset quickly without a significant loss in value. If real estate tokens are not actively traded on secondary markets, investors may be "locked in" indefinitely. In 2023, average monthly liquidity for real estate tokens on major platforms like RealT and SolidBlock was under 5%, indicating extremely low turnover compared to traditional equity markets.

Moreover, regulatory issues remain unresolved: Tokenized assets may be subject to securities regulations in different countries, resulting in legal and tax implications.

Conclusion: a transformation worth watching

RWAs and tokenized real estate are not just a passing trend but a potential blueprint for restructuring the global market. If Deloitte's forecasts come true, this segment could become a cornerstone of a new digital asset economy. However, key challenges must be addressed — improving liquidity, establishing legal frameworks, and earning investor trust.

In this sense, we are at the beginning of the road. Much like the internet in the 1990s or cryptocurrencies in the 2010s, it is now crucial to track growth and understand the trends shaping this new market, which could redefine real estate ownership over the next decade.