The Good Tech Companies - Tokenized Real Estate is Great for Investors, but Even Better for DeFi

Episode Date: June 3, 2025

This story was originally published on HackerNoon at: https://hackernoon.com/tokenized-real-estate-is-great-for-investors-but-even-better-for-defi. Tokenized real estate is a goldmine for investors and brings stability to DeFi Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #defi, #real-estate, #tokenization, #tokenization-of-rwas, #real-estate-tokenization, #real-world-asset-tokenization, #defi-lending, #good-company, and more. This story was written by: @contactraac. Learn more about this writer by checking @contactraac's about page, and for more stories, please visit hackernoon.com. Tokenized real estate is a massive, underrated asset class. It's barely recognized as a sector, but tokenized real estate is a goldmine for investors. It could turn a speculative playground into a financial powerhouse.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. Tokenized real estate is great for investors, but even better for DeFi, by Kevin Rusher. Crypto's a wild beast, Bitcoin rockets, altcoins crash, and decentralized finance, DeFi, protocols chase yield in a market that swings like a pendulum. But tokenized real estate, a massive, underrated asset class, is poised to change the game. While barely recognized as a sector, tokenized real estate is a gold mine for investors. And for DeFi, it is the missing piece of a puzzle that could turn a speculative playground into a financial powerhouse. Let's break it down, the scale is mind-boggling. Expert analysts expect global real estate to reach a staggering $654.39

trillion this year, five times global GDP, which was $108 trillion last year and is expected to grow to 2% this year. Right now, tokenized real estate is barely a blip, it's just $300 billion with a compound annual growth rate, CAGR, of 27% yet Deloitte predicts it could sorto $4 trillion by 2035. This remains a fraction of worldwide real estate, yet a Talready has Wall Street buzzing, BlackRock running pilots, Goldman Sachs sniffing around. Bringing stability to defy, the hype is real, and it's because investors can now get involved in the real estate asset class for as little as $100, while institutions see a new way to diversify without gatekeepers. But DeFi is where this asset class will rewrite the rules. Despite market downturns, DeFi has grown and offers unlimited access and unrevalued innovation. Indeed, DeFi is emerging as a transformative alternative to TradFi and promises to overhaul traditional financial systems by reducing settlement friction,

enhancing transparency, and promoting financial inclusion on a global scale. Tokenized real-world assets, RWAs, are helping to revolutionize DeFi as well. This sector has enjoyed runaway success this year, with RWA assets indifiswelling from just under $4 billion in May 2024 to close to $12 billion in May 2025. However, this has been almost entirely led by US treasuries and money market funds, with BlackRock's BUIDL leading the pack. In short, the sector is ripe for diversification, and tokenized real estate is a prime candidate. Reliable, regular returns, property is the ultimate real-world asset, bricks and mortar, rental checks, and steady value.

Picture a tokenized office building in Miami or a residential development in Singapore. These churn out predictable income, which is a vital component that is missing in the volatile crypto world. Plug that into DeFi. And now platforms have collateral that doesn't buckle when crypto's in a downturn. Early property tokenization platforms yield 6% to 8%, with no defaults. DeFi's been missing this kind of backbone, which ties the world's largest asset class, real estate, to decentralized finance protocols that can offer so much more in terms of yield and reinvestment opportunities. Imagine a lending platform where users stake real estate tokens representing a slice of

a Chicago high-rise. Smart contracts handle the rental cash flow, paying loan interest and yield to stakers. Due to the property's stability, these tokens are far less likely to tumble as sharply as more volatile crypto assets can, which significantly reduces liquidation risks. This allows DeFi protocols to offer sustainable, reliable lending and borrowing rates for both crypto natives and institutions. Some DeFi RWA funds are barely scratching the surface of what's possible. Erlihu's cases of real-world asset tokens indicate that DeFi protocols use them for

stable collateral. Bridging the gap between TradFi and DeFi through these digital assets brings more consistent cash flows and bigger liquidity pools, providing more predictable and stable yields than other, more volatile crypto sets. Incorporating these tangible assets into the ecosystem represents an evolution in DeFi, one that positions it as a rival to the limited solutions available in traditional finance. Making the illiquid, liquid, beyond stability, tokenization unlocks a new level of liquidity. Investing directly in the type of real estate that tokenization offers,

which is typically large-scale rental units, is typically unavailable to the average investor. Tokenization circumvents that, a property can be split into thousands of tokens and traded 24-7 on a blockchain. No middleman, no huge capital investment, investors can buy into a Dubai condo development for $100. This is massive for retail players, but for DeFi, it's a much bigger leap. These tokens can swell liquidity pools, back-yield strategies, or support loans, planting real estate's ironclad value into decentralized systems. That's not tinkering, it's a huge leap for how DeFi works. More than this, real estate tokens also have the potential to power decentralized derivatives, or options tied to property values,

letting usershedge without crypto's volatility. This could enable insurance pools backed by these tokens, covering storm damage or unpaid tenants, all on chain. Beyond finance, there is governance. Token holders could vote on property upgrades, like fixing a Dallas apartment block, thereby creating decentralized, democratized versions of stuffy condo boards. These aren't pipe dreams. Several tokenized platforms already underscore underscore drive underscore underscore six to eight percent yields, proving the potential. This is DeFi tapping the world's most valuable asset to redefine finance.

Property must become a priority. Ultimately, DeFi builders must make real estate a priority, not an afterthought. Yields of 6 to 8 percent, steady as a rock, show what's possible. But the ecosystem needs to catch up. Builders should design yield strategies for real estate's profile. Long-term growth and steady, reliable rental income. If DeFi gets tokenized real estate right, it could be a revolution. Retail investors can tap into the global real estate market without gatekeepers, while institutions get a blockchain-native way to diversify and borrow.

Meanwhile, DeFi grows into a system rivaling TradFi, but open and universally accessible. What must be avoided is centralized entities locking real estate onto private chains, reducing liquidity for everyone. If DeFi is to scale beyond its current limits, it must embrace the world's most valuable asset class, and protocols must evolve. If they do, the next billion-dollar crypto wave won't be spurred by a meancoin, but by real estate on chain. Thank you for listening to this Hacker Noon story, read by Artificial Intelligence. Visit HackerNoon.com to read, write, learn and publish.