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Now Liquidity is Possible in Real Estate Investing – CryptoMode

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Now Liquidity is Possible in Real Estate Investing – CryptoMode
CryptoMode FraXion

Would you lend $500 to someone who would pay you back $750 in one month, or $500 to a friend who would pay you back $1,500 in three years? Many investors prefer the former, but both cases offer advantages. In investing, this example can be used to compare liquid and illiquid assets.

Liquid assets can be converted into cash at reasonable prices in a short time. Liquid assets are also “cash-like” and may include cash alternatives that have a lower risk of loss (regardless of how long they are held), such as a certificate of deposit (CD), money market account (MMA), a money market fund (MMF) or US Treasuries. Liquidity gives investors flexibility and reduces potential risk by allowing them to generate a return while still having the cash on hand when needed.

On the other hand, illiquid assets cannot be converted into cash in a short time without loss of value. These include venture capital, infrastructure financing, private placement loan issuances and real estate. Selling illiquid assets takes time. Nevertheless, there is the possibility of higher returns over time and opportunities for diversification.

Real estate is the most illiquid asset because it meets the definition exactly. But now this concept is obsolete, as real estate assets can change hands faster than ever imagined. FraXion is a blockchain-based tokenized platform where anyone can invest and partner with real estate giants from the United States. Beyond that, people and entities can sell their share as a token at any time (with some exceptions).

Through strategic alliances and partnerships with some of the most successful real estate developers in the United States, holders of FraXion tokens can invest in income-generating properties and land suitable for rapid commercial development.

Significant supply and demand for an asset is necessary for higher levels of liquidity. Location, transaction costs, local market dynamics and conditions, availability of capital and zoning are the main factors that determine the level of liquidity of real estate.

FraXion is a non-traditional real estate investment platform that will allow small entities and individuals (not just institutions) to access prestigious real estate development projects, in collaboration with huge development groups and some of the most institutional partners. most recognized in the world. When illiquid real estate investments are converted into tokens, direct real estate investments acquire the characteristics of indirect investments. Therefore, the issuers concerned can obtain greater liquidity.

FraXion introduces an innovative real estate investment vehicle that will diversify investment portfolios and assure users that every dollar invested is backed by tangible real estate, fostering investor confidence.

Liquidity achieved through strengthened investment pools

A larger pool of investors improves liquidity by making real estate assets accessible to a much wider audience. Tokenization can help create a larger investment pool in several ways:

Globalization: Real estate tokenization expands the pool of investors by providing global access to assets. You can participate in symbolic real estate projects from anywhere in the world if you have an Internet connection and the necessary capital (not like in the traditional real estate sector).

Tokenization is becoming increasingly popular. According to the DigiShares industry report, there were only 5 security token offerings (STOs) in 2017, but two years later, the number of STOs increased significantly to 55. According to the same report, this figure is expected to rise at a compound rate of 59%, helping to skyrocket the STO’s market valuation.

Asset-backed security tokens (ABST), like tokens representing real estate assets (the largest asset class in the world), are expected to be the main driver of this growth. According to existing forecasts, by 2030, the ABST market will be worth around $2,000,000.

Reduced entry cost: FraXion Tokenization enables fractional real estate ownership, which expands the investment pool by lowering the barrier to entry. It allows small businesses and individuals to invest in larger, better performing real estate assets.

Real estate transactions can be complex, expensive and time-consuming. As a result, they are subject to an illiquidity discount, which reduces the sale price. Tokenization tends to counteract this by increasing liquidity while simplifying transactions at lower cost. It allows to buy and sell tokens directly on the blockchain without having to sign documents or pay high commissions to intermediaries.

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None of the information on this website is investment or financial advice. CryptoMode is not responsible for any financial losses incurred while acting on the information provided on this website by its authors or customers. No advice should be taken at face value, always do your research before making financial commitments.

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