How does real estate tokenization work in simple terms?

First, the property is placed into a legal structure, usually a company or SPV that owns the asset. Second, this company creates a fixed number of digital tokens that represent shares or rights to the property.

Then, the issuer offers these tokens to investors through a platform. Investors pass KYC/AML checks, pay with fiat or crypto, and receive tokens in their wallets or with a custodian.

The platform keeps a record of all token holders and their share.

Later, rental income or profits can be distributed to token holders according to how many tokens they own. Tokens can sometimes be sold on a secondary market, depending on the rules and regulation.