Lumia and Polygon Labs have teamed as much as construct the world’s first crypto real-estate undertaking, Lumia Towers. Following the announcement, crypto.information had the chance to conduct a Q&A with Head of Enterprise and Monetary Providers for Polygon Labs, Boris Spremo and Lumia CEO Kal Ali.
Spanning over 50,000 sq. meters and positioned within the largest metropolis in Turkey, Istanbul, the huge $220 million infrastructure is about to deal with 300 residential and business models and is poised to develop into a world crypto hub. In line with Lumia CEO Kal Ali, the dual skyscrapers will probably be accomplished and absolutely tokenized by the second quarter of 2026.
Ali stated Lumia Towers signifies a breakthrough in how individuals strategy real-estate possession. By utilizing the tokenization mannequin, they hope to make the actual property market extra accessible, open and seamless for retail traders.
In line with information from Landshares, the present market worth for tokenized real-world belongings is round $187 billion. Nevertheless, it’s estimated to rise between $3.5 trillion within the bear-case situation and $10 trillion within the bull case by 2030, reflecting a possible 50-fold progress. This explosive growth is basically pushed by ventures that try and fractionalize high-value belongings by way of blockchain expertise, making it doable for traders to personal business and residential properties by way of shopping for tokens.
Nevertheless, regardless of the promise of democratizing actual property funding, challenges reminiscent of regulatory complexities, market liquidity points, and the technological integration of bodily belongings with digital tokens nonetheless plague this pretty new mannequin and will result in potential dangers down the road.
As an illustration, the precise liquidity of tokenized actual property would nonetheless rely on the event of energetic secondary markets. With out enough buying and selling quantity, traders could discover it troublesome to purchase or promote real-estate possession tokens, limiting the anticipated liquidity advantages. In the mean time, the Lumia workforce has not supplied an evidence on how this problem might be solved.
Previously, different tokenization initiatives targeted on present buildings. Within the U.S., Tokeninvest bought a $740,000 in Longmont, Colorado and tokenized it, permitting third-party traders to straight provide 97% of the acquisition capital.
In contrast to earlier prokects, Lumia Towers will develop into the primary large-scale RWA real-estate undertaking constructed by a web3 firm.
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Head of Enterprise and Monetary Providers for Polygon (MATIC) Labs, Boris Spremo said that actual property has all the time been one of many markets the place the limitations to entry are “sky-high.”
Within the case of Turkey, the place the Lumia Towers will probably be constructed, actual property costs have continued to rise. Analysts have predicted property costs in Turkey will improve by 10% to fifteen%. Nevertheless, there may be additionally a excessive urge for food for actual property traders within the area. In January 2025, home gross sales in Turkey elevated by 39.7% year-on-year, reaching 112,173 models—the second-highest January determine on report. Mortgage-backed gross sales additionally noticed an increase of 182.8% in comparison with a 12 months prior.
Spremo believes the undertaking will be capable of make real-estate possession extra inexpensive as RWA tokenization is ready to take bodily belongings and “break them all the way down to doubtlessly $1 entry factors by way of fractional possession.” Although, how a lot every unit will price will nonetheless rely on the property costs within the area, which has proven no indicators of reducing as of late.
How will possession rights be distributed by way of the blockchain?
Ali defined that possession rights for the tokenized twin skyscrapers will probably be structured by way of Particular Function Autos or SPVs, which is able to purchase the tokenized property. Shares of the SPVs will probably be minted on-chain within the type of ERC-20 tokens.
“Token holders can have governance rights, permitting them to vote on selections relating to the usage of the property, reminiscent of whether or not to hire or promote,” stated Ali.
In line with Ali, Lumia Towers tokens will probably be deployed on the Lumia Chain, granting simpler entry for retail traders. The tokens will even have entry to DeFi protocols by way of the Lumia Stream and the Lumia Ecosystem.
All through the tokenization course of, Polygon’s position is ensuring that builders like Lumia can customise their blockchain for this specific-use case. Boris Spremo defined that Polygon is ready to decrease the price of tokenizing possession of a $220 million infrastructure with out compromising safety.
“Polygon infrastructure particularly handles high-value functions the place Ethereum alone is simply too costly or too sluggish. When you’re fractionalizing possession of $220 million in actual property, you can’t have $50 transaction charges or wait quarter-hour for affirmation,” stated Spremo.
The hopefuls and pitfalls of actual property tokenization
Shifting ahead, Lumia CEO Kal Ali stated Lumia is aiming to develop the Lumia Towers mannequin into different areas outdoors of Turkey, particularly areas like Center East and North Africa, the USA and Europe.
“The roadmap for growth will carry modern tokenized actual property to a world viewers, serving to to revolutionize actual property funding and possession on a bigger scale,” stated Ali.
Head of Enterprise and Monetary Providers for Polygon Labs, Spremo predicts there will probably be three rising traits in terms of RWA tokenization transferring ahead.
“First is the tokenization of whole neighborhoods or districts somewhat than particular person buildings. This creates alternatives for neighborhood governance and aligned incentives between residents and traders,” stated Spremo.
Second, he believes the actual property tokenization will probably be mixed with different forms of monetary merchandise, reminiscent of mortgage lending and insurance coverage merchandise. This manner, builders can make the most of blockchain expertise to attach them on to the tokenized property.
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Lastly, he sees the expertise as a gateway for extra conventional monetary establishments to enter the web3 house, particularly banks and funding funds.
Though Spremo hopes the actual property tokenization will be capable of “decrease the barrier” for individuals hoping to spend money on actual property, there are additionally many potential obstacles that would befall an actual property tokenization undertaking. These dangers vary from sensible contract and technological vulnerabilities to overvaluation as a consequence of speculative buying and selling. As is the character of tokens, the costs might develop into unstable relying on market exercise.
Moreover, tokenization of actual property doesn’t remove the normal dangers related to actual property investments, reminiscent of property administration challenges, tenant vacancies, and upkeep prices.
Most just lately, a Florida-based crypto actual property enterprise agency referred to as RealT launched an actual property tokenization initiative they claimed would “revolutionize actual property funding”, claiming to embody round 1,200 housing models throughout 800 properties in Detroit.
Sadly the undertaking proved disastrous to its tenants, who struggled with the blockchain-ownership mannequin as a result of that they had no concept who to pay hire to, contemplating the property is owned by quite a few anonymous token holders around the globe who haven’t any identification other than a couple of numbers and letters recorded on the blockchain.
Actually, in accordance with the New York Publish, RealT’s actual property division Michigan RealToken owes the town of Detroit at the very least $2 million in unpaid taxes and 1,000 blight tickets. The agency reportedly has 200 properties vulnerable to closing down as a consequence of unpaid debt. Nevertheless, a spokesperson for RealT has since denied these claims, saying that the actual property acquisitions corporations are beneath a separate possession from the agency.
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