BlockEstate, the United States based tokenized real estate firm has partnered with the Polymath platform to launch its real estate security token. This also features a partnership with CoinList’s ComplyAPI to raise US$50 million from investors.
The primary goal of BlockEstate is the tokenization of real estate holdings. This will be done through the sales of its security token which represents a fractional ownership of their future real estate portfolio.
While the traditional investing in real estate requires enormous capital and a long period before investment yields, the BlockEstate tokenization benefits are far more significant than the conventional investing method.
This gives more investors opportunities to invest in real estate, with less capital and have the advantage to opt out or in at any moment they like.
BlockEstate has partnered CoinList’s, ComplyAPI, and Polymath to raise US$50 million from accredited investors for the project. BlockEstate stated that it would use predictive analytics to manage and invest the capital in a carefully selected portfolio of the market sector with the goal of maximizing returns.
Meanwhile, BlockEstate has been able to garner the distinctive qualities for this project through its experience in the real estate fund market and also combining it with an aggressive real estate portfolio with the liquidity, security and the essence of the blockchain technology.
How Profits Yields From BlockEstate
BlockEstate raises fund through its security token and invests the raised fund in real estate portfolio. 50% to 100% of the quarterly net profits will be used to buy back and burn tokens. This means that they will repurchase token on the open market and permanently remove them from circulation. This step will lead to the reduction of the supply of tokens which leads to the increase of the value of the remaining token held by investors.
Also, new revenue generating assets will be purchased with the quarterly profits. BlockEstate fund will be building a sort of decentralized governance to aid its token holders to vote on the future of the fund.
BlockEstate Partnership with Polymath
The choice of Polymath by BlockEstate is guided by its intention to use the Polymath’s Security Token Standard Protocol (ST-20), which enables launching their security token (BEAT).
Polymath has legal and regulatory compliance into a protocol that permits a streamlined token sale event which makes it a perfect choice. And the platform is also a leading space in the security token revolution.
Polymath CEO, Trevor Koverko stated that there would be more than $1 trillion of security tokens within the next five years driven by institutional capital.
Real Estate Token and Security Token
The BlockEstate token is one of the first security token issued in real estate. To token holders, this is a form of fund share ownership. The BlockEstate security token, Beat is also planned to be listed on OpenFinance Network (OFN) for trading.
While security token has some advantages such as fractional ownership, a rapid settlement among others, it is different from a cryptocurrency and has its downside.
Security token represents a fractional ownership of a real-world asset when the real world asset becomes destroyed; the security token has no value again.