C. The Blocksquare Approach Another innovative approach to tokenizing real
This layered approach was demonstrated through a
estate, distinct from the Liechtenstein model, has
pilot project tokenizing a parking space in Ljubljana,
been developed by the blockchain company
Slovenia. The notarized loan agreement was
Blocksquare. Specifically, Blocksquare has
successfully registered in the national land registry,
developed a unique protocol for tokenizing real
marking the first instance of a tokenized real estate
estate assets that bridges the blockchain world
asset being recorded by a European land registry (70).
with traditional legal protections. At the core of their approach is the creation of a digital token called
By bridging on-chain and off-chain elements,
the Blocksquare Property Token ("BSPT") which
Blocksquare delivers robust legal protections to token
represents fractional ownership in a real property
holders. The corporate resolution confers clear
asset (64).
property rights, while the loan agreement offers recourse if those rights are violated. Blocksquare's
To initiate the process, the real estate asset is
hybrid model provides a template tor effectively
valued and a smart contract is created to represent
tokenizing real estate in a legally compliant manner.
the BSPTs. This ERC-20 compliant contract contains identifying details about the property and
With $74.4 million of tokenized property across 18
encodes the transactional rules of Blocksquare's
countries, Blocksquare demonstrates the viability of
protocol (65).
fractionalizing real estate on the blockchain (71). Their novel approach merits consideration as jurisdictions
To legally link the BSPT to the underlying real
around the globe develop regulations for digital assets
esta te, Blocksquare first establishes a Public
and tokenization.
Corporate Resolution, a formal document signed by the legal representative of the property owner (66). This resolution delineates the rights conferred
to BSPT holders, such as revenue sharing, and the obligations owed to them by the owner (67). The resolution is published on-chain, creating an immutable record that binds the token to the real estate asset. Blocksquare then implements a loan agreement, with the property owner as the borrower and Blocksquare as the lender of the BSPTs (68). The property itself serves as the collateral. This agreement is notarized and registered with the land registry, preventing the owner from transacting with the property until the loan is repaid in BSPTs (69).
64. Peter Mere, Real-World Asset Tokenization 2.0, Blocksquare, (Sept. 27, 2023), https://blog.blocksquare.io/article/real-world-asset-tokeniz a tion-2-0-€stablished-bridge-between-blockchain-and-land-reg istry-1/. 65. Id. 66. Id. 67. Id. 68. Id. 69. Id. 70. First tokenized real estate in Slovenia registered land registry, Slovenian Press Agency, (Sept. 28, 2023), https://english.sta.si/3218800/first-tokenized-real-€state-in slovenia-registered-in-land-registry. 71. Blocksquare [@blocksquare_10]. Another week, Another Tokenized Property, (Sept. 25, 2023),.
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