Cardano-powered Real World Asset tokenization: Unlocking a $70T Market

[GENERAL] Name and surname of main applicant

Roy Malkin

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Co proposers and Additional applicants

Don Oparah don@redswan.io

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

8

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Summarise your solution to the problem (200-character limit including spaces)

Build a Cardano-powered & SEC/FINRA-compliant security token studio/STO platform to fractionalize commercial real estate, making it tradable like stock. Initial target $50M+ assets minted on Cardano

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs.

The token-minting studio component of the project will be open-sourced in the form of an SDK to enable and encourage members of the Cardano ecosystem to develop more security-token-based applications over time. After due consultation with the Cardano team about best practices for open-sourcing on the platform, the token minting studio component will be made source-available with a declared open-source repository.

The other components of the project will be integrated with Cardano but remain propriety to Red Swan as they are key to the business model, however, the community will benefit from the significantly increased transactions and locked value generated by the commercial real estate tokenization use case enabled via this work.

[METADATA] SDG rating

Red Swan's initiatives align with and contribute to the following Sustainable Development Goals (SDGs):

1) SDG 11 - Sustainable Cities and Communities

• Red Swan has established a $100M fund dedicated to building sustainable homes in Africa. This initiative directly supports the development of sustainable cities and communities by providing eco-friendly housing solutions.
• The company also has a $30M+ tokenization fund focused on eco-tourism and sustainable hospitality structures. This fund promotes sustainable tourism practices and the creation of green hospitality infrastructure, contributing to the long-term sustainability of cities and communities.

2) SDG 13 - Climate Action

• Buildings account for 39% of global energy-related carbon emissions worldwide. By recapitalizing buildings and implementing green upgrades, Red Swan actively reduces the carbon footprint and energy consumption of these structures.

• These green upgrades may include energy-efficient lighting, improved insulation, renewable energy systems, and other eco-friendly solutions. By reducing the energy consumption and carbon emissions of buildings, Red Swan contributes to global efforts in combating climate change.

• Furthermore, the focus on sustainable homes and eco-tourism structures demonstrates Red Swan's commitment to promoting sustainable practices and raising awareness about the importance of climate action in the real estate and hospitality sectors.

Through these initiatives, Red Swan not only makes a positive impact on the environment but also sets an example for other companies in the industry to prioritize sustainability and align their practices with the Sustainable Development Goals.

[SOLUTION] Please describe your proposed solution.

Our company, RedSwan CRE, is already the world's leading digital marketplace of tokenized commercial real estate currently with $9B in assets. Our proposed solution creates a new standard for connecting individual investors with fractionalized commercial real estate ownership via digital assets on the Cardano blockchain ecosystem. In addition, our proposed solution has several benefits to the Cardano Ecosystem:

Expand key use cases on the Cardano Blockchain: Bridging the gap between individual investors and access to fractionalized Commercial Real Estate leverages Cardano's capabilities for something more than typical crypto transactions; it gives investors the opportunity to invest in Commercial Real Estate easily, through Cardano's blockchain.

Increase demand for Cardano Native Utility Token: Our solution will increase the demand for the underlying native ADA utility token, as a fee for the Commercial Real Estate transactions and initial minting of real estate on Cardano will be charged in the native Cardano token.

Access to fractional shares of real estate: The solution will bring in more users who value real-world assets (RWA), like Commercial Real Estate, who are seeking to have ownership of large Commercial Real Estate assets in the digital sphere. We conservatively estimate an addition of dozens of Commercial Real Estate assets and thousands of users within the first year post-implementation.

Institutional Partners Assets: Cardano's institutional partners that own quality Commercial Real Estate buildings will be able to tokenize their buildings easily and rapidly on Cardano.

Brands Cardano as one of the Most Trusted Protocols: If you can transact $1B skyscraper transactions on Cardano, which is the highest form of visual persuasion in financial markets, both institutions and individuals can now trust Cardano with ANY transactions.

2-year goal: We have a plan in place to go from $9 Billion in assets on our Red Swan CRE platform currently to $25B+ in digital assets under management by the beginning of 2026. Leveraging our industry knowledge and providing liquidity solutions for major issuers will allow us to expand vertically and geographically as the capital markets world transitions from analog to digital. Creating proprietary issuance and exchange technology specifically for digital real estate securities would provide better, faster, and easier service to customers over the long term. We plan to issue a lot more assets beyond the initial $50M we have already allocated for this project phase with Cardano once our relationship with the Cardano Foundation and the Cardano community expands.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community.

Our Cardano-powered real estate tokenization platform will have a transformative impact on the Cardano community in several key ways:

1. Expanding Cardano's Real-World Use Cases: By facilitating the fractionalization and tokenization of the commercial real estate asset industry worth over $70 trillion globally, we will significantly broaden the real-world applications of the Cardano blockchain. This will showcase Cardano's capabilities beyond just cryptocurrency transactions and solidify its position as a leading blockchain for regulated digital assets. Real World Assets (RWA) tokenization is one of the most important areas for the crypto industry today. We are currently the leading company in the 2nd biggest asset class of real-world assets which is commercial real estate.
2. Driving Increased Network Activity: As a part of this project, we plan to list $50 million in tokenized commercial real estate on Cardano once our token studio is completed. This, along with the ongoing transactions and interactions from individual and institutional investors, will generate substantial transaction volume and staking activity on the network. This will help to increase liquidity, security, and overall network health.
3. Attracting New Users and Capital: Our platform will introduce thousands of commercial real estate investors, both individual and institutional, to the Cardano ecosystem. This influx of new users and substantial capital inflows will contribute to Cardano's growth, strengthening its position in the digital asset market. Notably, the buildings we list will be managed by multi-billion dollar operators, some of the world's biggest companies, ensuring that major industry enterprise players will be using Cardano by default.
4. Boosting Adoption and Confidence: By providing a Cardano-based, industry-compliant solution for accessing previously inaccessible commercial real estate investments, we will demonstrate the blockchain's ability to enable trust, transparency, and accessibility in large traditional financial markets. This will drive increased mainstream adoption and confidence in Cardano.
5. Strengthening the Cardano Ecosystem: The development of our proprietary real estate tokenization platform on Cardano will spur the creation of ancillary services, such as custody, trading, and analytics tools. This will foster a more robust and diverse Cardano ecosystem, benefiting the community as a whole.
6. Laying the Foundation for Future Growth: This project opens up Cardano for future collaborations with our company, which will lead to increased listings of tokenized real estate assets. We aim to return in a future phase 2.0 to add $100 million in additional assets bringing our 2-phase total to $150M in 2025. We already have more than this amount of assets on our Red Swan CRE platform to ensure that this is something that can be executed without delay.

In summary, our project will be a significant catalyst for Cardano's growth, driving increased network activity, user adoption, capital inflows, and the expansion of real-world use cases - all of which will strengthen the Cardano community and its position as a leading blockchain platform. The initial $50 million in tokenized commercial real estate properties on Cardano for this first phase, managed by multi-billion dollar operators, is a tangible commitment to this vision, with the potential for even greater future growth.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

As the world's leading digital marketplace for tokenized commercial real estate investments, RedSwan CRE is uniquely positioned to deliver this project with the highest levels of trust and accountability. Our team has unparalleled expertise and a proven track record in the real estate and digital securities sectors.

1) Our Capabilities and Experience:

• RedSwan CRE currently manages over $9 billion in tokenized real estate assets, having pioneered the use of blockchain technology to fractionalize and democratize commercial property ownership.
• Importantly, we are the only commercial real estate-focused tokenization company with an SEC-FINRA broker-dealer license for digital securities, providing an unparalleled level of regulatory compliance.
• Our executive team consists of seasoned professionals with decades of experience in real estate, finance, technology, and regulatory compliance. This includes individuals who previously held senior roles at leading institutions like Cushman & Wakefield and Colliers.
• We have established strong partnerships with major real estate operators, property managers, and institutional investors, who collectively control over $70 billion in commercial real estate assets.
• Our in-house legal and compliance team ensures all of our token offerings adhere to the strictest securities regulations, providing institutional-grade trust and transparency.

2) Our Validation and Accountability:

• We will engage independent third-party auditors to validate the feasibility and viability of our Cardano-based tokenization platform before deployment.
• Our platform will utilize cutting-edge blockchain analytics and reporting tools to provide real-time transparency into all transactions and asset valuations.
• We will implement robust governance and risk management protocols, including multi-sig wallet controls and regular third-party audits, to ensure the proper stewardship of all funds.
• As a further demonstration of our commitment, we are open for Cardano to have an independent verifier to confirm the veracity of $50 million in tokenized real estate assets we intend to mint on the Cardano blockchain as part of this project

By leveraging our industry expertise, regulatory compliance, and commitment to transparency, we are confident in our ability to successfully execute this project and deliver transformative value to the Cardano ecosystem. Our track record, partnerships, and safeguards will ensure the highest levels of trust and accountability throughout the process.

[Project Milestones] What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1: Design Phase for Security Token Standard/Studio Module on Cardano (1 month)

A: Milestone Outputs

• Technical specification document and design for an Open-Source enhanced security token standard for the Cardano Network and a corresponding Security Token Studio Module based on the enhanced security token standard (building upon the existing native token capabilities via smart contracts as appropriate)
• The specification document will include the necessary user stories, high-level architecture, and all necessary analyses.

B: Acceptance Criteria

• Review of technical documentation

C: Evidence of milestone completion

• Delivery of Technical documentation

Milestone 2: Design Phase for Primary Issuance & Custody/Wallet Module on Cardano (1 month)

A: Milestone Outputs

• Technical specification document and design for a proprietary digital security token issuance module and custody module
• The specification document will include the necessary user stories, high-level architecture, and all necessary analyses.

B: Acceptance Criteria

• Review of technical documentation

C: Evidence of milestone completion

• Delivery of Technical documentation

Milestone 3: Implementation Phase for Security Token Standard/Studio Module (2 months)

A: Milestone Outputs

• Development of the enhanced Security Token Standard and Security Token Module to operate on the Cardano Network
• Integration of the Security Token Module with the RedSwan Marketplace.

B: Acceptance Criteria

• Matching the developed functionality with the design specification

C: Evidence of milestone completion

• Demo of the working system

Milestone 4: Implementation Phase for the Primary Issuance & Custody Module (2 months)

A: Milestone Outputs

• Development of the Primary Issuance Module, integrated with the RedSwan Marketplace and including features like KYC, user accreditation, investment workflows, payment integration, investor dashboard, and administrator tools
• Development of the Custody/Wallet Module that will allow RedSwan users to implement self-custody or third-party custody of their Cardano Digital Assets

B: Acceptance Criteria

• Matching the developed functionality with the design specification

C: Evidence of milestone completion

• Demo of the working system

Milestone 5: Regulatory Compliance & Auditing (1 month)

A: Milestone Outputs

• Completion of technical and security audit of all components of the system
• Completion of due diligence, legal, and operational work to prepare for tokenization of $50M worth of high-quality commercial real estate assets

B: Acceptance Criteria

• Review of final reports

C: Evidence of milestone completion

• Delivery of final technical security audit report
• Delivery of final independent third-party diligence report on real estate assets

Milestone 6: Minting tokens on Cardano, Marketing & Driving Transactions (1 month)

A: Milestone Outputs

• Use the Security Token Module to mint $50M of real estate security tokens on the Cardano blockchain
• List and market the tokenized assets on the RedSwan Marketplace for global investors to maximize the size and number of transactions for Cardano and Red Swan CRE
• Project closeout & video

B: Acceptance Criteria

• Successful minting of $50M of security tokens and subsequent custody in Cardano-compatible wallet(s)

C: Evidence of milestone completion

• Verification via a block explorer (or other valid means) of minted security tokens on the Cardano blockchain

[RESOURCES] Who is in the project team and what are their roles?

Red Swan CRE Leadership Team for this Project

Ed Nwokedi - CEO

https://www.linkedin.com/in/edwardnwokedi/

Role: Responsible for overall project strategy & execution, stakeholder management, and business development. Brings a combined 25 years of experience in commercial real estate as an executive at the world's leading commercial real estate companies Cushman & Wakefield and Collier's, with expertise in digital assets and structuring innovative real estate investment platforms.

Don Oparah - CTO

https://www.linkedin.com/in/don-oparah-307110a6/

Role: Oversees the technical architecture, development, and implementation of the Cardano-based security token platform. Leads a team of experienced blockchain developers to deliver the project milestones. Has a Ph.D. in Computer Science from the University of Cambridge and a strong background in blockchain technology and software engineering for both startups and enterprises.

Roy Malkin - Co-Founder

https://www.linkedin.com/in/roymalkin/

Role: Responsible for the overall technology strategy and marketing of the tokenized real estate assets. Spent 6 years in the digital assets and blockchain industry, and has 20 years of experience in tech innovation, including roles at larger Fortune 500 companies like Walt Disney and Liberty Media. Holds an MBA from UCLA and ensures the platform adheres to the highest standards of security and compliance.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources.

Total Budget: ₳2,000,000

IT Development: 70% of Budget ₳1,400,000

Regulatory Compliance and Auditing: 5% of Budget ₳100,000

CRE Asset Onboarding: 25% of Budget ₳500,000

ADA Price Variance

• In the event that there is a significant increase in the valuation of ADA versus the US dollar, Red Swan will deploy the additional funds toward marketing the minted tokens to drive increased transactions on Cardano.

• In the event that there is a significant (20% or more) devaluation in the price of ADA versus the US dollar during the duration of the project, RedSwan would look to develop a simplified version of the platform and then apply for follow-on funding to extend to the full functionality. 

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

This project will maximize the value for Cardano in several key ways:

1. Maximizing Cardano's Market Cap:

• The minting and listing of $50 million in tokenized commercial real estate (CRE) assets directly on the Cardano blockchain will immediately increase the total value of digital assets on the Cardano network.
• As we scale this model to potentially $150 million in tokenized CRE, it will drive a substantial expansion of Cardano's overall market capitalization.
• This growth in "real-world" asset-backed tokens listed on Cardano will make it an increasingly attractive destination for institutional investors, further boosting the network's market value.

2. Driving Network Activity and Adoption:

• The listing of $50 million in tokenized CRE assets on Cardano, as well as the ongoing transactions and interactions from investors, will generate substantial transaction volume, staking activity, and liquidity on the network.
• This increased usage and adoption will contribute to the overall health and growth of the Cardano ecosystem.

3. Strengthening Regulatory Compliance:

• Our platform will adhere to the strictest securities regulations, demonstrating Cardano's ability to host institutional-grade, compliant digital assets.
• This will build trust and confidence in Cardano as a premier blockchain for regulated real-world applications, attracting additional high-value projects and partners.

4. Expanding Real-World Use Cases:

• By enabling the fractionalization and tokenization of CRE assets on Cardano, we will significantly broaden the blockchain's real-world applications beyond just cryptocurrency transactions.
• This will showcase Cardano's versatility and positioning as a leading platform for digital securities and asset-backed tokens.

5. Catalyzing Further Growth:

• The successful completion of this project will open the door for future collaborations and expansions, such as the addition of $100 million in tokenized CRE assets on Cardano.
• This scalable model represents a sustainable path for long-term value creation within the ecosystem.

6. Driving Real-World Transaction Volume:

• The ongoing trading and management of the tokenized CRE assets will generate a significant number of real transactions on the Cardano blockchain.
• Investors buying, selling, and transferring these security tokens, as well as receiving dividends, will create a steady flow of high-value transactions.
• This surge in transaction activity will demonstrate Cardano's capability to handle complex, regulated financial use cases beyond just cryptocurrency transfers.

7. Increasing Average Transaction Size:

• The tokenization of multi-million dollar CRE properties will result in much higher average transaction values on the Cardano network.
• Compared to typical small-scale cryptocurrency transactions, the movement of these asset-backed security tokens will significantly raise the overall average transaction size.
• This will further position Cardano as a blockchain capable of supporting institutional-grade financial applications and attracting more high-value projects and partnerships.

Moreover, the tokenization industry is projected to grow into a $16.1 trillion market, according to recent estimates by the Boston Consulting Group and Bank of America. The world's biggest financial asset managers like KKR and BlackRock have already made tokenization a top strategic focus, engaging in billions of dollars worth of related transactions.

Given the transformative potential of this project to maximize Cardano's market cap, drive network activity, and adoption, strengthen regulatory compliance, expand real-world use cases, and catalyze further growth, the cost represents an exceptional value proposition for the Cardano community. The benefits far outweigh the investment, positioning Cardano as a leading blockchain for the tokenization of real-world assets and aligning it with the industry's shift towards this emerging financial model.