Israeli ECO BTC
“The best place to found is the United States, but Israel is right behind it,” former Google CEO Eric Schmidt said in 2016. Many of the innovations coming from the Middle Eastern country are focused on the tech sector. For example, the first Motorola mobile phone, the first USB stick, and the first commercial firewall were developed in Israel.
In recent years, startups in the fields of fintech, enterprise IT, and data infrastructure and security technologies (especially in the field of cybersecurity) have received funding in the small Mediterranean country. This group also includes the start-up of Yael Tamar and Yuval Wirzberger. The two founded SolidBlock in 2018. Their company is “on the corner of fintech and proptech and our real estate tokenization relies heavily on blockchain.” BTC-ECHO visited Silicon Valley in the Middle East to hear what that means. In conversation: Yael Tamar, CEO of SolidBlock.
BTC-ECHO: What is your motivation to introduce blockchain technology in the real estate industry?
Yael Tamar: At SolidBlock, we work to democratize real estate investment. Banks and other traditional lending institutions have made it more difficult than ever for young buyers to acquire property. Without viable alternatives, millennials have been dissuaded from the dream of owning real estate. At the same time, given the high inflation and the decrease in the real estate supply, the symbolic properties once again become an attractive alternative. Our work is not changing the real estate market. We are changing the way ownership is determined.
We do this by aligning the capital raising process with the needs and expectations of homeowners. Therefore, tokenization can reverse the downward trend in supply. Additionally, it will change the way homeowners raise capital, making real estate investment accessible beyond the heavy iron gates of large financial institutions.
However, it should be noted that regulation remains a challenge. Fortunately, things are changing. Nothing is final yet and it remains to be seen how the final provisions will ultimately pan out. But since things can’t get any more restrictive, any progress is good news for tokenization.
BTC-ECHO: Could you explain what the tokenization process is like?
Real estate tokenization is a new trend that represents the convergence of real estate investment and blockchain technology. Tokenization helps asset or fund owners raise capital more efficiently and offers investors unprecedented access to private real estate investments, transparency and liquidity.
Tokenization is a relatively new term used to describe a cryptocurrency fundraiser in which investors exchange fiat or cryptocurrencies for “tokens.” In short, tokenization is a way of securitizing real assets.
Securitizing an asset means dividing it into shares that can be sold to investors. To “tokenize” an asset means to divide it into shares or “tokens”, which represent a predefined portion of the underlying asset. Therefore, they are often referred to as “security tokens”. These tokens are protected by the immutability of blockchain technology and can be traded via crypto exchanges or Alternative Trading Systems (ATS) if desired. At the same time, smart contracts help secure and automate the process.
Now, when an owner decides to tokenize a property, an Ethereum Standard (ERC20) property token (also called a security token) is created, which represents shares in the property. The total value of all tokens corresponds to the total value of the securitized asset. In general, the tokenization process can take several months. The time period depends on how many of the required documents the owner already has.
SolidBlock’s role is to provide the means by which tokenization occurs. Furthermore, the respective project is advertised on our digital marketing platform as a house or a plant. In short: we are basically a one-stop platform for wealth owners.
BTC-ECHO: What do you think, will there ever be a (legal) global platform for tokenized real estate trading?
Well, SolidBlock is working to create a completely decentralized global real estate platform that we call SolidBlock Ecosystem. It will democratize access and provide better access to the liquidity needs of both owners and investors. Our timeline initially sees an Initial Coin Offering of SolidToken later this year.
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