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Bricks on Tokens: The Real Progress of Fractional Investment and Liquidity

Dubai, 2025.

9. Bricks on Tokens: The Real Progress of Fractional Investment and Liquidity

An Apartment Sold Out in a Day, 300-Plus Homes Facing Foreclosure

Dubai, 2025. Prypco Mint, a platform designed jointly by the Dubai Land Department (DLD), the Virtual Assets Regulatory Authority, and the central bank, listed its first property. The minimum investment was 2,000 dirhams — roughly $545. The listing sold out in a day. Of the 224 buyers, 70% were investing in Dubai real estate for the first time in their lives. For the price of a few cups of coffee, they held a stake in an apartment in a city many had never set foot in.

Around the same time, in Detroit. RealT, a startup headquartered in Florida, tokenized hundreds of rental homes and sold them to investors worldwide. Its marketing language echoed Dubai’s almost word for word: “Become a US real-estate landlord for the price of a coffee.” But look beneath the surface, and these were aging houses with mold on the walls, leaking roofs, broken HVAC systems. As taxes and water bills went unpaid, more than 300 homes faced foreclosure. The weekly rental distributions that had been coming in quietly stopped. Token holders were left holding numbers on a screen, watching a bankruptcy proceeding unfold on the other side of the planet.

Same technology, same promise, opposite endings. This contrast frames the question running through this entire chapter. Real-estate tokenization has been promising a “revolution” for five years running — so what actually drove the two outcomes apart? It wasn’t the blockchain.

What the 0.1% Tells Us

Start with the scale, coldly. The global real-estate market is valued at roughly $393 trillion (Savills, 2024). Actual tokenized real-estate assets trading on-chain, by contrast, land somewhere between the low hundreds of millions and a few billion dollars, depending on how you measure.1 Whichever estimate you pick, the conclusion is the same: it hasn’t even filled 0.1% of global real estate.

What makes this number striking is the gap against the forecasts the consulting industry put out. One global consultancy pegged the 2023 market at $119 billion and projected it would reach $3 trillion by 2030 (a 60% compound annual growth rate). Another consultancy, around the same time, put out a similarly rosy figure: $3.2 trillion by 2030 (a 49% CAGR).2 Both firms carry big names. Yet measured against something close to actual figures today, the gap runs over a hundredfold. It’s a meta-level case study in how the genre of “future market forecast” gets inflated, and how uncritically the press and industry keep recycling those numbers.

The contrast sharpens when set against the appraisal AI covered in Chapter 1 and the data-center boom covered in Chapters 4 through 6. AVMs actually seeped into the market while lowering their error rates, and data centers pushed hyperscalers’ annual capital expenditure up by hundreds of billions of dollars in five years. Tokenization, by contrast, spent five years with the gap between “promise” and “actual measurement” stubbornly unclosed. Why has real-estate tokenization alone been this slow?

What Blockchain Did, and Didn’t, Do

The first misconception that needs correcting: people hearing “tokenization” tend to imagine blockchain redefining the very concept of real-estate ownership. That’s actually how the early discourse ran, from 2017 to 2021 — a utopian picture of a decentralized ledger replacing the land registry, and anyone anywhere buying and selling a stake in a building via a single smart contract, with no middleman.

Five years on, what actually happened was far more modest. Legal title still sits with a special-purpose company (SPC) or a trust. The token is merely a security representing a share in it. In other words, the substance of tokenization wasn’t a new ownership regime — it was blockchain layered on top of the fractional-investment and crowdfunding structures that already existed, as a payment-and-record layer. Platforms like Fundrise in the US or Kasa and Funble in Korea simply put on a “token” costume; “decentralization” wasn’t reborn.

An analogy makes this redefinition clearer. Fractional investment itself is an old idea. The REIT, which emerged in the US in the 1960s, was ultimately the same concept: slice a large building into pieces small investors could afford. What blockchain added was recording that stake as a “digital token” rather than a “paper certificate,” and, in theory, the ability to transfer that token across borders faster. It didn’t change the mode of ownership — it changed the ledger that records ownership. If you see this as a change on the same layer as the ledger moving from paper to Excel and from Excel to a cloud database, it becomes easy to see why the rhetoric of “revolution” was overblown.

The Collapse of the Liquidity Myth

Tokenization’s strongest selling point was liquidity: “slice a property into 10,000 tokens and it becomes an asset you can trade around the clock, like a stock.” The pitch was to use technology to solve real estate’s old weakness — once you buy, you’re locked in for years, and even when you want to sell, it can take months to find a buyer.

But as of 2025–2026, most real-estate tokens trade only within their issuing platform. An independent secondary market outside the platform essentially doesn’t exist.3 Viewed coolly, this is the obvious outcome. Slicing a building into 10,000 tokens doesn’t automatically produce 10,000 buyers willing to purchase them. Liquidity isn’t manufactured by code — it arises only when buyers and sellers both exist at the same time. A stock exchange is liquid not because of its technology but because of the sheer number of people trading on it. The real-estate token market hasn’t yet reached that critical mass.

Here, an old insight turns out, unexpectedly, to still hold: real estate is inherently a low-liquidity asset, and that illiquidity is precisely why it carries a different risk-return profile than stocks and bonds. Tokenization only repackaged that illiquidity — it didn’t fundamentally erase it. That liquidity is made by trust and trading volume, not technology, is an utterly obvious fact that spent five years hidden behind marketing copy, before being reconfirmed at considerable cost.

Regulation: From Obstacle to Infrastructure

The real variable that separated Dubai from Detroit shows up here. Early tokenization projects treated regulation as an obstacle to route around. Selling what was effectively a security under the label of a “utility token” was a common maneuver. But the trend after 2023 moved in the opposite direction.

The Monetary Authority of Singapore (MAS) ran tokenization experiments with banks and asset managers through Project Guardian, launched in 2022, and moved it into a commercialization phase in 2024.4 Dubai’s Prypco Mint was a project where the Land Department, the Virtual Assets Regulatory Authority, and the central bank all participated together from the design stage. The US Securities and Exchange Commission (SEC) also issued classification guidelines for tokenized securities in early 2026.5 The common thread is clear: only projects where regulators sat at the design table from the start earned trust and survived. Platforms that rushed to market ahead of regulation ended up losing trust instead.

Korea’s experience shows the other face of this dilemma. Kasa Korea, widely regarded as Korea’s first real-estate fractional-investment platform, survived several years while the government signaled it would institutionalize a security-token (STO) regime and put the market in order. But it shut down in 2026, right before that system took effect.6 After two consecutive years of losses in the tens of billions of won, waiting for regulation to be finished, its funding ran dry just short of the finish line of legalization. Funble, which pioneered the fractional-investment market alongside it, closed around the same time.7 Late regulation kills a market; waiting for regulation piles up operating costs that also kill it. Several first-generation platforms across Europe and Asia hit some version of this double trap.

Dubai’s different outcome wasn’t due to superior technology. It was because the regulator built the skeleton of trust before the product ever launched. That regulation is not innovation’s enemy but the essential infrastructure that manufactures liquidity and trust has become industry common sense over these five years.

Institutional Money Chose Bonds Before Real Estate

Another clue comes from looking at which tokenized assets actually attracted large sums of money over these five years. It wasn’t residential fractional real estate — it was Treasury bonds, money market funds (MMFs), and tokenized private funds. BlackRock’s tokenized fund, BUIDL, is the standout example.8 Real estate was relatively pushed to the back of the line.

The reason lies in the nature of the asset itself. First, valuation is hard. As covered in Chapter 1, even AVMs show wide error rates on assets with sparse data. Second, physical management responsibilities follow. Issuing a token doesn’t stop tenants’ phone calls or fix a leaking roof on its own. Third, registration and title-transfer procedures differ from country to country, making standardization difficult. Bonds and funds were already electronic, standardized financial products that only needed a token costume; real estate, by contrast, was an analog world entangled with land registries, brokers, management companies, and tax authorities from the start. It confirms a strikingly simple ordering rule — “the assets that are easy to tokenize get tokenized first” — and real estate stood at the very back of that line.

The Threshold Dropped; a New Asset Class Wasn’t Born

None of this means tokenization spent five years with nothing to show for it. As Dubai’s Prypco Mint case shows, it has genuinely lowered the entry barrier for small investors. Being able to access a stake in a prime property for roughly $545, with more than half of that first cohort investing in real estate for the first time — that’s not a trivial outcome.

But calling this “the birth of a new asset class” is an overstatement. More precisely, it’s a further lowering of the minimum-investment threshold on existing REIT and fractional-investment products. The most honest conclusion these five years of experimentation leave us with is that tokenization’s real effect narrowed down not to “decentralizing” ownership, but to “lowering the threshold” for access.

Boring, But Essential

As of 2026, industry insiders’ self-assessments have turned interestingly humble. One tokenization-platform founder put it this way: “We thought about what we could put on the blockchain before we asked what investors actually wanted.”9

What the industry learned over five years wasn’t smart-contract code. It was frameworks for safely transferring legal title, services for collecting and distributing rent, trustworthy secondary-market makers — unglamorous financial infrastructure without which nothing runs. The belated realization: the bottleneck wasn’t the technology; it was the “boring” institutions and services wrapped around that technology.

This is a pattern the whole book keeps running into. In Chapter 1, AVMs were only accurate in data-rich markets. In Chapter 8, iBuying collapsed by conflating “an accurate price tag” with “actual liquidity to buy and sell.” Tokenization, too, conflated “the technology to slice up ownership” with “the trust, demand, and infrastructure to sell that slice.” All three stories repeat the same lesson in their own way: technology solves only half the problem. The other half is always down to people and institutions.

The Next Five Years: How Far Will the Progress Go?

So how will the next five years unfold? Projects where regulators are involved from the design stage — the Singapore and Dubai models — are expected to keep growing cautiously but steadily. First-generation platforms that try to outrun regulation are likely to keep falling by the wayside. Institutional capital will likely stay parked, for now, in tokenizing easy-to-standardize assets like bonds and funds. Real estate may gradually widen its progress starting with large commercial assets — offices, logistics centers — where ownership is already organized through SPCs and thus relatively easier to tokenize.

No one can say for certain how long it will take global real estate’s 0.1% to become 1%. But one thing seems clear: what determines that pace won’t be next-generation blockchain technology. It will be how quickly the next generation of regulators, land registries, and management companies is ready to trust this new way of keeping the books.

Rule of the Game: Technology Cuts the Slice, Trust Sets the Price

No matter how finely you slice real estate, liquidity doesn’t appear unless someone is there to buy the slice. What tokenization learned in five years wasn’t how to divide ownership — it was how to make the world trust that divided ownership. Even once the technology is ready, the game is still decided on the trust of people and institutions.

Sources

Footnotes

  1. Global real-estate market value (roughly $393 trillion) versus actual on-chain tokenized-asset value (estimates vary widely) — Savills, “The Total Value of Global Real Estate” (2024); Real Estate Tokenization Market Size & Global Forecast 2026, Nadcab; “Why Tokenized Real Estate Still Hasn’t Taken Off,” Forbes (May 26, 2026). ↩

  2. 2030 market forecasts ($3 trillion vs. $3.2 trillion) — Roland Berger/BCG-affiliated forecast reports, cited via Chainbull. ↩

  3. Concentration of trading within issuing platforms, absence of an independent secondary market — “The Fractionalization Fallacy: Why Real Estate Tokenization Is Failing Its Own Promise,” Medium; “Real Estate Tokenization Challenges in 2025,” Tokenizer. estate. ↩

  4. Singapore’s MAS Project Guardian (launched 2022, moved to commercialization in 2024) — “MAS Announces Plans to Support Commercialisation of Asset Tokenisation,” Monetary Authority of Singapore (2024). ↩

  5. US SEC’s 2026 classification guidelines for tokenized securities — “Real Estate Tokenization In 2025: SEC Rules,” Primior Group. ↩

  6. Kasa Korea shutting down just before the STO regime took effect — “[Exclusive] Kasa Korea shuts down before STO takes effect, following Funble,” Seoul Economic Daily; “Kasa Korea to Shut Down Before STO Rules Take Effect,” Seoul Economic Daily. ↩

  7. Funble’s shutdown and the state of Korea’s domestic STO market — “Understanding Fractional Investment and the STO Market Outlook,” Samil PwC Institute of Management; “Status and Implications of Domestic Security Token Offerings (STO),” Korea Capital Market Institute. ↩

  8. Tokenized Treasuries, MMFs, and private funds growing ahead of real estate — “Real Estate Tokenization Challenges in 2025,” Tokenizer. estate. ↩

  9. Dubai Prypco Mint’s first project selling out, 70% of 224 investors first-timers — “DLD launches the MENA’s first tokenized real estate project through ‘Prypco Mint’,” Dubai Land Department; “Invest in Dubai property from Dh2,000,” Khaleej Times; Detroit’s RealT rental-payment suspension and foreclosures — “Blockchain Slumlord Startup Implodes in Real Time,” Futurism; industry insider self-assessment — “Real Estate Tokenization Challenges in 2025,” Tokenizer. estate. ↩

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