Empirical evidence on the ownership and liquidity of real estate tokens

Laurens Swinkels*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

15 Citations (Scopus)

Abstract

To better understand the potential and limitations of the tokenization of real asset markets, empirical studies need to examine this radically new organization of financial markets. In our study, we examine the financial and economic consequences of tokenizing 58 residential rental properties in the US, particularly those in Detroit. Tokenization aims at fragmented ownership. We found that the residential properties examined have 254 owners on average. Investors with a greater than USD 5,000 investment in real estate tokens, diversify their real estate ownership across properties within and across the cities. Property ownership changes about once yearly, with more changes for properties on decentralized exchanges. We report that real estate token prices move according to the house price index; hence, investing in real estate tokens provides economic exposure to residential house prices.

Original languageEnglish
Article number45
JournalFinancial Innovation
Volume9
Issue number1
DOIs
Publication statusPublished - Dec 2023

Bibliographical note

Funding Information:
I would like to thank participants of the 4th University of Western Australia Blockchain and Cryptocurrency Conference (November 2021), CryptoAssets and Digital Asset Investment Conference in Rennes (France, April 2022), Economics of Financial Technology Conference in Edinburgh (United Kingdom, May 2022), Inquire Europe seminar in Marseille (France, October 2022), seminar participants of Poznan University of Economics and Business (May 2022), and Will Cong, Raphaël Lapuyade, Frank Onstwedder, Folmer Pietersma, and Hyacinthe Wanham-Henry for valuable discussions.

Publisher Copyright:
© 2023, The Author(s).

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