Real Estate Market Fractionalization Through the Power of Web3

The real estate prices continue to rise and the market is thriving but there’s a significant problem — increasing numbers of people are being priced out. The rising housing prices are particularly affecting the younger generations whose hopes of entering the housing market grow smaller each year. Despite this depreciating chance of entry into the market, there is a light at the end of the tunnel — Web3.

Web3 technology offers a secure, transparent and accessible solution that sets out to make real estate investments available to all investors big and small. By improving upon all aspects of real estate market transactions and redefining ownership, Web3 makes it possible to solve the current house price crisis.

House price crisis

House prices have surged over the past decade, rocketing as the result of increased demand, diminishing housing supply, and cripplingly high interest rates upping the cost of living. This combining of these price-increasing factors has turned the possibility of homeownership into an almost impossibility for many.

With a fall in wages, devaluation of capital and the house costs rising, the growing wealth gap between upcoming young investors and modern property owners is only widening. As financial prospects progressively fall for those new to the real estate market, Web3 arrives right on cue to open the door to the young, the old, the poor, and the rich.

Real Estate Fractionalization

When something is fractionalized, it is broken up into smaller and easier-to-manage parts, making the previously inaccessible now accessible. When applied to real estate, fractionalization enables democratized investment opportunities by converting real estate into smaller, affordable shares that individuals to invest in.

Fractionalized real estate makes it possible to enter the real estate market without having to purchase an entire property, instead, it lowers the investment barrier and allows far greater portfolio diversity. By spreading the risk of investments, making real estate investments accessible to younger generations, and fractionalizing property, ambitious investors previously barred from this thriving market can now enter it.

Web3 and Fractionalization

Web3 technology revolves around blockchain technology and decentralization to create the ideal infrastructure for real estate market fractionalization. Of the many benefits Web3 offers the real estate market, there are three fundamental aspects that enables it to truly soar: Security, Transparency, and Ownership.

Security

Built on blockchain technology, Web3 makes the most of self-executing ‘smart contracts’ to carry out contractual terms written directly into transactional code. 

The use of smart contracts ensures that pre-agreed adherence to regulations and specific rules is automatically enforced — assuring security, minimizing risks of fraud and reducing intermediaries. 

Transparency

All transactions on the blockchain are on a public digital ledger and recorded transparently without means of alteration after the transaction is complete. 

This process significantly decreases the chance of malicious actors committing fraudulent actions and ensures all information is immutable — meaning it cannot be changed and all parties see the same transaction data.

Ownership

With secure and transparent transactional data logged immutably on the blockchain, the proof of ownership is publicly visible and recorded. 

When considering fractionalized real estate investments, this proof of ownership ensures investor claims, purchases and sales are easy to verify, carry out and keep secure now and in the future.

MANTRA: Safe Compliant Web3 Innovation

MANTRA, a platform famed for its compliance-driven reputation, offers a fully regulatory-compliant space that bridges traditional finance (TradFi) and the potential of Web3 decentralized finance (DeFi). In collaboration with regulators globally, MANTRA ensures all its products meet the strictest of regulatory requirements to facilitate secure investments for individual and institutional investors.

MANTRA focuses on the the facilitation of DeFI participation through yield-bearing products, tokenized trading of TradFi products like fractionalized real estate, and a decentralized exchange (DEX). Paired with MANTRA’s risk management and compliance protocols, the platform provides a secure and trustworthy space to access all the benefits of DeFi.

Real Estate Tokenization

MANTRA recently announced its significant partnership with MAG, a key real estate developer in the United Arab Emirates (UAE), to tokenize $500 million in real estate assets. The partnership aims to introduce a real estate financing vault built on MANTRA’s blockchain to offer investors yields backed by the security of blockchain technology. The initial product demonstrates the potential of Web3 fractionalized real estate investments with its luxury mega-mansion and MAG-backed corporate credit over-collateralization.

Through this innovation of Web3 technology, fractionalized real estate markets transcend borders, becoming truly decentralized and global — accessible to investors worldwide without boundaries. Through permissionless networks and the security of smart contract technology, transactions on platforms like MANTRA remain fair and safe for all globally.

MANTRA’s products enable investors to access a previously inaccessible market, no matter the size of their portfolio budget, and diversify their investments to better manage risks with improved asset variety. As house prices continue to soar and the cost of living crisis worsens, this Web3 option is making property ownership possible for all — particularly younger generations.

Web3: Solving the Housing Crisis

Web3 technology has opened the door to a range of new investment opportunities through DeFi and TradFi bridging solutions like fractionalized real estate assets. With the security, transparency, and ownership fundamentals it offers, the real estate market is now open to investors no matter their location, the size of their investment portfolio, or their investment budget. 

Firms like MANTRA are making this possible through Web3 innovation, enabling young adults to generate wealth through fractionalized real estate and enter the now-global fractionalized real estate market. 

As a compliant and secure platform for investment products, MANTRA offers accessible real estate on the blockchain. Building from the foundations of Web3, MANTRA eliminates real estate market barriers and sets a new standard for the industry.