1. Problem: A Fragmented and Inaccessible Market

Real estate has been a significant investment vehicle in recent decades, but traditional real estate investments have several drawbacks that deter many potential investors.

1.1 Middleman Involvement and Third-Party Fees

Traditional real estate transactions involve numerous intermediaries, such as brokers, notaries, and lawyers, who charge substantial fees for their services. Additionally, governments often impose capital gains and foreign buyer taxes. FraXn's tokenization solutions and smart contract technology can significantly reduce these costs by minimizing the need for intermediaries, enhancing transparency, and saving investors money, paperwork, and time.

1.2 Real Estate Investment Trusts (REITs)

While REITs enable individuals to invest in physical property and generate income, they come with certain limitations. Major disadvantages of REITs include slow growth due to high statutory payout ratios, taxation of outputs as regular income, high expenses, and elevated risk levels.

1.3 Liquidity Issues

Traditional real estate and REIT assets are often limited to local markets, making it challenging to find liquidity. Tokenization addresses this problem by allowing fractional ownership and reducing the required investment amount, thereby attracting a broader range of investors and enhancing liquidity.

1.4 High Entry and Exit Costs

Property prices, especially in major cities and affluent areas, are generally very high. Additionally, exit costs are elevated due to third-party fees and the high charges imposed by qualified buyers.

1.5 Limited Access to Middle Eastern Real Estate

Investing in overseas real estate, particularly in the Middle East, involves cumbersome procedures. Non-Middle Eastern investors face significant barriers to property acquisition, and local funding applications are primarily available to native investors. REITs are often restricted to local exchanges, and cross-border transactions incur substantial additional costs, deterring foreign investors. Tokenization improves access and liquidity by enabling fractional ownership and lowering investment risks.

1.6 Exchange Rate Risks

International real estate investments are susceptible to exchange rate risks, which can significantly diminish returns. FraXn's tokenization platform mitigates this risk by facilitating cross-exchange transactions with other tokens and currencies, thereby protecting investors from exchange rate fluctuations.