🎟️Why We Use NFTs
🧾 Why NFTs Instead of Fungible Tokens?
When tokenizing real estate, one of the most important decisions is how to represent ownership on the blockchain: should you use fungible tokens (like ERC-20), or non-fungible tokens (NFTs, like ERC-721 or ERC-1155)?
At PropertyDEX, we chose to use NFTs—and here’s why.
🔄 Fungible Tokens vs NFTs: What’s the Difference?
Fungible Tokens (ERC-20): These are interchangeable and identical tokens. One token is the same as any other, like dollars or Bitcoin.
Non-Fungible Tokens (NFTs): Each token is unique and carries its own metadata. It can represent a specific share of a property, including individual rights and attributes.
🧠 Why NFTs Are Better for Real Estate
1. 🎯 Each Property Share is Unique
Every NFT can represent:
A specific unit or fraction of a property
Unique metadata (e.g. floor number, rental terms, ownership timestamp)
Specific rights (e.g. right to revenue, access, governance)
This makes it easy to track, assign, and verify ownership, especially in a legal context.
2. ⚖️ Regulatory Flexibility
Fungible tokens (like ERC-20) can easily be interpreted as securities, which often triggers complex regulatory obligations (e.g., SEC rules, MiFID II).
NFTs, on the other hand:
Represent unique, utility-based assets
Can be designed to avoid characteristics of financial instruments
Are more often treated as digital collectibles or certificates of ownership
This makes NFTs a safer and more compliant choice, especially in early-stage and cross-border projects.
3. 🔧 Customizable Rights and Logic
With NFTs, you can encode flexible rights into each token, such as:
Revenue-sharing ratios
Governance voting power
Usage rights or access to data
Priority in rental income or dividends
This is much harder to achieve with fungible tokens, where every unit is identical and lacks metadata.
4. 🔍 Improved Transparency and Auditability
NFTs offer better traceability:
Each transfer, owner, and interaction is uniquely recorded
You can always track who owns what, and when they bought it
Ideal for audits, dispute resolution, and trustless verification
🏆 Conclusion: NFTs Fit Real Estate Like a Glove
Real estate is naturally non-fungible—each property is different, and even shares of the same property may have different conditions. NFTs mirror this structure perfectly, enabling real, enforceable, customizable ownership that can be managed entirely on-chain.
For this reason, PropertyDEX uses NFTs as the foundation for fractional property investment.
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