Finance beyond Traditional Intermediaries: Trading and Lending in Tokenized Real Estate

Asset tokenization and decentralized finance restructure key intermediation functions. Liquidity is provided by pooled capital, which is governed by automated market-making rules, rather than by dealer balance sheets. Credit is extended against overcollateralized positions, with algorithmic enforcement, rather than by banks. We study these mechanisms in RealT’s tokenized real estate ecosystem. We show that when assets are tokenizes they depend on local house price growth. Using on-chain microdata that link secondary-market trades to borrowers’ collateral and debt positions, we show that borrowing activity is associated with higher buy-side price premia.