MountX tokenized two apartments in Mexico on the Tezos blockchain, using token issuance platform Vertalo. This is the first STO launched in a series of 15+ STO projects. These projects will materialize in 2020 - 2021 and will contain assets in Mexico and Canada.
“MountX is leading by example by advancing the use of digital asset technology to serve the North and Latin American real estate technology industry. Key to this effort is cost control. If tokenization is going to work for lower-priced assets, it’s critical to leverage a chain such as Tezos where unpredictable fees and high gas costs don’t diminish investor gains at times of secondary trading. We are excited and grateful to have the opportunity to implement revolutionary and capital efficient technology and techniques on an international stage with such a great team, led by Enrique Suarez, MountX’s Co-Founder and CEO.” - Dave Hendricks, Founder and CEO of Vertalo
STO is short for Security Token Offering. STO's are tokenized assets. This means that value of the asset, is represented by tokens that are registered on a blockchain. These Tokens are classified as a "Security", which are assets that are strictly regulated.
Assets that can be tokenized in STO's are regulated assets that have the potential to produce income. Some examples are: Commodities, business debts, -loans or -credit, royalty agreements, investment contracts, real estate, etc.
To tokenize a piece of real estate, you take the actual value (lets say 1 million dollars) and divide the value into tokens. For example 100.000 tokens of 10 dollar. The amount of tokens is fixated on chain, and from the moment the STO is launched, the tokens can be traded. If demand rises, so does the value of the tokens. If demand drops, so does the value of the token. People buying the tokens will have to do some research on the property and compare prices with other properties in the area, just like anyone would do for any investment in real estate.
Don't expect the value swings you see in cryptocurrencies. STO value will probably follow the same trend as its real world counterparts. What makes STO's interesting is the fact that these investments are relatively safe, but generate income in the form of a yearly yield. (Like rental income in real estate.)
What makes STO's revolutionizing, is the fact that in traditional real estate investments, not just everyone can participate due to the fact that traditionally, you can't buy small pieces of real estate. So people with limited funds can't commonly invest in real estate. Which is a pity, since it is considered to be quite a safe investment. And as mentioned, real estate is being rented, which provides passive income. This income will be distributed to STO holders. So for people with some long-term savings this mght be an option. Banks give no interest over your savings. A well picked real estate STO might be a great alternative. And in the form of STO, it is a lot more accessible since people with smaller budgets to invest, can now take part in the real estate market too. Investments can start somewhere in the range of $100 to $250.
Latest STO announcements on Tezos:
- tZERO and Tynton Capital announced to tokenize $300 million worth of STO's on Tezos
- DealBox will launch a $25 mill STO on Tezos for Total Network Service (TNS) this November
- Official: STO "Aspen Coin", which is tokenized on Tezos, will be trading on tZERO next week
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