Lumia and Polygon Labs labored collectively to construct Lumia Towers, the world's first crypto actual property venture. Following the announcement, crypto.information had the chance to conduct a Q&A with CEO of Polygon Lab, Boris Spumo and Lumia, Karali, Company and Monetary Companies.
Over 50,000 sq. meters in Istanbul's largest metropolis in Turkey's largest metropolis, an enormous $220 million infrastructure is ready as much as accommodate 300 residential and industrial items, poised to change into a worldwide crypto hub. Based on Lumia CEO Kal Ali, Twin's skyscraper will likely be accomplished by the second quarter of 2026 and will likely be absolutely tokenized.
Ali mentioned Lumia Towers means a breakthrough in how folks strategy lifelike possession. By utilizing a tokenization mannequin, they need the actual property market to be extra accessible, open and seamless for retail traders.
Based on Landshares knowledge, the present market worth of tokenized real-world belongings is roughly $187 billion. Nevertheless, by 2030, it’s estimated that it’s going to rise between $3.5 trillion within the barecase situation and $10 trillion within the bull case, reflecting 50 instances the potential progress. This explosive growth is pushed largely by ventures looking for to separate high-value belongings by way of blockchain expertise, permitting traders to purchase tokens and personal industrial and residential properties.
Nevertheless, regardless of the guarantees of democratized actual property funding, regardless of challenges resembling regulatory complexity, market liquidity points and technical integration of bodily belongings with digital tokens, this quite new mannequin can plague and result in potential dangers.
For instance, the precise liquidity of tokenized actual property is dependent upon the event of lively secondary markets. With out ample buying and selling quantity, traders will discover it troublesome for them to purchase and promote property possession tokens and may restrict anticipated liquidity advantages. At the moment, the Lumia workforce doesn’t present an evidence of how this downside could be solved.
Prior to now, different tokenization initiatives have centered on current buildings. Within the US, TokenInvest purchased $740,000 in Longmont, Colorado, and tokenized it, permitting third-party traders to immediately provide 97% of their buy capital.
Not like earlier outcomes, Lumia Towers would be the first giant RWA actual property venture constructed by a web3 firm.
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Boris Spremo, head of enterprise and monetary providers at Polygon (Matic) Labs, mentioned actual property is likely one of the markets the place entry obstacles are at all times “Sky-Excessive.”
Within the case of Türkiye, the place Lumia Tower is being constructed, actual property costs proceed to rise. Analysts predict that property costs in Türkiye will rise by 10% to fifteen%. Nevertheless, there may be additionally a excessive urge for food for actual property traders within the space. In January 2025, dwelling gross sales in Türkiye elevated 39.7% year-on-year to 112,173 items. Mortgage-backed gross sales additionally confirmed a rise of 182.8% in comparison with a 12 months in the past.
SPREMO believes that the venture could make property possession extra reasonably priced as RWA tokenization permits for bodily belongings to be acquired and “decomposed into doubtlessly $1 entry factors by way of fractional possession.” Nevertheless, the price of every unit is dependent upon the native property value. This reveals no indicators of a decline just lately.
How is possession distributed by way of the blockchain?
Ali defined that possession of tokenized twin skyscrapers consists of particular function autos or SPVs that purchase tokenized properties. SPV shares are created on-chain within the type of ERC-20 tokens.
“Token holders have the precise to governance and can be capable of vote for choices concerning using the property, resembling renting or promoting,” Ali mentioned.
Based on Ali, the Lumia Towers token will likely be deployed within the Lumia chain, making it simpler for retail traders to entry. The token additionally has entry to the Defi protocol by way of the Lumia stream and the Lumia ecosystem.
All through the tokenization course of, Polygon's function is to permit builders like Lumia to customise the blockchain for this explicit use case. Boris Spremo defined that Polygon can scale back the price of tokenizing $220 million infrastructure possession with out compromising safety.
“Polygon Infrastructure particularly handles high-value purposes the place solely Ethereum is just too costly or too sluggish. In case you're fractionating possession of $220 million in actual property, you received't be capable of win a $50 transaction payment or wait quarter-hour to substantiate.
Hope and pitfalls of actual property tokenization
Lumia CEO Kal Ali mentioned Lumia is aiming to broaden its Lumia Towers mannequin to areas exterior of Turkey, specifically the Center East, North Africa, the US and Europe.
“The roadmap for growth will assist convey modern tokenized actual property to world audiences and revolutionize actual property investments and possession on an enormous scale,” Ali mentioned.
Spremo, head of enterprise and monetary providers at Polygon Labs, predicts there will likely be three rising traits in RWA tokenization.
“The primary is tokenization of the neighborhood or complete district, not particular person buildings. This creates alternatives for group governance and aligns with incentives between residents and traders,” Spremo mentioned.
Second, he believes that tokenization of actual property is mixed with different forms of monetary merchandise, resembling mortgage lending and insurance coverage merchandise. This permits builders to make the most of blockchain expertise to attach them on to tokenized properties.
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Lastly, he sees the expertise as a gateway for extra conventional monetary establishments to enter Web3 areas, notably banks and funding funds.
SPREMO hopes that tokenization of actual property can “decrease obstacles” for individuals who need to put money into actual property, however there are additionally potential obstacles that would fall on actual property symbolization initiatives. These dangers vary from sensible contracts and technical vulnerabilities to overvaluation by way of speculative buying and selling. Much like the character of tokens, costs could be risky relying on market exercise.
Moreover, actual property tokenization doesn’t rule out conventional dangers related to actual property funding, resembling property administration challenges, tenant emptiness, and upkeep prices.
Extra just lately, Realt, referred to as the Florida-based Crypto actual property enterprise, has launched an actual property tokenization initiative that claims to “revolutionize actual property funding,” claiming it consists of round 1,200 housing items throughout 800 properties in Detroit.
Sadly, the venture proved disastrous for tenants who struggled with the blockchain possession mannequin as a result of they didn't know who to pay for blockchain funds.
In actual fact, in keeping with the New York Publish, Michigan's Actual Property Division, Leatken, owes Detroit Metropolis a minimum of $2 million in unpaid tax and 1,000 exhaustion tickets. The corporate reportedly has 200 properties liable to being shut down resulting from unpaid liabilities. Nevertheless, an actual property spokesman denied these claims, saying that the property acquisition firm is beneath a separate possession curiosity from the corporate.
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