Lagos State Government Plans to Tokenise Real Estate on the Blockchain, Turning Them into NFTs

The Lagos State Government has revealed plans to tokenise real estate on the blockchain; essentially turning them into NFTs that are easily transferable.

The Lagos State Government plans to tokenise real estate on the blockchain, essentially turning them into NFTs that can be easily transferred.

This plan is part of the Lagos State government’s strategy to increase internally generated revenue, as outlined in the Eko Revenue Plus Summit documents.

The tokenisation process will be carried out by the Lagos State Ministry of Science & Technology in collaboration with other agencies and partners over 16 months.

Together, they will utilise a ₦500 million budget to tokenise real estate in Lagos.

What is tokenisation?

Tokenisation is the process of converting something physical or virtual into a digital token that can be easily traded or transferred.

This token could represent anything from a movie ticket to a gift card and is stored on the blockchain, making it transferable over chains like Ethereum or Solana.

Essentially, a certificate of ownership can be tokenised and transferable as easily as transferring USDT or other kinds of cryptocurrencies.

So whether it is a physical asset or a digital asset, whoever has the certificate of ownership is the legal owner.

Tokenisation became a very popular phenomenon in 2021 with the advent of non-fungible tokens (NFTs).

Digital artists, musicians, and even celebrities began creating and selling unique digital assets as NFTs.

These NFTs, secured on the blockchain, became highly sought after as collectors and investors saw them as a new frontier in digital.

Some tokenised digital art sold for as much as $69 million.

What made them especially profitable was the blend of scarcity, hype, and the potential for these digital tokens to appreciate, much like rare physical art.

This sudden surge in popularity turned NFTs from a niche technology into a global sensation, sparking debates about the future of digital art, collectables, and ownership.

However, the NFT bubble burst in 2022.

Dune Analytics revealed in September 2022 that NFTs had lost 97% of their trading volume, going from $17 billion in January 2022 to $470 million by September 2022.

Tokenisation for real estate

While the NFT trend died, it had other use cases beyond trading digital art, one of which was in the real estate sector.

Real estate tokenisation involves turning the ownership of a property into digital tokens on a blockchain.

Each token represents a small part of the property, allowing investors to own and trade portions of it more easily and clearly.

While real estate tokenisation is a relatively new concept, it has been done a couple of times before.

For example, in 2018, an asset management firm based in New York completed the tokenisation of a resort on the Ethereum blockchain.

The resort, known as the St. Regis Resort in Aspen, Colorado, US, was turned into tokens on the blockchain, with each token representing a share of the property.

These tokens were then sold to accredited investors, allowing them to own a part of the luxury resort.

After that tokenisation got attention, another property valued at $30 million was tokenised by the same asset management firm.

Similarly, in the UK, a company called Smartlands became the first company to tokenise property in the country.

This platform allows for the issuance of digital shares, or security tokens, backed by assets like real estate or agriculture, making high-yield investments accessible to retail investors with lower buy-in thresholds.

Another German-based company, Brickblock, turns real estate, including homes and business properties, into blockchain tokens to make it easier for people to invest and transfer ownership of properties.

Real estate tokenisation in Nigeria

The idea of tokenising real estate in Nigeria is not new.

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