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Top DeFi Protocol Aave Ventures into Real Estate Tokenization

A rising star in the crypto industry as the second largest DeFi token by market capitalization, Aave Protocol revealed that it is making its foray into real estate tokenization in partnership with RealT, a blockchain-based platform that offers real estate investment access in the form of shares to investors. With these shares, investors can enjoy stable cash flows on the return of their investments of properties offered on the RealT platform in stablecoins.

“The Aave Protocol allows for the creation of new money markets. These multiple markets have different purposes and parameters, and we are excited to announce that we’ll support a proposal to add a RealT Market to the protocol. This is a market where RealT tokens can be used as collateral to borrow stablecoins,” the announcement said. “On the Aave RealT market users will be allowed to deposit their tokens into the Aave Protocol and use them as collateral to borrow stablecoins, opening up new use-cases for their assets.”

While the tokenization of real estate assets is hardly new, the collaboration between RealT and Aave is one of the first examples of DeFi and real estate integration, adding even greater liquidity into an industry that is known for being relatively illiquid. Tokenizing real estate assets, for example properties, allows investors who are unable to purchase a full property fractionalized ownership of said property. On top of that, DeFi’s lending mechanism further boosts the liquidity aspect for investors.

There is a certain level of risk when dealing with tokenized real estate assets in the DeFi realm, but Aave noted that risks have been taken into consideration and minimized as much as possible. RealT assets have also been highlighted as “fully compliant” and will only be available to a selected group of investors and participants, namely whitelisted Ethereum addresses that have gone through KYC verification with RealT.

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