Introduction
In the early years of blockchain, the idea of bringing real estate on-chain was often framed as a distant promise. Advocates talked about instant transactions, global access to property markets, and the ability to own a fraction of a building with the same ease as buying a share of stock. For a long time, however, these ideas remained just that — promises. Legal hurdles, technical bottlenecks, and market skepticism kept real estate tokenization in the pilot phase.
That has now changed. Over the last three years, dozens of platforms have gone live, pilot projects have matured, and regulators from LATAM via Europe and Middle East & Africa to APAC have started to explore frameworks that make real estate tokenization more than just a buzzword. As we enter this new stage, one question has become central: how exactly should real estate be tokenized?
This is no longer a matter of marketing, but of architecture. Which blockchain layers do we use? How do we handle scaling? Which standards do we adopt to make tokens not only tradable, but also legally enforceable? And perhaps most importantly: how do we align blockchain design with real-world property law and investor protection?
This blogpost dives into these questions. Drawing deeper insights from FIBREE’s annual Product Database survey with this year 844 listed BCRE-products. For this blogpost we selected ‘only’ the 475 products from this year’s Product Database in the categories ‘Finance & Invest’ and ‘Markets & Platforms’. These products represent the leading edge of developing tokenization-solutions for real estate-investing. By making an in-depth cross-analysis we are now possible to explain how the technology of tokenization real estate is evolving. In this paper we will take a look under the hood on seemingly deep tech topics, but which show when analysed all together show us how in general the technology stack for a Real Estate tokenization proposition looks like. In this blogpost we will highlight aspects like the growing adoption of ERC-3643 as a global real-world asset token standard, and patterns we observe in the FIBREE Product Database 2025, we explore the technology stack behind real estate tokenization — from Layer 1 settlement all the way to Layer 3 compliance logic.
The Blockchain Stack for Tokenization: More Than Just a Chain
When people talk about “putting real estate on blockchain,” it is easy to think of it as simply issuing a token. In reality, real estate tokenization requires a carefully layered stack of technology. Each layer plays a very different role, and the choices made at each level determine how trustworthy, scalable, and compliant the system will be.
At the bottom is Layer 1, the settlement layer — the base blockchain where tokens live. This layer ensures security and permanence. Above that sits Layer 2, the scaling layer. Here, transaction costs and speed are addressed through sidechains or rollups. Finally, on top, we find Layer 3, the application and compliance layer, where rules about who can hold, transfer, or trade tokens are embedded into smart contracts.
Some even speak of a fourth layer — the off-chain legal layer, where registries, custodians, and regulators come into play. Without alignment here, tokens remain little more than parallel records without enforceability.
Layer 1: The Foundation of Trust
The choice of Layer 1 blockchain is often the most visible and controversial. Should a project launch on Ethereum, Polygon, Binance Smart Chain, or perhaps even on non-EVM alternatives like Solana or Tezos?
So far, Ethereum has remained the anchor for most tokenization initiatives. Its network effect, developer ecosystem, and institutional familiarity make it a natural choice. As the deeper insights behind FIBREE’s Product Database 2025 show, even in regions that experiment with sovereign or permissioned chains, Ethereum remains the “reference chain” against which all others are measured.
Still, Ethereum’s strength comes with a cost: high transaction fees during peak times. For high-value, low-frequency transactions (such as issuing shares of a building), this may not be a deal breaker. But for fractionalized ownership models, where tokens may change hands frequently and rental income distributions are paid out monthly or even weekly, fees quickly become unsustainable.
This is where Ethereum-compatible chains like Polygon, Avalanche, or Binance Smart Chain step in. They offer lower costs while retaining compatibility with Ethereum tooling. Projects can deploy tokens across these chains without rebuilding from scratch, while investors still interact through familiar wallets and exchanges.
Some platforms have tested non-EVM blockchains such as Solana or Algorand. These provide impressive speed and cost efficiency, but their ecosystems remain smaller, and institutional adoption lags. Without trust in the broader network, tokenized real estate on such chains risks isolation.
Layer 2: Making Tokenization Affordable
If Layer 1 secures real estate tokens, Layer 2 makes them practical.
Fractional ownership only works if tokens can be traded or distributed without prohibitive costs. Imagine a retail investor receiving $5 of rental income every month — if blockchain fees are $10, the entire model collapses.
This is why scaling solutions have become central. Polygon has emerged as the most popular choice, striking a balance between cost and Ethereum security. A notable example is DigiShares’ partnership with REX (Real Estate Exchange), which runs on Polygon to enable low-cost trading while linking to a regulated broker-dealer for compliance.
Beyond Polygon, the industry is closely watching rollups like Arbitrum and Optimism, as well as zk-rollup technology. These solutions promise near-instant transactions at fractions of a cent, while still settling back to Ethereum for security. For institutional adoption, especially in markets that demand privacy and auditability, zk-rollups are seen as a particularly promising path.
In emerging markets, the cost issue is even more pressing. The FIBREE Product Database insights showthat platforms in such circumstances often rely on Polygon or private sidechains to keep transaction costs manageable. For tokenization to scale in regions with smaller ticket sizes and less affluent retail investors, cost efficiency is not just a bonus — it is a necessity!
Layer 3: From Tokens to Securities
While Layers 1 and 2 determine security and cost, Layer 3 determines legality. This is where compliance, investor eligibility, and regulatory requirements are enforced directly at the token level.
Early projects often relied on ERC-20, the basic fungible token standard. While simple and universally supported, ERC-20 cannot enforce restrictions. Anyone with a wallet could in theory receive the tokens, regardless of whether they were accredited or even legally allowed to hold securities.
Recognizing this gap, the industry began to adopt ERC-1400, a suite of security token standards designed to add compliance features such as partitioned ownership, restricted transfers, and forced redemptions. While an improvement, ERC-1400 saw fragmented adoption and lacked universal buy-in from regulators.
The next step is ERC-3643, sometimes referred to as the “real-world asset token standard.” This standard goes beyond technical specifications by directly embedding identity verification and compliance into the token. Tokens issued under ERC-3643 can only be transferred between whitelisted, verified investors. Compliance rules — such as jurisdictional limits or investor categories — can be automated through smart contracts.
ERC-3643 was designed for precisely this type of use case: tokenized securities, real estate, carbon credits, and other regulated assets. Its modularity makes it future-proof, while its compliance features give regulators and institutional investors confidence.
Some experiments are already incorporating ERC-3643-style logic, ensuring that only registered and approved investors can participate in tokenized real estate. This balances accessibility with legal enforceability — a critical step if tokenization is to scale responsibly.
Lessons learned
So many pioneers in the world in one database together have become a fascinating case study in how blockchain layers and token standards have evolved and are currently being used worldwide. Together they also show a step-by-step, slow, but steady growing market where regulators are open to innovation but insistent on compliance. As a result, platforms often adopt a hybrid model:
Issuance and investor registries are maintained in permissioned blockchains to satisfy regulators.
Tokens are then mirrored or bridged to Ethereum or Polygon for liquidity and accessibility.
This dual approach — private for compliance, public for liquidity — could well become a template for other countries. It reflects that tokenization is not just about technology, but about fitting technology into legal and institutional structures.
Globally, we see similar patterns. Some platforms run entirely on public chains, prioritizing speed and reach. Others keep critical functions in private environments but allow public visibility for investor confidence. In both cases, the adoption of standards like ERC-20, 1400 or 3643 is helping to align practice with regulation.
Where the Industry is Heading
From this global view, several trends stand out:
- Ethereum + Polygon as the default stack. Despite experiments with other chains, the gravity of Ethereum’s ecosystem makes it the anchor for most tokenized real estate. Polygon adds affordability.
- ERC-3643 emerging as the compliance standard. While ERC-20 remains widespread for simplicity, and ERC-1400 still sees use, ERC-3643 is rapidly gaining recognition as the best fit for regulated RWAs.
- Hybrid public–private models. Combining private, permissioned registries with public token issuance is increasingly common. This balances regulatory control with market visibility.
- Integration with registries is key. As the leading examples illustrate, true enforceability comes when tokens are linked to land registries and/or legal records. Without this, tokens risk being informational rather than binding.
Conclusion
Real estate tokenization is no longer a question of if. It is a question of how.
The technology stack that emerges — Ethereum and its scaling solutions at the base, ERC-3643 as the compliance layer, and strong registry integration off-chain — is shaping up as the industry’s blueprint. This stack provides not just liquidity, but also the trust and enforceability required for real estate to be treated as a serious asset class in digital form.
Looking ahead, we can imagine two paths. In one, ERC-3643 becomes a universal standard, paving the way for global interoperability in real estate token markets. In another, countries build sovereign or permissioned blockchains, bridged to Ethereum, blending national control with international reach. In both scenarios, what matters most is not the promise of tokens, but the confidence they can inspire — for investors, regulators, and property owners alike.
Tokenization may at first look like a digital format of what is commonly known as a share of stock. But with the right layers, the right standards, and the right legal integration, it can make real estate far more liquid, transparent, and accessible than it is today. And maybe, at a certain moment in time, make tokenized Real Estate as fluid as stocks or bonds or even go beyond. We can’t give you the answer yet, the future will tell us.