Introduction

PrestigeAsset Partners (A hypothetical real estate investment firm)

Objective

To build a secure, scalable platform on the Algorand blockchain to tokenize real-world assets (RWA), representing ownership shares of commercial properties as fractionalized, compliant digital tokens.

Proposed Solution

  • Blockchain Selection: We conducted a thorough analysis and selected the Algorand blockchain for its high throughput (1,000+ TPS), instant transaction finality, low cost (~$0.001 per transaction), and built-in regulatory features like optional co-chains and standardized assets (ASA).
  • Asset Tokenization Smart Contracts: Developed custom smart contracts (in TEAL and PyTeal) on Algorand to.
  • Mint ASAs: Create Algorand Standard Assets (ASAs) representing fractional ownership shares of a specific property.
  • Enforce Compliance: Implement clawback and freeze functionalities at the token level to ensure compliance with securities regulations and allow for managed transfers.
  • Distribute Dividends: Automate the distribution of rental income dividends to all token holders based on their share count.
  • Investor Portal: Built a sleek, secure web application where accredited investors could complete KYC/AML verification, purchase property tokens using ALGO or USDC, view their portfolio, and track dividend payments.
  • Custody Integration: Integrated with a qualified digital asset custodian to provide secure, institutional-grade storage for the private keys associated with the tokenized asset treasury.

Challange

PrestigeAsset wanted to democratize access to high-value commercial real estate by allowing fractional ownership. They needed a blockchain solution that was fast, had negligible transaction costs for investors, and was secure enough for multi-million dollar assets. Ethereum's gas fees at the time made this business model unviable.

Result

  • Successful Tokenization: Successfully tokenized a $45 million office building in Berlin, breaking it into 100,000 tokens, each representing a $450 fractional share.
  • Efficient Trading: Investors could buy and sell shares with transaction fees of less than a penny, making micro-investing feasible.
  • Global Investor Base: The platform attracted investors from over 30 countries, who collectively purchased 100% of the tokenized offering within two weeks.
  • Automated Operations: Rental income distributions, which were previously a manual accounting nightmare, became fully automated and transparent, occurring on the 1st of every month without fail.

Quote from the Client

Algorand's technology was the perfect fit for our needs, and BSEtec were the experts to implement it. They understood the nuanced legal requirements of asset tokenization and built a platform that is not only technologically superior but also fully compliant. They have opened up a new world of liquidity for the real estate market.

— Williams, PA Partners