Asset Tokenization for Real Estate Trend & Cases

1. Asset Tokenization
as an Industry Game Changer
Jongseung Kim
SK telecom Blockchain Business Development Unit
2018. 9. 12

2. Why Asset Tokenization?

3. Blockchain Initiatives
NewBiz.
Development
EfficiencyPlay
Digital Asset
Market
Record Keeper
Crypto-Wallet
ID/Authentication
BlockchainDisruptor
(Startup)
Logistics
Crypto-Exchange
SupplyChain
P2PEnergyTrading
RealEstateService
P2PInsurance
Digital Gold Service
CarbonTradingSocial Platform
HealthRecord
LandRegistry
Digital Voting
BlockchainCorePlatform
Legacy
Transformation
Short-Term
Value Driven
(Legally approved)
ReduceCost
(LegacyIntegrated)
ICO Driven
ReduceFraud
Mid-Term
<Source:PayAttention to These4TypesofBlockchainBusinessInitiatives(Gartner, 2018)>

4. What is Asset?
<Source:https://en.wikipedia.org/wiki/Asset>
ü In financial accounting, an asset is an economicresource.
ü Anything tangible or intangible that can be owned or controlled to produce value
and that is held by a company to produce positive economic value is an asset.
ü Assets represent value ofownership that can be convertedinto cash(although cash
itself is also considered an asset).
• Current Assets :Cash andcash equivalents,
Inventory, Prepaidexpenses
• Fixed Assets :land, buildings,machinery,
furniture,tools, IT equipment
Tangible Assets
• Goodwill,copyrights,trademarks, patents
and computer programs, etc.
• Financialassets, includingsuchitems as
accounts receivable,bondsand stocks, etc.
Intangible Assets

5. Asset backed Tokens
<Source:https://en.wikipedia.org/wiki/Property_rights_(economics)>
Property
(Asset)
Rights
Right to Earn Income
from the Good
Right to Enforce
Property Rights
•Needtobe RegisteredLegally
•Profit is Divided
Security
Token
Utility
Token
Right to Transfer
the Goodto Others
Right to Use and
Occupythe Good
•TimesharewithoutOwnership
•Accessis ControlledbyContract
-Tokens are digital
representations ofreal-
world assets, are thus
backed bythem
-Rights are grated tothe
token holders.

6. Digitization vs. Tokenization
<Source:https://bankex.com/static/whitepaper.214a1621.pdf>
• Automated smart contracts for deal execution
• Commands for automatic transactions
• Formulas forcalculationof the asset price
• Automatic validationofthe initialdata
Tokenization = +Digitization Financial Components

7. Tokenizing assets : 60+ blockchain startups
<Source:http://researchly.leobosankic.com/2018/06/29/blockchain-companies-tokenizing-the-real-world>
Real Estate Realisto,Bitproperty,DomusCoins,imbrex,Brickblock
Utilities WePowerNetwork,water.bankex
Commodities OneGram, Orocrypt,DigixDAO, ChainTrade,Smartlands,GoldMint
People TokenStars
Collections: Art andtrading cards Maecenas,EtherLegends
Media and Apps: Financing movies,
Instagram accounts, Apps
MovieCoin,AppToken,MEDIATOKEN
Traditional financial assets BlackmoonCrypto,Smartlands,Dharma, CoinLoan,BlockchainCapital

8. Benefits of Asset tokenization
<Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson>
§ Liquidity ofassets / Liquidity Premiums
§ New economicmodels around asset ownership, such as fractional ownership.
§ Diversification ofrisk arising out of asset ownership
§ Eliminating temporal/territorial barriers for asset owners forattracting investments
§ Reducing entry barriers for trading and investing
§ Newer models of raising capital, by allowing projects that are under development
to issue shares in form of tokens to finance project development
§ Utilizing network effectfor certain products to increase their popularity in the
market, by providing direct financial incentive to fractionalowners
§ Reducing administrative expenses

9. Real Estate Asset Tokenization Service Cases

10. Global Real Estate Universe in Comparison
<Source:http://www.savills.com/impacts/economic-trends/8-things-you-need-to-know-about-the-value-of-global-real-estate.html>

11. Global Real Estate’s Annual Growth
<Source:http://www.savills.com/blog/article/216300/residential-property/how-much-is-the-world-worth.aspx>

12. 44 Real Estate Cryptocurrencies
<Source:https://cryptoslate.com/cryptos/real-estate>

13. Crowdvilla : $24,900,000 in properties’ contributions
<Source:https://crowdvilla.io>

14. Crowdvilla : Model Overview
<Source:https://crowdvilla.io>

15. Crowdvilla : Token Point System
<Source:https://crowdvilla.io>
ü Each Crowdvilla Token(CRV) denotes ashare of time-value for the use ofall properties
in the Crowdvilla portfolio.
ü CRV holders earn Crowdpoint Tokens(CROWD) in perpetuity(i.e.on an ongoing basis for
as long as the portfolioexists).
ü CROWD Tokensare used to book stays in the properties.
ü The number ofCROWD Tokens generated is proportionalto the number of CRV Tokens
held and the length ofthe holding period.

16. REIDAO’ Model
<Source:https://reidao.io/#benefits>
ü Every real estate that is registered
will have its own Ethereum address
where users can visit and retrieve
information about the property,
including its ownership details.
ü REIDAO’sunique property token
will follow acertain standard that
makes it usable for otherservices
built on the Ethereum blockchain.
Affordable,Diversification, Market Liquidity, Versatility, Global, Security

17. Primalbase: Mission & Business Model
<Source:https://primalbase.com>
Primalbase is transforming traditional officerental and creating a next-generation
community-based ecosystem where it is possible to share, sell or rent out high-quality
working spaces using Ethereum and Waves-based digital tokens.

18. Primalbase: Workspaces
<Source:https://primalbase.com>
Tokenpossession providesunlimitedlifetimeaccess to all Primalbase workspaces.
• 1 PBT — 1 workspace for 1 personat any location.
• 4 PBT — 1 private officeformax. 2 weeksdependingonits availability

19. Imbrex : Vision
<Source:https://imbrex.io/#!>
Imbrex is foundedon the principle that the real estate industry should be in controlof
its proprietary data. Listing agents should have direct access to their leads and
exposure on a global real estate network.

20. Imbrex : Data Escrow Contract
<Source:https://www.linkedin.com/pulse/official-guide-real-estate-blockchain-stephen-king>

21. Asset Tokenization Platforms

22. Tokenestate : Tokenization as a Service for Real Estate Funds
<Source:https://tokenestate.io/index.html>
ü Tokenestate provides an end-to-end
solution for real estate fund managers
to tokenize their fund,issue their own
real estate tokens in formof
cryptosecuritiesand access to a large
poolof retail and institutional
investors.
ü Tokenestate will take care of all legal
aspects, required technical solutions
and the fund raising process.

23. Tokenestate : Conceptual view of Tokenestate.io, TEIVs & RETOs
<Source:https://tokenestate.io/Tokenestate_io_Whitepaper.pdf>

24. Bitproperty : Vision
<Source:https://btptoken.io/en>
ü Bitproperty is a decentralised real estate
platform powered by Ethereum smart
contracts.
ü Bitproperty has two types of token: the
BTP platform token and individual
property asset tokens.
ü BTP tokens represent the inherent value
of the platform and provide holderswith
income fromtransaction fees within the
platform in proportionto the amount they
own.

25. Bitproperty : How it works
<Source:https://btptoken.io/en>

26. Bitproperty : Real Estate Purchasing Due Diligence
<Source:https://realisto.io/files/papers/Whitepaper/REALISTO_Whitepaper_V1.2_EN.pdf>

27. Bitproperty : Offering Projects
<Source:https://btptoken.io/en>

28. BANKEX : Operating system for capital markets
<Source:https://bankex.com/en>
• BANKEX is developingatokenizationecosystem, providingtechnology/servicesat everystage.
• BANKEX brings bank-as-a-service and blockchaintogetherto transform capital markets.

29. BANKEX : Tokenization Process
<Source:https://bankex.com/static/whitepaper.214a1621.pdf>

30. Swarm Fund : Mission and Swarm Platform Structure
<Source:https://swarm.fund/swarm-basic>
ü Swarm Fund is the blockchain
for private equity.
ü It’s a fully decentralized capital
market place that
democratizes investing by using
the power ofthe blockchain to
open up high-return,
alternative investment classes
to smaller investors through
asset-backed funds using
cryptocurrencytokens.

31. Swarm Fund : Basic Structure of the Swarm Token
<Source:https://docs.swarm.fund/swarm-whitepaper-eng.pdf>
SRC20 security tokens:
• represent ownershipofpart
ofan object or“asset”,
• allowholders to manage
that asset through voting,
• secure a right to any
revenuestreams from the
asset, and
• are tradable ina regulatory
compliantmanner.

32. What’s the Issues?

33. Problems and Challenges
<Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson>
Trusted issuers
• Asset backedtokens needto be based onthe certainty that usingthe tokens in
any future point of the time, the participants can redeem their real-world assets.
Regulatory
Vacuum
• Currentlythere is regulatory vacuum overa big numberof questionsof howwill
this space shall be regulated.
Legal enforceability
ofproperty rights
• The fundamentalquestion is whetherowningtokensconfers ownershipoverthe
correspondingasset.
Digital identity and
KYC/AML
• Digital ID marketplace needs to beintegrated into thetokenizationplatforms
that meet the stringent standards ofbiggest regulatory bodies,such as SEC.
Asset valuations/
rating
• There is a needoftrusted intermediaries and oracles toprovidesuch valuation
and rating data onasset backedtokens.

34. Technology Issues
ü Almost all theAsset tokenization projects’technologyis based on Ethereum Platform.
ü If all the access(use or occupation of the asset) controls are executed throughsmart
contracts, transaction feeissues are remained.
ü For the near real-time transactions off-chaintechnologiesare needed.
ü The functionof access controlhas to be integrated to the IoT(Internet ofThings)
Technology.

35. “The technology is still new and
many legal questions remain unanswered.
But tokenization stands to bring massive opportunities
for growth and diversification to the asset market.
We will see major breakthroughs in this area soon!”
<Source:https://www.linkedin.com/pulse/asset-tokenization-using-blockchain-new-trend-2018-stan-pearson>