Tokenized Real Estate Trading Platform Debuts on Polygon

RealEstate.Exchange (REX) chose Polygon for its low transaction fees, quick settlement times, and robust security features.

The real-world asset (RWA) tokenization platform, DigitShares, is bringing tokenized real estate trading to Polygon with the launch of RealEstate.Exchange, also known as REX.

According to a March 25 announcement, REX is designed to provide retail investors with a compliant platform for fractional property investments in a secondary market, helping to address the industry's current liquidity issues. Secondary RWA trading platforms offer liquid exit options for investors looking to sell their holdings.

The REX platform will launch with two luxury property listings in Miami, Florida, including The Legacy Hotel & Residences, a 529-unit tower managed by the real estate investment platform FraXion, and a 38-unit residential complex managed by Trade Estate.

DigiShares CEO Claus Skaaning shared that REX plans to support "a variety of property types, including residential, commercial, and luxury real estate." Along with the two Miami properties, Skaaning mentioned that REX has "5-6 additional properties in the pipeline."

Polygon's proof-of-stake blockchain was chosen for its low transaction costs, quick settlement times, and strong security, according to the company.

Polygon ranks as the 13th-largest blockchain by 24-hour trading volume, as reported by CoinGecko.

REX operates in the United States under a license through Texture Capital, a registered broker-dealer with the Securities and Exchange Commission. The platform is also part of an EU blockchain sandbox while seeking registration under the Markets in Crypto-Assets (MiCA) and Markets in Financial Instruments Directive (MiFID) regulations.

The announcement also mentioned that REX is pursuing registrations in South Africa and the United Arab Emirates.

REX’s parent company, DigiShares, has facilitated between $100 million and $200 million in tokenized real estate assets since 2018.

DigiShares is one of several companies targeting the tokenized real estate market. In February, Blocksquare introduced a real estate tokenization framework in the EU, enabling property owners to tokenize the economic rights associated with their properties.

The United Arab Emirates has also become a key market for tokenized real estate, with Mantra Finance securing a license to expand its RWA services in Dubai.

The RWA tokenization market, covering real estate, traditional financial assets, art, and intellectual property, has accumulated a total value of $62 billion, based on data from Security Token Market (STM).

The market capitalization of tokenized assets continues to grow. Source: STM

STM data currently tracks 595 real estate tokens, the largest number of active tokens by asset class, although their monetary value is much smaller than that of debt and equity tokens.

Despite being in its early stages, real estate tokenization holds the potential to be worth trillions in the future, according to Mantra co-founder and CEO John Patrick Mullin.

"At this stage, the ecosystem is still quite small compared to where we see it heading in the mid- to long term. It's currently worth tens of billions, but we expect it could eventually grow to trillions of dollars in assets on-chain," he explained.