

The world of finance and technology is evolving very fast and new products and services are on offer from time to time. Blockchain as a breakthrough to the digital industry is revolutionizing the fundamentals of finance and ownership by making the tokenization of real world assets securely possible.
Since the introduction of NFT or Non-Fungible Tokens, the concept has gained lots of attention from people all around the world including investors. NFTs are gaining more popularity as the market becomes mature and deeper by more investors stepping in.
What does a Real World Asset (RWA) mean?
RWA or real world asset refers to all kinds of assets that have a value in the real world. It can be physical assets like a property, a piece of diamond, an artwork or even a barrel of oil. On the other hand a digital or a data-driven asset like a digital photo, a database, a digital video, graphics and a lot more are also considered as real world assets.
As such, regardless of the asset type or its physical presence, all assets in our world that have a value sit under Real World Asset or RWA.
All those assets can be tokenized within a blockchain network and be converted to a fungible or Non-fungible token. Let’s see how the process is done.
The basics of real world asset tokenization
An underlying asset like a piece of diamond can be tokenized within a blockchain network. As an example for your better understanding, assume an investor who wants to buy a piece of diamond for investment purposes. He has technically two options. The traditional way is to go to the physical market, buy a piece of diamond and keep it in a safe box in his bank. Thanks to blockchain technology, there is another way to invest in diamonds by purchasing a tokenized one. For instance LCX is a reputable platform that offers tokenized diamonds called Tiamond. By purchasing Tiamond, which is a diamond-backed token, you will be the owner of a diamond which is certified by Gemological Institute of America, insured by Lloyd’s London and securely stored in a vault in Liechtenstein.
By buying a tokenized diamond, there is no need to worry about the security and safety of your investment as it is stored in a safe place and insured by the most reputable insurance company in the world. How good is that?!
Benefits of the real world asset tokenization
There are many benefits associated with real world asset tokenization. We will take you through the most important ones for your better understanding.
1- Improves liquidity
Blockchain networks are accessible across the globe and open 24/365. Investors from all around the world are capable of trading tokens within the blockchain network with no border or limitation. More investors into the 24/7 market means better liquidity.
2- Brings more transparency
All data and information about a tokenized asset, including history of ownership, transactions, smart contracts, etc. are available across the blockchain and all users are able to see it. The blockchain network is quite transparent, so are all transactions. Hence, the markets for tokenized assets within the blockchain networks are more transparent than traditional markets.
3- Eases the entry for small scale investors
Asset tokenization is a great tool for small scale investors who are interested in investing in expensive assets. With converting a valuable artwork or a piece of diamond to multiple tokens, more investors are able to buy a fraction of a valuable asset. This is the same thing for the real estate sector and how blockchain makes the real estate market more efficient.
4- Creates more security
Tokenized asset ownership is securely stored in the blockchain network. Data in the blockchain due to being decentralized can not be changed, replicated or deteriorated. Even though the security of reputable blockchain networks is reasonably strong, you must be very cautious, as the market is a popular target for cyber criminals.
Asset Tokenization and Homecubes
Homecubes is the leading platform to make fractional property ownership through tokenization possible in the Dubai real estate market. As our first step, we are going through all legal and governmental processes and requirements to make everything legalized and ready for investors to step in with confidence.
Our first commitment is to safeguard our investors money and provide lucrative investment opportunities for people who are interested to invest in the Dubai real estate market.
The future seems to be bright for tokenized properties and we are trying hard to make real estate investment easier for all investors across the globe.