7 Tokenization Terms Every Investor should know

The next property boom won’t start with cranes or concrete—it’ll start with code.

Real estate tokenization is reshaping how ownership, value, and liquidity flow through one of the oldest asset classes on Earth. But with new opportunities come new terms—and if you don’t speak the language, you’ll miss the deals before they’re even public.

Today, we’re decoding the seven most important concepts every investor should understand before the next wave of tokenized assets hits the market. Whether you’re buying your first digital brick or analyzing multi-million-dollar security tokens, these are the foundations of the new property frontier.

A security token represents ownership of a real-world asset—such as a building, fund share, or income stream—recorded on a blockchain.

Unlike NFTs, these tokens are regulated financial instruments and often pay dividends or rental income.

Think of it as your digital property deed with built-in compliance.

 Source: U.S. Securities and Exchange Commission (SEC)—Framework for “Investment Contract” Analysis of Digital Assets

👉 https://www.sec.gov/files/dlt-framework.pdf

Defines what qualifies as a security token and how such digital assets fall under securities law.

Tokenization divides a property into multiple tokens, each representing a share of its value.

This allows investors to buy a small fraction of high-value real estate and earn proportional returns.

It’s the democratization of property—participation without the full price tag.

Source: World Economic Forum — “The Future of Real Estate Investment: Tokenization and Fractional Ownership” (2021)

👉 https://www.weforum.org/reports/the-future-of-real-estate-investment-tokenization-and-fractional-ownership

Explains how tokenization enables partial ownership of high-value assets and broadens investor access.

A smart contract is a self-executing agreement written in code that lives on the blockchain.

Smart Contracts: What Are They, Really?

It automates critical processes like rental payouts, compliance checks, or resale restrictions—no middlemen, no paperwork.

This is how tokenized real estate stays transparent and efficient.

Source: Ethereum Foundation — “What is a Smart Contract?”

👉 https://ethereum.org/en/developers/docs/smart-contracts/

Provides the official definition, technical overview, and use cases for blockchain-based smart contracts.

If you want to know what makes tokenized assets flexible, meet ERC-1155 — the blockchain standard that allows both fungible (identical) and non-fungible (unique) tokens in a single contract.

It’s what lets one token represent a share of rent income while another in the same system represents the title deed itself.

This dual-function model powers many tokenized property frameworks.

Source: Ethereum Improvement Proposal (EIP-1155)—Multi Token Standard

👉 https://eips.ethereum.org/EIPS/eip-1155

The original documentation describes how ERC-1155 supports both fungible and non-fungible tokens in one contract.

Traditional companies use ledgers. Tokenized ecosystems use digital ROMs—blockchain-based ownership records that update instantly and can’t be tampered with.

It’s your transparent, immutable shareholder registry—visible to investors, auditors, and regulators alike.

Every transfer, vote, and dividend is recorded in real time.

Source: Liquefy Whitepaper ”Real Estate Tokenization: Hong Kong & Singapore Framework”

👉 https://www.liquefy.com/resources

Describes how digital ROMs on blockchain replace traditional ledgers for secure, real-time shareholder records.

This is where tokenization’s promise of liquidity becomes real.

Once property tokens are issued, they can be traded peer-to-peer or on regulated digital exchanges.

For investors, it means being able to sell part of a property position as easily as you’d sell stock—unlocking flexibility the real estate market has never had.

Source: Security Token Market, “State of Security Tokens 2025 Report”

👉 https://stomarket.com/reports

Covers emerging regulated exchanges, liquidity data, and the mechanics of secondary trading for tokenized assets.

In tokenized systems, compliance isn’t a manual process—it’s coded in.

Smart contracts enforce KYC (Know Your Customer) and AML (Anti-Money Laundering) checks automatically through whitelisting.

Only verified investors can hold or transfer certain tokens, ensuring that every transaction stays within legal bounds globally.

Source: DigiShares Academy ”Compliance, Whitelisting, and KYC in Tokenized Real Estate”

👉 https://academy.digishares.io/

Outlines how blockchain platforms embed investor verification and KYC/AML rules directly into smart contracts

 Local Insight: Lovina’s Zoning Win Sends Values Soaring

Good news for our Bali projects. Earlier this week, local authorities tightened hotel and restaurant permits across flood-risk zones—but Lovina received tourism-zone approval earlier this year, just before the freeze.

“If it had taken six months longer, it wouldn’t have been possible.”

That timing means our Lovina assets are now among the few legally buildable plots in North Bali, pushing scarcity and property values sharply higher.

This is excellent news for current investors—and a reminder of how fast regulation can shift real-world asset value.

(Source: Independent – Bali hotel & restaurant permit freeze)

That’s a wrap!

Talk soon.

Roman