Tokenization Firm To Put $66 Million Building On The Ethereum Blockchain
Digital marketplace and tokenization firm Inveniam Capital Partners (ICP) will soon put a $66 million building on the Ethereum blockchain, the company announced on Tuesday.
Tokenization of assets has picked up momentum in the last one year, with various firms looking to leverage blockchain technology to offer investors access to tokenized shares of artwork, real estate, among other items.
In what could constitute the largest real estate tokenization to date, the ICP team has announced that it will sell tokenized shares totaling $260 million. The shares will take in four projects in real estate as well as in debt transactions.
According to the firm, the first to be tokenized will be a Miami, Florida building valued at about $65.5 million.
The firm reportedly paid an unspecified amount of Bitcoin (BTC) as a deposit for the building in January, and will soon begin selling ERC-20 tokens on the Ethereum blockchain for investors who wish to purchase a piece of the building.
As with the Miami property, shares in the other three deals will also be put on the Ethereum blockchain, with the selling being done via what is called the Dutch auction.
The auction means that interested parties will place bids that specify the amount of shares they wish to purchase, the price they are willing to pay for each share, and the cryptocurrency they want to use to pay for the shares.
Inveniam has explained that it would be accepting crypto payments made in any of the top 50 digital assets by market cap. At the end of the sale, the token distribution will follow starting from the highest bidders to the lowest.
Per a press release outlining the sale, “the price that every bidder pays will be based on the lowest price of the last successful bid,” and that this will “dependent upon the bidder’s fiat-to-crypto conversion rate limit.”
Although the tokenization process introduces the much-needed transparency necessary for such a sale to succeed, Inveniam has set some guidelines that participants must fulfill.
For instance, a potential buyer’s crypto holdings must be $10 million at the least, with the investor’s minimum purchase pegged at $500,000.
The firm has added that the process of selling the tokens will follow the private placement rules set by the U.S. Securities and Exchange Commission (SEC).
Apart from having the assets’ shares represented on the blockchain, ICP has revealed an ambitious plan that will see it put massive amounts of data associated with each token on its platform.
The firm’s CEO Patrick O’Meara explained:
“We built our entire software, our stack, everything we do; the way we tokenize the instrument is so the enormous amount of data that’s associated with the financial instrument … can be aggregated and is attached to the token.”
O’Meara added that doing so makes the data “uniquely searchable,” as the system will store legal and other related documents in their native form and not as is the current situation where these documents are converted into PDFs.
According to him, this gives the system transparency, allowing regulators to use a transaction hash and the cipher to trace “every document associated with this transaction.”
Also noteworthy is that it allows investors to make informed decisions based on all the data stored.
The other properties to be tokenized include a $90 million student housing facility located in North Dakota; a water pipeline in the same state valued at $50 million; and a Florida family housing facility worth $75 million.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.