Real World Assets Private Investments

[@zzznap970]

I really like the comment section where people ask very good questions! And thanks for the thorough replies

[@Interaxis]

I try to reply to the good questions

[@mountainman9145]

Additional comment - The benefits of fractionalization and liquidity are apparent however could there be drawbacks as well. For example, Gary's Real Estate Fund has purchased a fancy city high rise apartment building in downtown Manhattan which it then places on chain with its associated Gary Tokens. These tokens can then distributed to multiple investors around the world. Some may be used to generate collateral for the investors. Now Gary's Real Estate Fund wants to sell the Manhattan apartments - how do you get consensus for the sale of the property over potentially hundreds of investors and on the sale of apartment building the foundation backing the collateral has disappeared.

[@Interaxis]

Another good question. So glad you're thinking through these situations. Again, the tokens just represent ownership, just like paper contracts and stock certificates. Assume I invest $100k to get 100,000 tokens, representing 1% equity. I use those tokens as collateral for a loan of $50k. If Gary sells the building, I'll receive the proceeds since I'm an owner. Say he sells it for double the original purchase price. I receive $200k (whether through fiat currency delivered to my bank, or a stablecoin delivered to my wallet). I can pay back the loan, and still have $150k left over.

[@mountainman9145]

@@Interaxis Thank you for your replies. Last question -apologies. If the tokens represent direct ownership then does Gary require permission from all the other token holders to sell the building?

[@Interaxis]

Depends on how the LLC or partnership is set up. In most real estate funds, the investors don't have much of a say, so that shouldn't change. The tokens are just a representation of ownership. The way the fund functions doesn't change.

[@sebatustra1]

gooood content!!

[@Interaxis]

Thanks!!

[@chicagoboy279]

Can we also decide to stop giving dividends to a wallet

[@mountainman9145]

Forgive me my ignorance however should the LLC (aka Gary's Real Estate fund in this example) have an unfortunate black swan event which results in the collapse of the LLC what happens to the management of the tokens, distributions and and redemption of the RWA? Is there currently financial legislation and regulations around this scenario. In this video there is no mention of counter party risk - crypto currency (e.g. btc) has zero counter party risk however is it true that RWAs do have this counter party risk - i.e. in this example that would be Gary's Real Estate Fund supplying the Gary Tokens.

[@Interaxis]

I'm not a lawyer, so can't fully comment on something like bankruptcy proceedings. Remember, the tokens are not separate from the ownership of the LLC, they represent the ownership. So, in the current traditional world, if I invest $100k to receive a 10% equity share of the LLC, I get pieces of paper representing my 100,000 membership interests. In the tokenized world, I'll just receive 100,000 tokens to represent the interest. If Gary's Real Estate fund goes bankrupt, my tokens are as worthless as the pieces of paper that show my interest. The tokens are just a more efficient way to represent and denote the ownership

[@mouhcineinstrumental]

Is it the tokenization has the same concept as buying shares or stocks? I didn’t see how the tokenizatin is more efficient than buying stocks !

[@Interaxis]

A token that represents a public stock isn't much different than a stock. The difference comes in: the ability to self-custody the assets so I don't have to hold them at Schwab or Fidelity. The ability to trade the assets and settle in real time (see GameStop fiasco) The ability to get more transparent, up to the minute data to inform the price. As for tokenized versions of private company equity, this is a game changer as it creates the opportunity for greater liquidity, and participation in the financial system. For example, I might find a buyer for part of my investment in a real estate deal, or I might use that asset as collateral for a loan