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follow Patrick 2018 May 20, 5:26pm
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According to Sacks, the advantage of tokens is they reduce or eliminate the “illiquidity discount” for assets that can’t be publicly traded. This discount means people pay less because they’re worried an asset will be hard to resell.Sacks cited the professionally managed real estate market, which is worth $7 trillion but is not very liquid. He thinks it’s possible to unlock a huge amount of value by letting people buy and sell chunks of real estate with tokens—each token would correspond to ownership in a piece of property, and could be easily swapped on a blockchain.Sacks believes this newfound liquidity will attract more capital to real estate, and also create a derivatives market for property.“It will lead to a world where you can short real estate. You can go long Manhattan and short San Francisco,” he told the audience.Sacks also predicts real estate tokens are not a far-off technology, and that investors will be trading them by the end of the year.