RWA On-Chain Process

After a detailed sourcing, selection, and due diligence process, Robinland underwrites (or has a real estate PE partner to underwrite) a real estate debt or equity project and sets up an SPV (Special Purpose Vehicle) to hold the asset. Using that SPV, Robinland issues a private (e.g. Reg D) or public fund (i.e. Reg A+) fund via the so-called STO (Security Token Offering) process. After the filing (and/or approval) with the SEC (the U.S. Security and Exchange Commission), Robinland issues security tokens under the ERC-1400 protocol, a well-established token standard that uses computer code to enforce the security laws, to be pledged with DeFi lenders or to be sold to individual investors.

By bringing RWA on-chain, we bring the below benefits over traditional securities:

  • Improved liquidity:

    • DeFi has some underlying financial innovations that facilitate the liquidity problem, such as via AMM (Automated Market Maker), that allows you to execute a on-chain transaction when there’s no counterparty.

    • Security tokens’ smaller ticket size compared to traditional crowdfunding platforms’ minimum investments lowers the entry bar for individual investors, further improving liquidity.

    • There are already security token exchanges out there with some baseline level of liquidity.

    • There is $4 trillion locked in private equity and trillions in real estate. By removing administrative and technological roadblocks, tokenization opens assets up to a global investor pool, provides a way to trade previously illiquid assets, and stands to narrow the 20-30% illiquidity discount currently levied against private companies.

  • Investment stability for investors:

    • In the past, there are only 2 types of assets available, token cash, i.e. stablecoin, or token stock, i.e. currencies such as BTC/ETH. We’re providing a third asset class - “token bond”, that fills in the gap in the risk-return profile, allowing investors to diversify their portfolio.

  • Increased transparency and decentralization (embracing Web3):

    • Security tokens give issuers, investors, and agents access to the same source of truth, which helps the cap table stay up-to-date and reduces disputes around record keeping.

    • This means investors actually hold the digital securities in their self-custody wallets, rather than the digital “share certificates” in the ledgers of the centralized platforms.

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