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Manhattan Apartment Tokenized on Ethereum Blockchain

A USD 30 million apartment complex in the East Village of Manhattan, the center of New York City, has been tokenized on the Ethereum blockchain. This is the first major asset to be cryptographically tokenized on a blockchain in Manhattan’s history, and was made possible through a partnership between Propellr and Fluidity, two companies that facilitate compliant digital securities trading.

Smart contract technology on the Ethereum blockchain allows a non-fungible token to be created for any physical or digital asset. The difference between a non-fungible token and a fungible token is a fungible token like Bitcoin can be interchanged with other Bitcoins, while non-fungible tokens are each completely unique. Perhaps the most popular use of non-fungible tokens so far has been CryptoKitties, a game where people breed cats and trade them for Ether. The tokenization of this apartment complex in Manhattan proves the true potential of non-fungible tokens though. Instead of something simple and relatively cheap like digital cats, people can now buy and sell non-fungible tokens representing multi-million dollar apartments in New York City.

Now that the apartments in this Manhattan complex are tokenized, they can be bought and sold without the help of banks. The smart contracts and associated legal paperwork allow the owners of the tokens to trade the apartments however they wish. Further, the tokens representing the apartments are cryptographically secure, and can’t be hacked by even the most powerful supercomputer. These tokens can be sent anywhere in the world instantly. Thus, the tokenization of these New York City apartments allows them to be traded instantly in a completely secure manner and cuts out the fees associated with using banks.

Ryan Serhant, the real estate broker listed on this deal, said, “The market in New York is always strong, but it can take some time to sell for the right price in a new construction building. With blockchain tokenization, we can remove the unruly pressure of traditional bank financing, which is much healthier for the project and all of the stakeholders. Tokenization is paving the way for a new forefront in real estate development.”

The CEO of Fluidity, Todd Lippiatt, said, “Traditional securities structures and issuance frameworks haven’t evolved in a long time. With blockchain technology, a transparent and trustless ecosystem can start to solve the information asymmetry that hinders the market’s potential for liquidity. This asset, structure, sponsor, and sales team showcase this evolution. With proper discipline and respect, the future is bright for tokenized securities.”

Perhaps the tokenization of this Manhattan apartment complex is the first taste of a future where real estate deals worldwide are conducted instantly and securely using blockchains.

 

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