Source: Blockchain Knights
According to Deloitte, by 2035, tokenized real estate could account for 10% of the global market and be worth more than $4 trillion, with the industry growing at an annual rate of 27%.
The following is a guest post and opinion piece by Abdul Rafay Gadit, co-founder of ZIGChain.
The US real estate market alone is worth more than $100 trillion, while the global real estate market is worth more than $700 trillion. However, for an asset that is so closely tied to the land beneath our feet, liquidity is alarmingly low. According to a World Economic Forum report, illiquidity in the real estate market results in transaction costs of 1% to 3% of the property value, which translates into tens of billions of dollars per year. More importantly, this lack of liquidity creates artificial barriers for both buyers and sellers: it prevents homeowners and most potential investors from exchanging value, and it prevents the capital markets for crypto assets, which are valued at over $1 trillion, from accessing the most trusted asset class in human history.
A Quick Definition of Real World Assets (RWAs)
In 2015, Ethereum pioneered the concept of asset tokenization, allowing nearly any asset to be split into tradable digital shares. Recently, the cost of tokenization on many blockchains has been significantly reduced to almost zero. RWA is a broad concept that, depending on one’s understanding, covers nearly all tokenized assets that are not native crypto assets.
“Soft” RWAs include stablecoins and tokenized equity. “Hard” RWAs are tokenized versions of physical assets, such as real estate, vehicles, or precious metals. While there have been some high-profile RWA examples in real estate, such as the $18 million tokenized offering of a portion of the St. Regis Aspen resort, the real turning point will come in the relatively obscure global middle-class real estate market.
How RWAs Will Transform the Real Estate Market
In the past, RWAs have been limited by a lack of liquidity. For real estate RWAs to succeed, liquidity must flow both ways. This requires both widespread availability of tokenized real estate and carefully designed incentives by networked teams to attract existing capital to these assets.
Slicing large asset-backed debt into smaller pieces allows retail investors to participate in any amount, thereby expanding the potential liquidity pool. However, viability is not the same as success. RWA builders must strategically attract both institutional and retail liquidity to avoid market failure.
We are witnessing the early stages of a network effect. With each additional tokenized property, the utility of the entire ecosystem increases, attracting more investors, which in turn attracts more homeowners to tokenize.
The critical mass required for this virtuous cycle is accelerating faster than many industry veterans expected. Projects that successfully combine traditional real estate expertise with blockchain infrastructure are likely to become future market leaders.
Propchain is an example of a company that tokenizes fractional shares of real estate. Propchain and other similar companies offer annualized returns with shorter lock-up periods than traditional real estate investments. There are also localized options like KiiChain, which is focused on unlocking the potential of RWAs in Latin America.
The power of tokenized real estate is not only to optimize existing processes, but to fundamentally reshape what real estate ownership and investment means in the digital age.
The transformative power of tokenization is reflected in the capabilities it enables:
Fears about real estate RWAs are overblown
Given the 2008 financial crisis, it is understandable that people are skeptical of real estate tokenization. However, tokenization actually does the opposite of what caused that crash. While the 2008 crisis combined risky mortgages into abstract, “de-risked” units, tokenization reduces abstraction by breaking up single instruments into smaller, more transparent parts.
Tokenization does not eliminate asset risk, nor does it claim to do so. It simply increases liquidity and allows more people to participate in the wealth-building potential of real estate. By enabling more people to participate in leveraged, stable assets, tokenization solves the twin challenges of housing affordability and investment opportunity.
Conclusion: The Tokenization Revolution Is Inevitable
The real estate market is at a crossroads. Those who cling to the traditional model will gradually find themselves surpassed and replaced by tokenized alternatives. RWAs are more than just a technological upgrade, they are a fundamental restructuring of how the $700 trillion “sleeping giant” is valued, traded, and leveraged.
For investors, the message is clear: adapt or be left behind. As regulatory frameworks mature and institutional adoption accelerates, the first-mover advantage window is closing rapidly. By 2030, we will look back at non-tokenized real estate assets as relics of an inefficient past, just as we look at paper stock certificates today.
This liquidity revolution will not only change the way we trade real estate, it will also make the world's most durable store of value more accessible, potentially freeing up trillions of dollars of otherwise frozen capital. In a world of increasing financial volatility, tokenized real estate offers the perfect combination of stability and accessibility that traditional and Crypto asset investors alike are desperately seeking.
The question is no longer whether real estate will embrace RWAs, but who will lead the charge and who will have to explain to shareholders why they missed out on the revolution.
Anais
Weatherly
Alex