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The tokenization of real-world assets has been tipped as a major use case of blockchain technology that could drive Web3 adoption. In episode 35 of Cointelegraph’s Hashing It Out podcasthost Elisha Owusu Akyaw interviews Sanjay Raghavan, vice president of Web3 Initiatives at Roofstock onChain, about tokenized real estate on the blockchain and how digital real estate investing interacts with the nonfungible tokens market and the decentralized finance landscape. Raghavan also talks about fractional nonfungible tokens (NFTs), regulations and the risks related to Web3 real estate platforms.

Raghavan explains how real estate is sold on the blockchain using NFTs. Companies that sell real estate on-chain must first purchase the property and create a limited liability company (LLC). An NFT is then created, which is associated with the ownership of the LLC. When users buy the NFT, they buy the LLC, which means they have purchased the property.

Raghavan tells Hashing It Out that regulations for tokenizing real-world assets can be complex. In the United States, for instance, various states have rules on the sale of assets, meaning that com navigate separate compliance requirements across 50 jurisdictions.